I started Savvy Savvings because I wanted to help people get their finances in order. I knew I wanted to cover budgeting, paying off debt, saving money, and more!
I also knew that I really wanted to write about retiring early and opening people’s eyes to the fact that it is possible!
I just had no idea how to put together all of the information I have learned and convey it in an easy-to-understand way.
And now I don’t have to! Kristy Shen explains the whole process that she used to retire at the age of 31 and the great thing is, it’s reproducible by anyone!
And she has this way of writing that makes you not want to put the book down and you can’t wait for the next chapter!
I finished the book really quickly and I’m starting to reread it just to fully understand all of the math involved!
But if you are curious and looking for actionable steps you can take to move you towards retiring as early as possible, then keep reading! In this Quit Like a Millionaire summary, I’m going to go over the highlights of the genius in this book!
You may also like: What Does FI Mean? – 4 Steps to Living your Dream Life!
Part 1 – Poverty
Childhood
Part 1 of the book is about Kristy’s early years where she grew up in poverty in China. At one point, her family had to live on the equivalent of $0.44 in the United States! How insane is that?!
Because of her childhood, Kristy developed a Scarcity-Mindset, because she was forced to, given her circumstances. But she was grateful for this and believes this helped shape her future spending habits!
I found the stories about her life and her fathers’ life in China fascinating. Her life is unimaginable to most of us in the US. It made me very appreciative of what I had growing up. But also, it made me wonder if I could’ve benefited from being taught a similar mindset early on as a kid.
POT (Pay-over-Tuition) Score
Eventually, her family migrated to Canada and a whole new world opened up to Kristy!
She talks about peach syrup, a cardboard box, and a can of coke! (You’ll have to read the whole book to find out what any of this means!)
As she got older, education was more and more important and college was on the horizon.
Kristy came up with a formula (the POT score) to help her determine what she should go to school for and talks about how you shouldn’t follow your passion (yet).
I really wish I had known about this before going to college myself! If you have kids nearing college age, I would encourage you to show them this formula to help them on their path!
She also does a deep dive into debt and how it should be avoided at all costs. But she goes into a lot of detail about student loan debt specifically and ways to pay them off quicker or have them forgiven if you work in specific fields.
I have a post about student loans and how to avoid them if you want to check it out!
Part 2 – The Middle Class
Spending
In this section, Kristy talks about her short stint buying purses. I can totally relate to this section! Only my shopping stint lasted much longer and I still struggle with it today!
I feel like I could’ve benefitted/still can benefit from having at least a little bit of a scarcity-mindset! But changing your mindset that has been hardwired to spend money takes a long time!
But you can check out my post about money mantras and how I have been using them to help change my mindset and how you can benefit from them too!
Then she goes into the science behind why people get addicted to buying things. It was very eye-opening!
She also talks about how spending money on experiences doesn’t have any of the same drawbacks that buying things does.
Housing
Now, this section really blew my mind! I personally have always wanted to buy a house, either for personal use or investment or both. I have always felt like owning real estate helps you grow wealth.
And while it can help you grow wealth in a lot of instances, Kristy breaks down the math and explains why it doesn’t always make more sense to own a house versus renting a place.
Because I live in such a high-cost-of-living city, I don’t think I could ever make the math work to where it made sense to buy a house here in Los Angeles.
I never considered all of the extra costs that come along with homeownership. They really do add up!
Kristy does a great job of showing the math once again and debunks the whole “housing is an investment” thing! You gotta read it to believe it!
Investments
This is the section where Kristy starts talking about investing. She tells a story about how she went into the bank and started asking questions about their investment funds.
The bankers were very sketchy and couldn’t really answer any of her questions straight. She came out out of the bank feeling like she would be ripped off if she gave them her money!
Then she got to work learning about growing her wealth from millionaires themselves.
And, voila, she found index funds! Index funds have low fees, they beat the actively managed funds and your investments can’t go to zero!
Kristy shows more convincing math and numbers to prove all these points and goes into detail on how to design your portfolio!
I did a lot of highlighting in this section and will be going back to this section ASAP to design my own portfolio!
Taxes
“Taxes are for Poor People” is the title of Chapter 12. I couldn’t agree more, but understanding this is easier said than done!
Kristy dives into and explains tax shelters and tax deferments and the tools you can use to reduce your taxes during your working years.
Then she explains how different types of income are taxed. Earned employment income is taxed one way, and dividends and capital gains are taxed differently.
Once again she shows lots of examples of the math to explain these concepts really well for the average person.
The 4 Percent Rule
Finally, she talks about discovering the 4 percent rule and how you use it to retire early.
She also gives shows some great graphs showing the path to early retirement isn’t about your income, it is all about your savings rate!
The higher your savings rate, the less your investment return matters, and the quicker you get to retirement!
Part 3 – Becoming Wealthy
Cash Cushion and Yield Shield
In this final section, this is where it really gets interesting! Kristy basically talks about “the problem with the 4 percent rule” and how she used a cash cushion and yield shield to combat this.
She talks a lot about how she is risk-averse so she makes sure that she covers her bases for everything she does.
I really can’t explain this well, but the math works and you gotta see it for yourself to believe it!
Travel
Once Kristy and her husband Bryce reached their goal and had their cash cushion and yield shield in place, they set off for one year of travel around the world!
Kristy came to the realization that all of her dreams were coming true as every experience seemed to top the last!
They had never considered that they could travel full-time and keep their expenses the same. But when they got home from that first year abroad, Kristy crunched the numbers and they spent exactly the same amount as they did at home!
She talks about travel hacking and travel insurance and visas and how you can use travel to retire even earlier!
Mind blown!
Backups
Kristy continues to provide more backup options and ways you can get to retirement quicker!
Scary Things
And, finally, Kristy goes through all of the things that could present obstacles (inflation, insurance, health care, and kids).
Once again, Kristy debunks all of these worries and gives real numbers and/or knowledge about how they can work well in early retirement!
I especially found the chapter on kids interesting! I know many people may not agree that you can travel full time with kids but Kristy gives a good argument for it!
I may test this out myself one day and will report back with details!
Final Thoughts on the Quit Like a Millionaire Book Review
I HIGHLY recommend this book to anyone who wants to not work for the rest of their life! Quit Like a Millionaire should be at the top of your reading list because the sooner you start the faster you will get there!
Even if you like your job and want to work until the “normal” retirement age, I think you can still benefit from this book because your job is never guaranteed and you can’t put a price on FREEDOM!
Why not work towards being financially secure so that you can always follow your passion regardless of what you get paid to do it?!
The most powerful quote from the book:
“If you understand money, life is incredibly easy. If you don’t understand money, like the vast majority of people, life is incredibly hard”
Don’t struggle through life! Make life easy for yourself!
If you want to check out Kristy’s website, it’s at Millennial-Revolution.com.
Get Quit Like a Millionaire at Amazon today!
If you want more info about FIRE, check out my post on what does FI mean! Let me know in the comments if you want to Quit Like a Millionaire 🙂