How to reach financial freedom and retire at an early age

Reaching financial freedom and retiring at an early age is the dream of many around the world. How can we achieve this desire?

How to reach financial freedom and retire at an early age

Grant Sabatier, one of the most recognized faces of the FIRE movement, which advocates reaching financial independence and retiring at an early age, explains, through four questions, how to be able to retire at 30 and live leisurely off of private income.

Sabatier clarifies that he made important decisions: he took online digital marketing courses, got fa job, then crated his own business, saved what he could, invested in the market and, further on, bought property.

During the entire process, Sabatier affirms that four questions guided all of his steps for reaching financial freedom and retiring at an early age.

First question: How will your money help you reach financial freedom?

“Many people think that money lets you do what you want. However, the important thing is that first, you ask yourself what you really want in life and if money can help you achieve it,” he clarifies. This question is very important, because he feels that some transform their money into being their objective when, in truth, it’s only a tool.

Sabatier suggests that people make a list of the things that make them happy. The next thing is to take this list and calculate the amount of money necessary for achieving these things. The entrepreneur recommends not putting a very high bar. “If you don’t have anything, begin with $1,000 or $5,000 USD, instead of thinking of the final goal and then advancing with smaller stages, one after another.”

Second Question: How much and what are you ready to sacrifice to reach financial freedom and retire at an early age?

“Everything in life is an exchange, in the sense of sacrificing one thing to obtain another,” Sabatier stated. “You can always have more and more money, but you can’t recover your time.” So, the entrepreneur feels that “time is the most valuable resource that we have”.

Before that, Sabatier points out that every person must ask himself how much time he is willing to sacrifice for money. He sums up his approach in one sentence: how much money do you think an hour of your life is worth?

The other part of the question is related to saving. Sabatier affirms that every part of the answer about how much one is willing to reduce expenses so they can save. “It’s important to clearly understand that every time you have the opportunity to save but you don’t, that you are sacrificing a future amount of your financial freedom,” he added.

Third Question: In what way can I increase my investments?

Sabatier confesses that his formula for reaching financial freedom and retire at an early age was to invest in a stock index, instead of doing it in a single company.

“Of course, many people prefer investing in stocks from companies they have chosen personally. I’ve seen investors who put half of their money in a single company; however, when you do that, even though the company is successful, it’s very risky because there is always the possibility of it crashing or turning out less competitive,” he clarified.

Therefore, he recommends investing in funds that follow a stock index, for example the S&P500 or others. This entrepreneur’s logic is that if a company gets into trouble, it leaves the index. Meanwhile, those companies that are doing well are the ones that enter the index.

In these cases, when becoming a safe investment, maybe the profitability isn’t very high, however Sabatier clarifies that, in any case, it’s a good alternative. This can help you reach financial freedom and retire at an early age.

Another suggestion from Sabatier is to invest in the real estate sector. “The vast majority of the youngest investors who have reached financial freedom have done it through the real estate sector,” he stated.

Among Sabatier’s proposals is that of “house hacking”. This means renting out one or more rooms in your home, to cut down on expenses and to pay off your mortgage more quickly. The third proposal inside this question is to set up your own shop.

“If you were the owner of a company, you control your own time. And if it’s going well, you can sell it and do something else,” he asserted. Maybe it will fail and you’ll lose all your money; nonetheless, “this is a part of learning,” he recognized.

Fourth Question: How can I develop my abilities?

For Sabatier, it’s essential that you develop your abilities, those you consider your “future currency”. “The more abilities you have developed, the more opportunities you will have to earn money,” he sustained.

The entrepreneur clarified that they are some abilities that are more called for and required than others. These are the ones you have to develop, because “they let you earn more money”. Well then, to develop these new abilities, Sabatier affirms that it’s not necessary to go to the university, nor to obtain academic titles.

“We live in an incredible era where many of the more profitable abilities can be learned for free on internet, You can learn anything on YouTube,” clarified Sabatier.

In addition, another way to improve your abilities, according to Sabatier, is to take on a second job which in some way complements your primary employment.

Caporaso & Partners is a law office dedicated to helping people reach financial freedom and retire at an early age. Consult with us.



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