Finance

4 things I learned about money from reading ‘First to a Million’ when I was 16

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  • My dad and I are reading “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 house hacking strategy 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 books on finance, but none have stayed 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 is possible to retire years ahead of schedule

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 having enough money saved where you don’t have to work if you don’t want to.

If you’re FI, you might as well be FIRE, which stands for “Financial Independence / Early Retirement.” I’m not sure yet if I want to retire early, but it would certainly be nice to have that option. The book lays out the four mechanisms of FI:

  • They 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 ensures that you have money left over for the things that matter to you.
  • Save the difference: By regularly saving the difference between your income and expenses, you’ll have emergency savings that you can fall back on if you need them.
  • Invest wisely: If you don’t want to work for the rest of your life, you need a way to increase the money you already have. That’s where investment comes in. It’s a good way to grow your money — if you do it right.

The four mechanics of FI are really meaningful to me because I think they really help break down something that can seem a little confusing into a few simple steps.

2. There are alternatives to going to college

“First to a Million” explains that there are alternatives to college. Growing up, we mostly hear how we have to get good grades in school, go to a good college, and work until we’re 65 or older.

But that’s not the only way to do things. There are so many other ways to make money, like starting your own business or working at a job that doesn’t require a college education.

3. Home hacking is one way to get started

Something else I really enjoyed learning about is called “house hacking”. House hacking is when you rent out part of your home and use the rent you receive to pay your mortgage. You do this until you’re basically living there for free.

I know someone who bought an apartment building, lived in one, and rented out the others. This sounds like such a good way to start your FI journey. You can live in a place for almost free and maybe even earn money every month.

4. It is important to organize yourself

My family has always been very schedule-oriented and organized. One way we do this is by using an app called Todoist to keep track of what we need to do each day. You can set tasks for yourself and check them off when you’re done. This really helps me get organized and gives me the satisfaction of getting things done.

You could be the smartest person in the world, but if you’re not organized, it’s much harder to get things done. In the back of the First to a Million book is a checklist of things to do to become an FI, starting in your sophomore year of high school. There isn’t always a set of precise steps to becoming an FI, but this checklist really helped me buckle down and start my FI journey.

I think the best thing about First to a Million is that each chapter has an example of a person who is either already financially independent, or is on their FI journey. I loved hearing these stories about real people who were able to work hard and achieve their goals. I learned so much about finances from reading this book, and I think one day I will be financially independent.

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