Grant Sabatier knows what rock bottom looks like — sleeping in your childhood bedroom with $2.26 to your name. Jobless and only avoiding homeless by the generosity of his parents (generosity which they told him would run out in three months’ time), 24-year-old Sabatier set two goals for himself: save $1 million and retire as soon as possible.
They were absurd goals. Ones only a crazy person would make. And yet, five years, three months and six days later, Sabatier retired at the age of 30 with $1.25 million. Today he is the creator of the Millennial Money blog and author of “Financial Freedom: A Proven Path to All the Money You Will Ever Need.” In both he shares his journey to success.
So how did he manage to go from not even enough for a Chipotle burrito to a millionaire in five years? It wasn’t by winning the lottery or hustling for the mob, as he writes in Financial Freedom. It was by saving and investing everything he could.
The Millennial Millionaire. The beginning of Sabatier’s story isn’t that different from that of countless other millennials. Before being branded “The Millennial Millionaire” by CNBC, he was just a kid from Falls Church, Virginia. His mom worked as an executive assistant and then an event planner, and his dad went from cleaning office buildings to working in the mailroom to managing the purchasing department.
After graduating from the University of Chicago with a degree in philosophy, Sabatier bounced through four jobs in three years. “I never found the right fit, both in corporate culture as well as things I was interested in,” he says. While most of his friends were starting successful careers, he found himself laid off and on his parents’ doorstep.
“I remember going down and having dinner with my parents one night and they didn’t even have to say anything; I could tell from the look on their faces that they were disappointed and worried about where I was in life,” he says. This would provide the impetus for his financial goals.
[Read: How to Retire by 30: 5 Steps to Financial Independence.]
Money is only as valuable as the freedom it buys. Saving has always been a core value for Sabatier. He and his lifelong friend, Nick Hurwit, who have known each other since they were 5 years old, spent years collecting spare change in high school, ultimately saving up almost $1,000.
“But more than money, (Sabatier) has always inspired me to invest time, energy and emotion into the things that matter most: friends, family, hobbies, travel, good wine,” Hurwit says. “He has taught me that by pouring ourselves into the things we love, we gain more and more freedom.”
After reading “Your Money or Your Life” by Joseph R. Dominguez and Vicki Robin, Sabatier began to view money as a philosophical concept. Having all the wealth in the world won’t guarantee happiness, but having the freedom to spend your time as you choose can.
To achieve financial freedom, Sabatier knew he had to put his money to work. “I fell in love with the idea that my money could make money,” and the power of compounding.
How a millionaire taught himself how to invest. No one ever gave Sabatier investing advice. He’s never talked to a financial advisor or had someone pass on words of wisdom. Everything he knows about how to invest has been learned through books and experience.
It wasn’t love at first sight for Sabatier and investing. His first investment outside his 401(k) was a stock he found by Googling “best stock.”
“It wasn’t a penny stock but it was really undervalued and went up and down a lot,” he says. “I remember checking it on my phone and freaking out because it was all the money I had.”
A week after buying the stock, he sold it at almost a 50 percent loss. “If I’d held onto it for a year or two, I would have made money, but I was so emotionally freaked out that I sold,” he says.
It was this traumatic first experience with investing that Sabatier had in the back of his mind when he started investing again at age 24. He turned to Google for help once more, this time searching for “simple investing books.”
His search turned up “The Coffeehouse Investor” by Bill Schultheis. “It’s a really simple, great book on index funds and total stock market index investing,” Sabatier says. By the time he finished reading it, he was “sold on the idea of index funds.”
Next he dove into “The Bogleheads’ Guide to Investing” by Mel Lindauer, Michael LeBoeuf, and Taylor Larimore. The Bogleheads, named for Jack Bogle, the founder and former CEO of Vanguard who is oft considered the father of index investing, took indexing to a whole new level for Sabatier. The book made the case for investing in index funds early and often, a motto by which Sabatier would steer his investing ship.
“It’s what really set me on my path,” he says. He expanded his investing motto to be “invest early, often and as much as I can.”
He started putting all his money into the Vanguard Admiral Total Stock Market Index Fund (ticker: VTSAX). Later he added the Vanguard Total International Stock Index Fund ( VTIAX) and shares of Amazon.com ( AMZN).
[See: Celebrate National Book Lovers Day With the Best Investing Books.]
From student to teacher. Ten years after the start of his investment education, Sabatier has become the educator.
“This is something anyone can learn and do,” he says. The concepts he writes about are nothing new, but Sabatier has found a new way of explaining them that makes investing intuitive and approachable.
“He’s taken proven investment strategies and aligned them with his (the millennial) generation in the language he uses,” says Dave Berg, a long-time friend and former colleague of Sabatier who works as a digital marketing manager in Chicago. “I think that’s a gift. It’s something you can practice but for him it’s intuitive.”
Investing is often perceived as this complicated process that requires stock picking and being tuned into Bloomberg all day. In reality, it’s the simplest investing principles that matter most: staying diversified and keeping costs low.
“A vast majority of investing information is just noise,” Sabatier says. “I think many people are really confused because there’s so much noise out there when the investing strategy in my book is one chapter and it works.”
He provides a seven-step strategy to investing and shares exactly how he invested to become a millionaire in five years. Today he attributes his wealth half to his investments and half to his income hustling (at one point he had 13 income streams) and frugal lifestyle.
Income minus spending equals investing. When he moved out of his parents’ house, it was into “the crappiest apartment on earth in Chicago,” Sabatier says. “My wife, then-girlfriend, wouldn’t even come over to my apartment it was so bad.” But to him, it was worth it.
“The gap between income and spending is how much you can invest,” he says. To give his money as much time to compound as possible, he had to save every dollar he could.
When Berg first met Sabatier at envisionit media, a digital marketing agency based in Chicago, Berg recalls how Sabatier arrived on an old Punch moped. “I asked him, ‘Hey, man, where’d you get that thing?’, and he’s all, ‘I bought it for this and it saves me from having to buy a car or take a cab, and I got two because with these you’ve got to have one for spare parts.'”
[See: 8 Investing Do’s and Don’ts During Market Volatility.]
The best investing advice. So how can you become a millionaire investor? First, invest early, often and as much as you can, Sabatier says. Second, “check your emotions at the door.”
“Emotions and investing are a toxic mix,” he says. The best way to reduce the emotional charge is to “spend more time with your money.” The more time you spend with your money, the more comfortable you’ll become with it and its fluctuations.
Rather than hiding from the day-to-day price fluctuations of your investments, practice observing them with an objective eye. At first watching their value rise and fall at the market’s whim may be gut-wrenching, but eventually you’ll become desensitized to the stock market volatility and able to make more rational investment decisions as a consequence.
People spend more time planning vacations than managing money, Sabatier says. “If you’re going to spend 2,000 hours per year working for money, it makes sense to spend time learning how to invest it.”
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How to Invest Like Millennial Millionaire Grant Sabatier originally appeared on usnews.com
