Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page.
- My dad and I read “First to a Million” to learn about financial independence.
- I learned that early retirement is possible, and that you can become financially independent without going to college.
- I also learned about the strategy of house hacking, and the importance of organization.
A few months ago, my dad and I read the book “First to a Million: A Teenager’s Guide to Financial Independence,” by Dan Sheeks, as part of our homeschool curriculum.We have also read other finance books, but none of them have stuck with me as much as this one.
As a 16-year-old reading it for the first time, I learned four things in particular:
1. It’s possible to retire years ahead of plan
One of the first things we learned in “First to a Million” was the concept of FI, which stands for “Financial Independence.” Being financially independent means that you have enough money saved where you don’t have to work if you don’t want to.
If you are FI, you can also be FIRE, which stands for “Financial Independence / Retire Early.” I’m not sure yet if I want to retire early, but it would definitely be nice to have that option. The book lays out the four mechanisms of FI:
- Earn more : Work harder and smarter to earn more money now .
- Spend less: Earning more money isn’t helpful if you can’t control your spending. Spending less on unimportant things makes sure you have money left for the things that are important to you.
- Save the difference: If you regularly save the difference between your income and your expenses, you will have emergency savings to fall back on if you need it.
- Invest wisely: If you don’t want to be working the rest of your life, you need a way to make the money you already have grow. That’s where investing comes in. It’s a good way to make your money grow — if you do it right.
The four mechanisms of FI are really meaningful to me because I think they really help to break down something that may seem a little confusing to a few simple steps.
