How long will it take until I can set my cubicle on fire, tell my boss to go f*** himself and chill on the beach all day long?

Let’s find out!

What is surprising in financial planning is that the duration until you have enough savings to live from them doesn’t depend on your expenses, it basically only depends on your savings rate — the share of your income you are able to put aside:

The savings rate is the share of your income after you deducted all expenses:

1. Expenses = 6’000
2. Income = 10’000
3. Savings = 4’000
4. Savings rate = 40%

What is the savings rate for?

The savings rate is one of the most important performance indicator for financial freedom, its tells you if you are moving towards financial independence and if yes, how fast.

Let’s assume you are just starting with a net worth of 0, here are the results based on your savings rate:

• Savings rate: negative = will not happen, you are even moving away
• Savingsrate: 0% = will not happen, you are not moving
• Savingsrate: 10% = 40 to 75 years
• Savingsrate: 20% = 30 to 40 years
• Savingsrate: 30% = 23 to 30 years
• Savingsrate: 40% = 18 to 23 years
• Savingsrate: 50% = 14 to 17 years
• Savingsrate: 60% = 11 to 12 years
• Savingsrate: 70% = 8 to 9 years
• Savingsrate: 80% = 5 to 6 years
• Savingsrate: 90% = 2 to 3 years
• the time until financial freedom / retirement is based on the hypothesis that your savings yield with 4% to 7% annually and that you can retire with a safe withdrawal rate of 4%.

So what does that mean for you?

The good: Most of us are not starting with 0, so you will most likely have a headstart on the numbers above. It is totally possible to achieve financial freedom early in life for most of us if you accept to adapt your lifestyle , invest your savings and spent a bit of time to plan for it.

The bad: If you have now a savings rate of 0–30%, the optimisation you will have to do will only be possible if you are willing to leave the comfort zone and change your spending habits, learn about investing and stuff like good salary negotiation. In short: it’s work.

The ugly: the earlier in life you start the easier it is to achieve. Your investments need time to work in your favour and every year you miss, will make the whole journey longer. If you are in dept, they are working against you and pulling you even further from retirement every year.

If you want to know how to achieve financial freedom / retirement in details, you can subscribe and I will walk you through all the steps here with my FREE FIRE Handbook -> It is still in progress and I will release a chapter every month.

Please let me know all your questions in the comment, I will reply to all of them personally.