Tips & tricks - 15 07 21 How to become financially independent?

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Spending more time on things you really like? Have you heard of the term "FIRE" (Financial independence and retire early)? This refers to being fully financially independent and being able to retire early. But how do you do this, you might ask? Read on.

1. Determine how much money you need to become fully financially independent

Determine what you need to become financially independent. Rule of thumb is to have saved 25 times your yearly expenses. For example, if you spend €25,000 a year, you must have saved €625,000. Even better is to calculate some margin and take 30 times your annual expenses. 

So start by taking a close look at your annual expenditure. Does this seem like a lot of work? Then use the ROOV app. It gives you a clear overview of how much you spend per category.

 

2. Take a critical look at your expenditure

In order to reach your final goal more quickly, it is best to take a critical look at your expenditure. Are there any major expense items that you can save on. Think of your transport, food, housing costs, energy costs, insurance. ROOV compares for you whether you can save on energy and insurance. You decide whether you want to switch or not.

3. Determine net assets

Now that you know how much you spend each year, it is also important to know what your net worth is. List your assets: savings, investments, ... And subtract your debts. You can then compare this amount with your final goal.

4. Salary

Your regular job and the income it generates are very important to reach your final goal. A pay rise can ensure that you can save and invest more. So make sure you continue to specialise, so you can create added value not only for yourself but also for your employer and thus ask for a raise.

5. Provide additional income

  • Think about investing in real estate. With a property that you rent out, you can use the income to cover your fixed costs. 
  • Start investing: See how much you can free up to invest. How much can you miss now and that you can invest for later. 

Tip: start by investing small amounts and don't wait until you have a large amount to invest.

Start your journey to financial independence today and download ROOV.

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