The book starts out by explaining the life of one man who has been struggling. It’s his first time trying to get ahead and he sees a career in finance as an escape from all the struggles that have led him to this point. Every day, he works hard but fails miserably because of lackadaisical decisions. He is forced to quit like everyone else, until they release a video on YouTube showing people quitting their job with $1 million dollars or more.(https://www.youtube.com/watch?v=3nqGk-CiWwY)
“Quit Like a Millionaire” is a book that has been written by Kristy Shen. It is about how to quit your job and make money from home. The book was released in 2016 and it has received positive reviews.
Are you seeking for a synopsis of Kristy Shen and Bryce Leung’s book Quit Like a Millionaire? You’ve arrived to the correct location.
After reading Kristy Shen and Bryce Leung’s book, I wrote down a few significant takeaways.
If you don’t have time, you don’t have to read the whole book. This book synopsis gives you a quick rundown of all you can take away from it.
Let’s get this party started right now.
I’ll go through the following points in this Summary of the Book “Quit Like a Millionaire”:
What is the purpose of Quit Like a Millionaire?
Quit Like a Millionaire is a straightforward approach to building wealth and managing your finances.
Kristy Shen’s statistically proven strategy to saving, investing, and spending will not only help you get out of debt, but also put you on the road to financial freedom.
What’s the greatest part? You don’t have to be an entrepreneur or a real estate magnate to get there. All you’ll need is a spreadsheet and some meticulous preparation.
Who wrote the book “Quit Like a Millionaire”?
Kristy Shen and Bryce Leung both studied engineering in Canada before retiring early.
The two are now billionaires, and they spend their time speaking and writing for their self-help platform, Millennial Revolution.
Their remarkable true-life tale has been covered in media sources all over the globe, including The New York Times, The Independent, Handelsblatt in Germany, and Women’s Health Magazine in Australia.
Quit Like a Millionaire is for who?
Not everyone will benefit from Quit Like a Millionaire. If you are one of the following folks, you may like the book:
- Are you sick of working from 9 a.m. to 5 p.m.?
- Those who hustle, create their own businesses, and think outside the box
- Those who want to retire at a young age
Summary of the Book “Quit Like a Millionaire”
Introduction
‘The most important thing in the world is money.’ That’s a startling assertion on the verge of becoming heretical. We’re taught again and over that happiness isn’t something you can purchase.
Sure, you can’t buy your way to paradise by spending money. Poverty, on the other hand, is almost certain to make you unhappy. Money is the most useful weapon we have for improving our lives, rather than being the root of all bad.
You’ll need money to look after the people you care about, and the more the merrier. Would you want to spend more time with your children? Exactly. Imagine carving out time for reading, attending to the theater, and traveling to new places to learn about other cultures and nations. Money is the solution.
Kristy Shen, a self-made billionaire who retired at the age of 31, lives by this concept. In these book excerpts, we’ll look at how she achieved it. There will be no shortage of vehemently opposed viewpoints, out-of-the-box ideas, and unique innovations. Furthermore, you’ll learn how to get out of debt, build money, and achieve financial freedom.
Lesson 1: Make smart judgments by following your passions rather than the numbers.
In 2005, Steve Jobs delivered the graduating speech at Stanford University. What was his counsel to the students? “Follow your heart,” was a catchphrase that went throughout the globe. With the support of the great and good, it was clear – why on earth wouldn’t you follow your dreams?
Here’s why: it’s often the incorrect choice.
Every year, students make a life-changing choice on what to study. Kristy, the author, started thinking about this in 2000. Creative writing, accounting, and computer engineering were on her list of probable majors.
Despite her heart’s yearning to pursue a career in literature, her math advised her to seek a career in engineering. Kristy was paying attention to her arithmetic. She made the correct choice.
Let’s take a closer look at the numbers. Four years of schooling in Canada costs about $40,000. Writers get paid in a range of amounts, from nothing for unpublished newcomers to millions for seasoned professionals like Stephen King. They make an average of $17,000 each year.
The minimum wage in 2000 was $6.85 per hour, or $14,248 per year. It’s what someone without a degree can anticipate, so Kristy subtracted that from $17,000 to get the value of a writing degree: $2,752.
