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As a financial advisor, I have seen wealthy clients follow the same path and become millionaires. They kept their debt low, deferred gratification, and invested at least 15% of their income. But my strategy changed when I met Grant Sabatier and realized that I wasn’t enjoying my money the way I wanted.
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In theory, the process of wealth creation is simple. Spend less than you earn, keep debt low, and invest at least 15% of your income. After 20 to 30 years of discipline and humility, you can retire wealthy.
It was the wealth building template I came to embrace, the path of least resistance, and the most proven route to financial freedom that I followed for most of my career as a top financial advisor. Every high-net-worth client I met believed in this strategy. Most of them were in their late 50s or 60s and had reached their $1 million goal by delaying gratification and playing the long game.
But while the method is tried and true, it doesn’t mean it’s easy to stick with for decades.
A conversation that changed my mind
Personal finance is essentially a series of trade-offs. Enjoy by spending most of your money now, or delay your luxury in exchange for a comfortable retirement in the future. Another common example is sacrificing work-life balance and long hours in exchange for a higher salary. These tradeoffs felt inevitable to me, so I chose a modest but consistent approach to building wealth and delayed many of the lifestyle experiences I wanted to enjoy.
That changed in 2019 when he interviewed Grant Sabatier, then 30, on a local radio show in New York City. He built up a net worth of $1.25 million in just five years.
In the middle of the interview, I asked Sabatier what the average person could do to achieve similar results. I wanted to know how to accelerate the process of building wealth while still enjoying the fruits of my hard work.
“I think the important thing is to really understand what makes you happy in life,” Sabatier began. “The most important question is not how much money you need, but what kind of life you want to live.”
He went on to say that when he was 25 years old, he sat down and made a list of 10 things that made him happy. Eight of the items, including spending time with family, were free, and the remaining two were “fairly inexpensive.” The next step: “Why can’t I optimize my life to spend more time on these things? I realized that I needed a lot less money to be happy than I thought,” says Sabatier. he said.
At that point in the interview, things clicked for me. I began to reorganize my finances to better fit the life I truly wanted to live. Since that conversation in 2019, I’m a homeowner, my income has increased by $50,000, and I’m also on track to pay off my undergraduate loans and travel around the world this year.
These are the steps I took to create and maintain balance in my financial life.
I made a list of happy things
I started by listing a few things that made me happy. In this step, we did not limit the list based on cost or time constraints.
For me, watching college football in the fall makes me happy, so attending more live games was something I wanted to include in my lifestyle. Growing up in Oklahoma, college football was a rite of passage for us. The games remind me of Saturday mornings when we would gather around the television to watch “College Gameday.” I still continue that tradition with my children. However, since I had never attended a match in person, I decided to change that.
Another item on my list was to learn to play an instrument. Due to career demands, I often felt like I didn’t have time. Added to my list.
Split the list into smaller items
To achieve my goal, I decided to attend only one major soccer match each year.
Depending on your goals, it may not be possible or practical to tackle all of them at once. that’s ok. Here, you need to break your goals into sprints, smaller goals, and milestones so that they don’t hinder you from achieving your long-term financial goals.
I’ve listed the prices for the list.
Next, I gathered an estimate of how much each item would cost. For example, when I was ready to learn an instrument, I started by buying a used trumpet for $300 in 2021, and as I progressed, I bought a new trumpet.
If one or more items on your list include travel, it’s safe to extrapolate because the dates may not have been set yet. If you want to learn a new skill, see how much private lessons cost for a few months, or look for cheaper second-hand options to get started.
Optimized your income and schedule
The most important part of this process was aligning my finances and time so I could fund the lifestyle I wanted while securing my financial future. To do this, I set aside 5% of my side hustle income each quarter and spent it solely on game tickets and music lessons. The remaining 95% went toward taxes, investment goals, and student loan repayments.
This had two effects. Not only will it help you achieve some of your current ideal lifestyle, but it will also help you avoid burnout. That’s because a portion of my income was set aside to splurge on exciting experiences. It also helped that I cut down on time-consuming tasks like one-on-one financial planning and replaced them with more efficient tasks like speaking engagements. Because one speaking gig is the equivalent of five planning clients. This has allowed me to spend more time with my family and learn fun new skills.
Terms like budget and planning are often perceived as restrictive when they could be used to strategically splurge on the things that bring you joy today. There is a famous quote that says, “If you do today what others won’t do, you’ll live tomorrow like no one else can.” I learned that finance doesn’t have to be binary. Aligning your finances with what makes you happy will help you stay focused and on track toward your long-term money goals.
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This article was originally published in June 2022.
