1-Sentence-Summary: The 4 Minute Millionaire is a collection of 44 short lessons sourced from the best finance books, each paired with an action item to help you get closer to financial freedom in just 4 minutes a day.
Read in: 4 minutes
Favorite quote from the author:
When I went to high school, I learned nothing about finance. Perhaps you can relate. The first finance book I read was Rich Dad Poor Dad in 2014. From the first page, I was fascinated. I’ve read many finance books since, and in 2021, I decided to write my own. The 4 Minute Millionaire is the book I wish someone would have given me way back when.
If you were to start from scratch, which lessons from the best finance books should you follow in what order to achieve financial independence? The book is my answer to that question, and thanks to its modular format, you should be able to find the right idea at the right time, no matter where on that journey you currently are.
Summarizing my own book, a book that is as much the result of this project, Four Minute Books, as it is the result of my decision to become a writer, feels like coming full circle. I summarized books to learn how to write books. I know it’s ironic, but I think it goes to show that no matter how small you start, there is little in this world you can’t do if you set your mind to it…
…and that’s also the first of 3 lessons I’d like to share from my book about money:
- Take pride in starting, even if you can only start small.
- Instead of avoiding risk and thus also avoiding wealth, you should manage it.
- There are 7 new asset classes that make it easy to get excited about investing.
Ready to become a better saver, spender, and investor? Here’s a financial education in 4 minutes!
Lesson 1: Even if you can only start small, your ability to start matters.
When it comes to achieving financial independence, many people defeat themselves before they even begin. If you think learning about money is useless until you have a lot, you’ll likely never accumulate any of it.
“Do not discount your ability to save and invest because life forces you to save and invest small at first,” I wrote. “It matters. What you do with your money counts more than how much you have.”
In Playing With FIRE, Scott Rieckens gave the example of a woman who didn’t see a way to early retirement because she and her boyfriend made less than $50,000 per year between the two of them. Eventually, however, they found ways to live on just 65% of that money, thus saving and investing some $18,000 per year!
Nowadays, $100 can buy you a fractional share of Amazon, an entire bundle of personal finance courses, or a piece of equity in someone’s crowdfunding campaign. Even with small amounts of money, the possibilities are almost endless.
Don’t feel bad about starting small. Take pride in it. Just start, and you’ll be well on your way.
Lesson 2: When you avoid risk, you also avoid wealth — so don’t reject risk, manage it!
In 2018, Tom Lee from Fundstrat had a bad summer. A year before, he had hailed Bitcoin as a replacement for gold and made a bold price prediction. Worse, he had advised his clients to pour millions of dollars into the asset!
Now, the price was down 75%, and, for a total of three years, Tom Lee looked like an idiot. And then, suddenly, he was a genius. Bitcoin surpassed its 2017-high and outpaced Lee’s past predictions.
“Risk” means that something might go up or down, but it also means that it’ll go somewhere. Take no risk, on the other hand, and you — or your money, in this case — is guaranteed to stay put. “There is no asset without risk, so if you avoid risk, you’ll also avoid building wealth. The trick is to make the risk endurable, both financially and emotionally.”
Risk is something to be managed rather than avoided. In Tom Lee’s case, he advised his clients to only put a small portion of their portfolio into Bitcoin, and I’m sure he gave them a point at which to cut their losses as well.
“Make the risks you take small enough so you can tolerate them, and then wait for your hypotheses to play out. That’s what great investors do.”
Lesson 3: Learn about these 7 new asset classes to get excited about investing.
The easiest way to stick to something is to have fun doing it. Therefore, if you want to build a long-term habit of investing, which is necessary for that habit to pay off, you need to find a class of investments that gets you excited.
Here are 7 that might qualify:
- Crypto. I know. So many buzzwords, so many opinions. But if you pick one that sounds interesting — NFTs, blockchain, store of value — and learn a little more about it, you’ll soon be able to judge this new asset class for yourself.
- Fractionalized art. Companies like Masterworks now allow you to own tiny pieces of a Picasso or Banksy. Pretty cool, huh?
- Pre-IPO shares of famous startups. I knew AirBnB was a great investment in 2012. Unfortunately, I couldn’t invest in it. No public access. Now, with places like EquityZen, you can — invest in great startups before they hit the stock market, that is.
- Rolling funds from top venture capitalists. Not only can you now invest into great startups at the same time VCs do, you can also invest alongside those VCs. Rolling funds make it possible.
- Crowdinvesting. Want to invest in your favorite Youtube channel? If they hold a campaign on Crowdcube, you can.
- Music royalties. Would you like to get paid every time Jay-Z plays on the radio? Music royalty exchanges like SongVest make it possible.
- Crowdsourced index funds. Many stock apps, like Trading 212, now have features that allow you to build your own index fund. If you think you can beat the big guys, now’s your chance!
The best thing about these asset classes? They’re brand new. Usually, the earlier you are as an investor, the higher your returns will be. Therefore, the best time to get excited about investing is always today.
The 4 Minute Millionaire Review
Since I wrote this book, I might be a tad biased in reviewing it. Therefore, I’ll leave the last words about The 4 Minute Millionaire: 44 Lessons to Rethink Money, Invest Wisely, and Grow Wealthy in 4 Minutes a Day to others.
Michal Stawicki reviewed it. So did J. R. Heimbigner. Uptime turned it into one of their knowledge hacks. And there are plenty of reviews on Amazon too.
My one-sentence pitch? Whether you want to build a saving habit, pay off debt, or invest like the pros – if you’re ready to look at money from a new perspective and build long-term wealth, this book is for you.
Who would I recommend our The 4 Minute Millionaire summary to?
The 18-year-old high school graduate who wants to learn all about money but has been let down by traditional education, the 49-year-old parent who wonders what to teach their child about money beyond saving, and anyone who wants to achieve financial freedom but doesn’t know where to start.