An accounting degree, on the other hand, was worth nearly $24,000 more than the minimum salary. A job in computer engineering would pay you an extra $40,000 a year.
But hang in there. It’s difficult to place a figure on pleasure; surely, no matter what the bottom line says, aspirations are worth pursuing? Certainly not. If you don’t know where your next meal is coming from, you’re unlikely to be passionate about job, particularly if it demands innovation.
Nearly every participant’s dreams had altered dramatically from the previous decade, according to a 2013 Science research.
When you follow the numbers, it pays out. Kristy can vouch for this. She is now a well-known author. She was able to pay the rent without having to write because of her well-paying engineering work. Essentially, money allowed her to achieve her lifelong ambition.
In the next parts, we’ll look at how she achieved it.
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Lesson 2: Kristy’s Chinese ancestors instilled in her the importance of avoiding debt at all costs.
Did you know that the typical Chinese person saves 38% of their income? In contrast, the Japanese save just 2.8 percent of their incomes for rainy days, compared to 3.9 percent for Americans. What’s the deal with the Chinese — are they just inherently thrifty?
No, not at all. Even before the communists assumed control in 1949, corruption was rampant in China. When you combine it with the absence of formal credit channels like as bank loans, you’ve got the makings of a favor-based society.
When purchasing large objects in the past, individuals had two options: either they had a large debt and left themselves in the hands of others, or they saved until they had enough money to purchase the item altogether. As a result, debt in China has always been seen as a “I own you” rather than a “IOU.”
Kristy is Chinese, which means she’s genetically hardwired to avoid debt at all costs due to her family’s past. The truth is, when you do the math, that’s a very excellent mentality to have regardless of where you reside.
In the fourteenth century, an Italian mathematician called Luca Pacioli proposed the Rule of 72. This is how it works. Divide 72 by the return rate to get the time it takes for your investment to double.
Consider the possibility of a 6% return on a $1,000 investment. The result of 72 divided by 6 is 12. You’ll have to wait 20 years for that $1,000 to multiply into $2,000! Over time, the equilibrium will improve. Over time, you earn more money.
The Rule of 72 is your greatest friend if you’re an investor; it’s your worst adversary if you’re a debtor. Assume you borrowed $1,000 to purchase a television. Typically, the interest rate is 20%. Divide 72 by 20 and you’ll have doubled your debt in 3.6 years. After seven years, you’ll have almost doubled it.
When you put it that way, the Chinese custom of paying off personal obligations over the New Year to avoid being cursed with bad luck makes logical. Don’t be alarmed; it’s not designed to terrify you. In the following part, we’ll look at how you can get out of debt on your own.
Lesson 3: Consumer debt is a financial issue that must be addressed right now.
Debt is a bloodsucker who feeds on other people’s blood. It dries you out completely. Worse, it makes you scared of the sun, keeping you cooped up indoors in a never-ending cycle of labor and payback. Stabbing this bad guy in the heart is the only way to become financially independent.
Consumer debt should be your first priority since it has the highest interest rates. Start by reducing your costs to the bare minimum. It will be painful, but it is required.
As we’ve seen, the Rule of 72 causes your obligations to rise at an absurd pace. When you have a high interest rate, it’s pointless to attempt to save or invest your hard-earned money since you’ll never be able to get out of debt. Do whatever it takes, whether it’s creating a side business, renting out a spare room, or saying “no” to dining out.
Next, order your loan repayments by interest rate, starting with the highest and ending with the lowest. When you’re surrounded by hungry vampires, you should always kill the vampire with the largest hunger first.
This entails paying the bare minimum on all of your credit cards to avoid defaulting, as well as dumping whatever you don’t need for necessities like rent to the nastiest bloodsuckers.
Although it may feel nice to pay off your smallest payment, you are fighting for your freedom, not your ego.
The last stage is to refinance your debts. When you move balances across credit cards, certain credit card issuers offer 0 percent interest rates for a set period of time. Normally, this lasts a year. If you’re certain you’ll be able to pay off a debt in full throughout these grace periods, choose this choice.
These businesses are wagering that you will not do so, so they can boost your interest rate and ruin you.
