The Millennial Millionaire
This week we are highlighting a man dubbed ‘The Millennial Millionaire’, Grant Sabatier. Grant is the founder of the
overseas company ‘Millennial Money’. Within a five year period, he went from having $50 to spare each week,
to full financial independence. If like me, you want to know the marvelous journey this man took to get to where he is;
then read on dear reader… read on!
The Beginning
In 2013, Grant was living in an apartment he could barely afford, with student loans (10x worse than HEC debt) and a car loan. Living paycheck to paycheck, with only $50 spare at the end of the month. Whilst he wasn’t drowning in bills, he definitely was not flourishing.
Math time: if Grant had a remaining $50 at the end of the month, how much did he have at the end of the year?
Answer: $600 (that’s not even enough for a small holiday).
The Change
In late 2014, early 2015 Grant underwent a major change of his perspective on his financial situation. He managed to: reduce his $50,000 student loan and car loan to less than $8,500 with final payment to occur in 2018, built an investment portfolio with over $35,000, and accumulated enough savings for an adequate emergency fund.
The Process
Shift to a net-worth mindset – start tracking your net-worth
Income, savings, investment returns, debt to income ratio, all these numbers play an important role when optimising your money but the single most important figure is your overall net-worth. Net-worth subtracts liabilities from your assets. No matter how much you make or save, if your net-worth isn’t increasing you’re on the wrong track. Not sure where to start? Our experts can help. Give us a call on (07) 3367 0852 and talk to an advisor.
Become a bloodhound
I’m not saying become an actual sniffer dog, what I mean is tracking your money every step of the way. Calculate loans, bills, food, entertainment, etc. Similar to getting a loan, ask yourself how much you spend each week on both necessary and unnecessary things. Knowing where your money is ending up is much more important than budgeting (of course, budgeting is ideal anyway!). Doing so can really help put into perspective what you should decrease.
Never stop learning
You don’t have to sign up for a 3-year degree at university, and you certainly don’t have to pump thousands of dollars into a trade accreditation for this step. Luckily in the technology era, free courses and certifications are popping up everywhere. If like me you are into digital marketing, Google offers free certifications in both Adwords and Analytics, whilst HubSpot offers an Inbound Marketing Certification. No matter what industry you’re in, you should always look at increasing both your knowledge and skills.
Adopt a side business
These days it’s so easy to create a side business, whilst it won’t offer you thousands in revenue, it can offer you another income stream. Some people get paid to blog, create logos, produce crafty things or even create a small side business. Similar to selling lemonade for 50c a cup as a child, you can create a small business quite easily. Unless you’re sure this is the career path you want to take, do not invest all of your time and resources into it!
You are #1
From the widely known concept in ‘Rich Dad, Poor Dad’, pay yourself first. Save as much as you can before bills are due but leave enough to ensure no late payments. I’m not saying take half your paycheck and hide it from creditors, I’m saying start squirreling funds away before making purchase decisions. The most effective way is to start with 10% of your pay and place it in an interest-earning savings account, or even invest it. Anytime you earn money from your side business, put it straight in your savings or investment account – don’t spend it! This reduces the risk of impulse buying as you’ll have less and less left over to do so.
Invest, don’t consume
If you were to look at some statistics, you would notice that most people are consumers rather than investors in this world. Investing is crucial if you want to build any kind of wealth or portfolio. Whenever someone earns a raise or accrues some overtime, they spend it on things that don’t work towards financial freedom. In fact, the biggest thing most people do is buy expensive things or live a certain lifestyle they can’t afford, essentially ‘champagne taste with beer pockets’. So the next time you’re at a shopping center or browsing the internet and see something you want, ask yourself “will I actually need this item and if not, will it add value to my financial freedom?” The answer is most likely always no.
Patience is a virtue
Patience is the biggest key to anything in life: getting that promotion, growing your business, meeting the right person, finding the perfect home, etc. There is rarely anything in this world that you can gain without being patient. Don’t be discouraged if you’re saving less than a hundred dollars a month, it all adds up in the end. In a few years, your savings will have increased and you’ll look back proudly at your accomplishment.
The decision to start a business is usually pretty exciting. It’s often someone’s dream finally coming to life. In these early stages it is quite easy to gloss over some aspects that aren’t particularly fun or money making in order to get things up and running. However, whilst they aren’t money making they could very well be costly and as accountants, we hate to tell our clients that there could have been a better outcome if a few things were different.