Lesson 1. Introduction.
Everyone wants to be financially independent with huge amounts of money. It takes time and strategy to earn money. But, not everyone is willing to follow the principles and work hard; especially the millennial people.
Most people, nowadays, just want everything to be brought to them on a silver platter. They find it hard to earn money and just adjust to what they have. The author, Grant Sabatier, was also one of those kinds.
When he was 24, Grant was struggling to make profits and was deep in debt. But, through diligence and commitment, he managed to change his financial position. He’d freed himself of all his debts and money problems.
He created a successful roadmap to financial freedom and worked hard on it. In just five years, without any inheritance, gambling, or trickery, he strategized his future and became a millionaire.
In the book, he outlines all those details one should pay attention to, to become financially independent. He mentions ways in how small works can help you accumulate large amounts and why budgets aren’t helpful to create wealth.
Lesson 2. Calculate your Annual Expenses.
Einstein had once said, “Compounding is the eighth wonder of the world.” After all, he was right. Compounding is the process of investing your money in an account and waiting for it to generate interests over some time.
The interest generated will depend on how much money you have invested. If you invest a huge value of your money, it will compound to a greater interest. And, if you invest in small sums, it will generate smaller interests.
To have a clear target of your savings, you need to understand your annual expenses. Calculate how much you spend on your ongoing expenses, like food, rent, mortgage, travel, and insurance.
After calculating all your current expenses, also add in any of your upcoming plan expenses. Say you want to buy a house or a car, add that amount to the value of your expenses.
Now, use a calculator and divide the amount of your expense by four percent. The figure you get is your principal amount. The principal is the amount you need to invest in a compounding account. That amount will generate interest and produce your profits in the long run.
Generally, most interests compound around seven percent. But, the author advises investing in four percent. This is to stay safe in case of inflation. Once you’ve invested your money, then it’s better not to touch it for a while, so that you can get higher interests.
Unlock Knowledge with Wizdom App
Explore a world of insights and wisdom at your fingertips with the Wizdom app.
1 Million+ App Download
4.9App Store Rating
5000+Summaries & Podcasts