It’s like running a marathon while carrying a rucksack full of bricks; your strength will be sapped before you even begin. To boost your assets, kill the vampire!
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Lesson 4: If you want to purchase happiness, spend your money on experiences rather than things.
What is the relationship between cocaine and shopping? Surprisingly, a lot of it. When it comes to spending money on luxuries, it’s important to grasp the link between the two.
However, before we do that, let’s have a look at the brain. Dopamine, the “pleasure chemical,” flows through your brain’s major highway, the mesolimbic pathway, and into your nucleus accumbens, which processes dopamine.
Substances like cocaine, as well as overpaying on expensive products, cause this spike. A huge neuronal high is the payoff.
This is when things start to get interesting. The nucleus accumbens not only responds to pleasant stimuli, but also to the anticipation of such sensations, according to a 2006 study published in the journal NeuroImage.
Pleasure is defined not just by absolute dopamine levels, but also by how much dopamine our bodies anticipate receiving.
For cocaine addicts and shopaholics, the brain continually escalating their expectations. People are always on the lookout for that one-of-a-kind initial high, which is why they want ever-larger doses of cocaine and ever-expensive purses.
As a result, no matter how affluent you are, you are unlikely to have fun. This may seem like the start of a traditional moral sermon about how money can’t buy happiness, but it’s not. In reality, it is possible. It all comes down to how you spend your money.
Not all spending is equal; certain sorts go farther than others. When Kristy first started her blog and began getting letters from her followers, she noticed a pattern.
People were unhappier as they accumulated more possessions. Those who had less stuff and spent their money on experiences, on the other hand, were happy with their lives.
Possessions provide a surge of dopamine that wears off over time as your nucleus accumbens adjusts. It takes a lot longer to lose interest in acquiring new skills or going on vacations.
You’ll always be able to play the piano if you practice every now and then, and those vacation photos from Rome will always remind you of your week in the Eternal City with your spouse.
Lesson 5: Investing in real estate isn’t as safe as we’ve been taught to think.
The majority of people are afraid of borrowing money, but there is one exception: a mortgage. Buying a house, according to popular opinion, is not just a symbol of maturity but also a sensible investment. Isn’t it true that you may always sell for a profit at the end of the day?
That is not something I would say. There are a lot of hidden fees when it comes to real estate. Let’s have a look at the figures.
According to the US Census Bureau, a family lives in their house for nine years on average. These households often invest in real estate in anticipation of increasing property values. That rate has fluctuated with inflation in the past, but for the sake of simplicity, suppose that prices grow by 6% every year.
Assume our family, the Smiths, purchases a home for $500,000. Nine times 6% – or nine years at 6% inflation – is $844,739. $344,739 is the profit.
No, no, no, no, no, no, no, no, no, no To acquire the property, the Smiths will require a title search from the land register office. It’ll set you back $1,000. The cost of recording is $150. For an additional $1,000, a lawyer will prepare the documentation.
There’s also insurance to consider. Rates vary around the United States, but 0.5 percent is very typical. Over the course of nine years, this equates to $22,500. An additional $45,000 is added to the bill by a 1% yearly property tax. Realtors suggest that homeowners put aside 1% of their home’s worth for upkeep each year, and the Smiths follow this advice. Another $45,000 is on the way.
It’s also not inexpensive to sell. Commissions of 6% of the selling price amount to $50,684 in total. The land transfer tax is 1.2 percent of $10,137. There’s also a $1,000 charge from a different lawyer.
This amounts to $175,571, or 51% of the Smiths’ earnings. However, there has been no mention of interest. After making a ten percent down payment in cash, the Smiths borrowed the remaining funds from their bank. They paid a total of $162,033 in interest.
It’s over 98 percent of the original purchase price. When we first began, we believed that the Smiths’ home would appreciate by 6% every year. Inflation in the United States is about 2%, which is far higher than the real rate. The Smiths would have lost money if this were the real world!
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Lesson 6: When determining whether or not to purchase a property, remember the “Rule of 150.”
We showed in the last section that the expenses of purchasing, owning, and selling a property exceeded the rewards in the case of a hypothetical American family. The conclusion of this narrative isn’t that you shouldn’t purchase a home; rather, you should think about whether it’s a good idea for you.
