How To Become Financially Independent: The Basic Plan To Stop Depending On Income From Work

How To Become Financially Independent: The Basic Plan To Stop Depending On Income From Work

Becoming financially independent is a dream that many people cherish. To no longer depend on a job and to arrange one’s days according to one’s desires. But few people actually do it because they don’t have a plan. Discover a simple plan to become financially independent in 20 years maximum.

I find that the subject of financial independence comes up regularly either on blogs or in magazines under titles closer to “How to live without working” or “How to become an annuitant”.

In any case, the idea is the same: how to stop depending on income from one’s work?

This question was not as present in the past years because work was more abundant and retirement was assured. Today, people are afraid and their work doesn’t necessarily make much sense anymore. I have really felt this turning point in recent years.

But being able to live off your income outside of work is not so easy. It’s not just something you have to say to make it happen.

You have to build a solid plan based on your needs, skills and personality.

One thing is certain, financial independence means greater freedom for those who are able to take advantage of it. And it is often the most powerful motivating factor.

For most of us, and at the risk of discouraging some, becoming financially independent takes time and the calculator won’t tell you otherwise.

Indeed, we often have a salaried job with an average salary and that’s not the way to get rich in 1 year (even with a blog because I know it’s a fashionable subject).

Building a plan to become financially independent

So to become financially independent, you need a plan.

That plan must take into account:

  • our life goals…
  • our current and future income levels
  • our way of life
  • our family situation

Our life goals are the cornerstone of our plan.

They determine the level of income we will need. It is this level of income that we will then have to produce with the capital we have accumulated and without working!

Knowing yourself well is fundamental.

This level of income must take into account the present and future family situation. If you want a beautiful house with a pool and four children, it is not impossible, but it will be harder than if you are satisfied with a two-roomed house and one child already seems a maximum.

The other factor to take into account is your lifestyle.

A simple lifestyle with “free” pleasures (walking, talking with friends, …) will allow you to have fewer needs than those who dream of going around the world in the most beautiful hotels on the planet. I know I’m taking an extreme case but there are people who have pleasures that require more income. So your relationship with the consumer society is very important.

What capital to become financially independent

Once your lifestyle and goals have been set, you need to quantify the amount of money and/or assets you need to have to cover all your expenses and live the life you want.

It’s not that difficult.

You take a piece of paper and a pen. Then you write down all your projected expenses. You get a number that you can adjust for inflation each year based on how long you think it will take you to build up this wealth that pays off.

Let’s suppose that this sum is equal to 1000 GBP without the cost of housing.

Why such a sum? Does it seem little to you? A minimum wage with paid housing is not bad in fact. I’ll let you do the calculation. If you are in a couple with a child for example, you will need more. But your wife may have the same reasoning as you and you will leave on the basis of 2000 GBP.

I’ll take the example of a childless couple with modest needs once they become independent:

  • A simple lifestyle where time is more important than money.
  • Life goals: writing books and living in the country.
  • Necessary income: 1000 GBP excluding housing.

It’s good to write it but it’s time to get on with it…

People immediately imagine complicated systems, equations in all directions, hours looking at the screen of their title account.

Of course, none of this is necessary. Just common sense and investments in line with the objective. It’s not that difficult. And it’s even easier with two people than it is on your own. Provided you find the right person, of course.

Paid housing is actually quite easy if you are two people and are willing to take a roommate in your home. Accommodation in the provinces costs around 150,000 GBP (estimate for decent properties in towns of sufficient size), or 75,000 GBP per person. There are 35,000 GBP of contribution and 30,000 GBP of loan each over 20 years. A roommate will come to cover the amount of the loan. Your participation as an individual will therefore only include this 35000 GBP contribution.

It remains to generate 1000 GBP. Warm up the calculator. To generate 1000 GBP of income, at 4% net, you need 250,000 GBP of capital. There are two of you, on a personal basis, so you need 125,000 GBP.

The final bill is therefore 125000 + 35000 GBP = 160000 GBP.

I have not taken into account the fact that you may have a small activity that you do not consider as work and which brings you an additional income. In which case the capital is even less.

160000 GBP is certainly a sum. But over 15/20 years, it is largely feasible.

Financial independence will slowly be acquired for most of us because it depends on our capacity to save, which is close to a few hundred GBP (from 100 to 500 GBP). We just have to start early before benefiting from the power of compound interest.

And in 15 years you have time to develop skills on the stock market, real estate, the economy and also to find small business ideas.


This plan was not very far from my original plan that I had to rethink for personal reasons. But it is still valid and accessible to the majority of people with simple lifestyles.

I have shown you in this article that by knowing each other and with a plan, it is possible to achieve financial independence.

In summary:

  • Knowing yourself + Defining your life goals + Calculating your income
  • Deduct the necessary capital + Take action.

The rest is known, you have to save and invest. There’s more to it than …