If you ask a realtor, they’ll tell you it’s all really straightforward. You should purchase rather than rent if the monthly mortgage payment matches the rent for an apartment or home identical to yours. If you look at it attentively, you’ll see that it’s a bit more complicated.
In this case, the Rule of 150 comes into play. You may use this tool to compare the true cost of owning a property to the savings you’d make if you didn’t rent. The steps are as follows:
Only roughly half of your payments on a normal 30-year mortgage go toward the loan itself during the first nine years; the other half is used to pay off interest on the loan.
Maintenance and insurance expenditures are generally equivalent to the interest on a normal mortgage for the first nine years, so that’s another 50%.
Multiplying your monthly mortgage payment by 150 percent yields your real monthly installments.
After you’ve accounted for all of your bills, that’s how much you’ll have to pay for your house each month. Let’s suppose you’re looking at a $1,500 monthly mortgage payment. Multiplying it by 150 percent yields a genuine cost of $2,250.
If your Rule of 150 cost is more than your rent, it can make sense to stay in the rental market; if it’s lower, you might consider purchasing.
Kristy was living in Toronto, one of Canada’s most expensive cities, when she first explored purchasing a home.
A million dollars was paid for a single-person flat. The cost of living has spiraled out of control. She realized she would never be able to purchase her own house after using the Rule of 150.
It unintentionally unleashed a can of worms. If she wasn’t going to spend it all on property, what was she going to do with it? Continue reading to find out!
Lesson 7: Investing in indexes has a lesser risk than individual stocks.
Poor people purchase garbage, the middle class buys homes, and the affluent buy assets, according to American business expert Robert Kiyosaki. He was implying that wealthy individuals spend their money in items that would increase their wealth. But you don’t have to be a billionaire to follow in their footsteps.
Investing may be broken down into two groups. One alternative is to follow the example of Wall Street gurus and spend a lot of money on research and clever algorithms to choose the best firms. The second approach is less expensive, easier, and, most importantly, less dangerous.
It’s referred to as index investing. Investing in indices rather than individual equities is the concept. The house always gains money, regardless of the result of the race. Let’s have a look at it.
An index is a list of publicly listed firms that are ranked by their market capitalization, or total worth. When you buy in an index, you’re basically wagering on all of the listed companies.
A single failure will not wipe you out since the index comprises numerous high-performing firms. It is impossible to declare bankruptcy unless all of the names in your index do so at the same time.
That is very improbable. Why? An beautiful built-in barometer comes with index investing. If a company’s value rises, the index will automatically buy more of its stock, and vice versa.
When a tech company launches a world-beating smartphone and its stock climbs, the index boosts its holdings. When a vehicle firm is in difficulties and its stock falls, an index dumps its shares. Companies that fall from the top 500 to the bottom 501 are completely eliminated from the index.
Major indexes like the S&P 500 – an index of the 500 largest companies – work by gauging the stock market as a whole this way.
Investing in indexes is also beneficial to your bank account. There’s no need to engage a hands-on fund manager since the premise is so straightforward. In the United States, for example, index funds charge just 0.04 percent in fees, which is 25 times cheaper than actively managed funds. What about the commission on sales? Investing in indexes is also good for your wallet. Since the concept is so simple, there’s no need to hire a hands-on fund manager. Index funds in the US, for instance, charge fees of just 0.04 percent – 25 times less than actively managed funds. What about the sales commission? $0..
By requesting that your money be placed in index funds, you may make your bank manager sweat.
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Lesson 8: No matter how much money you make, you can retire early if you save enough.
There’s a strong possibility you’ve fantasized of retiring early. When looking at one’s financial account, however, most individuals swiftly dismiss such notion. You can’t afford to retire until your mid-sixties if you don’t make it large, right?
That is incorrect. The much you save, not how much you earn, determines when you can retire. You will never be able to retire even if you earn and spend a million dollars every year since you are completely reliant on your employment.
On the other hand, if you make $40,000 per year and spend $30,000, you have already saved 25% of your income.
Because most individuals save between 5% and 10% of their wages and their investments return between 6% and 7% yearly, 65 seems to be the “typical” retirement age. If you plug those figures into a spreadsheet, you’re looking at 40 to 45 years of effort.
You must raise the amount you save in order to minimize that time. This serves two purposes. To begin with, it lowers your living expenditures, reducing the size of your retirement portfolio — the amount of money you’ll need to retire.
It also increases the amount of money in that portfolio. Consider it like a race: you’re sprinting towards the finish line. Small adjustments may have a tremendous impact.
You may cut five years off your working time by boosting your savings rate from 10% to 15%, for example.
You’re still undecided? Let’s take a look at Paul and Jillian, a fictitious couple. Their total annual revenue is $62,175. In the United States, this is the median household income. After subtracting 15.2 percent for taxes, you’re left with $52,724.40.
Paul and Jillian will turbocharge their funds if they read these pages and opt to boost their savings rate. The pair lives in a modest apartment in a low-cost city, cooks at home, and utilizes Zipcar car-sharing services. They put $12,724.40 into their portfolios each year and pay $40,000 to meet their expenses.
Let’s assume the interest rates they’re receiving are just 6%. Paul and Jillian will have a million dollars in 30 years, even if they never get promoted or obtain higher paid jobs. If they started at the age of 24, they may retire at the age of 54, 11 years ahead of plan!
Lesson 9: Preparing for early retirement is simpler with a smaller goal portfolio.
What is the bare minimum you need to save in order to retire early? Researchers posed this question in a seminal study published in the investing journal AAII in 1998.
Stock market data was used to model what would happen if a hypothetical group of retirees withdrew varying portions of their investments each year after they retired. What would happen if “Alan,” for example, took 10% of his $500,000 savings each year?
When your yearly living costs are less than 4% of your portfolio’s total value, your portfolio is self-sustaining. This is what is referred to as a safe withdrawal rate. To calculate the size of your goal portfolio, multiply your yearly costs by 25. If you require $40,000 each year, you’ll need a portfolio worth $1,000,000.
Isn’t it a substantial sum of money? No issue, but don’t let it deter you; there are other options as well.
Consider financial independence on a limited basis. You may attain financial independence and have greater freedom and spare time with a modest portfolio.
Assume you earn the $62,175 median family income in the United States and need $40,000 per year to satisfy your living expenditures. If you work part-time and make $28,000 after taxes, you’ll have a budget gap of $12,000 every year.
Your new goal portfolio is $300,000 when you double that figure by 25. After you save that much, you may start semi-retiring!
Another alternative is to use geographic arbitrage. You may retire in a nation with a weaker currency, such as Mexico or Thailand, if you earn your income in a country with a strong currency, such as Germany or the United States.
For instance, Kristy and Bryce learned that a nice lifestyle in Vietnam can be had for roughly $1,130 per month.
If you make the local average monthly wage of $150, it’s unaffordable; if you earn the average monthly pay in the United States, it’s not so difficult. What is the current state of your goal portfolio? $13,560 is the result of multiplying $1,130 by 12. When you multiply it by 25, you get $339,000 as a result.
Here are a few pointers to get you started on your path to financial freedom. All you have to do is ask one simple question to yourself. Is it more vital to have your independence than to have a lot of money? If you answer honestly, you will make better financial judgments.
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Final Thoughts
If you want to get a grasp on your money, do the math.
As a result, you should disregard feel-good advice like picking a topic you like rather than one that would pay you enough to survive on. When societal trends aren’t good for you, you should likewise fight them.
When the statistics are crunched, you could discover that putting your funds in the stock market is a better alternative than purchasing a property and accumulating debt.
Why?
If you increase your money while avoiding terrible interest rates, you’re on your way to financial freedom. It signifies you’re getting closer to the early retirement you’ve always desired.
Additional Reading
If you enjoyed Quit Like a Millionaire, you may like the following book summaries as well:
Obtain a copy of the book, Quit Like a Millionaire.
If you’d like to purchase Quit Like a Millionaire, click on the following links:
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Alternatively, you may go through all of the book summaries.
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If you’re reading this book synopsis, you must be keen to study and develop your profession.
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“Kristy Shen is a personal finance expert, blogger, and author of the book ‘Quit Like a Millionaire’. She has been featured on CNN Money, CNBC, Fox Business News, and The New York Times.” Reference: kristy shen blog.
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