Retire At 30: Masterplan For Financial Freedom

Almost two weeks ago I found some interesting and frugal F.I.R.E. movement blogs on the internet where some controversial articles about planning for financial freedom were published and that made me even more curious about it.

So, I made some further research on the subject and tried to find out what the F.I.R.E. Movement is all about. Now that I have a broader knowledge as well as a better understanding what the frugalist F.I.R.E. movement is all about, I have decided …

… to retire at 30 and share my master plan for financial independence with you here.

Many out there have published their plan and are criticized for the fact that there are far too many factors that can not be influenced and no one could ever live on so little money – sometimes under $1,000 a month. Or it has been said that it is simply unrealistic to stop working at 30 years old.

That’s why I’m all the happier today to introduce my own plan and thereby initiate a lively discussion with you. I’m probably going to bump into one or the other today, but I look forward to hearing your opinions and discussing it with you.

Why financially free with 30?

Some of you are certainly asking the question of why I strive for that goal at all. At this point I would just like to point out that I will present my view and motivation for financial freedom in general in the coming weeks here on the blog.

Before starting this blog, I’ve read a lot of financial books and everyone emphasizes how important it is to set big goals. If you set yourself only small goals, like retiring 5 years earlier, you do not have to strain and can sit back and relax.

In the case of big goals, on the other hand, they challenge you and force you to seek new ways. In the worst case, although you miss your original goal, in this case you still come much further than by simply targeting a small goal.

That’s why I decided to start this blog and decided to stop working at the age of 30. I figured: If things will go “bad”, I might reach my goal at the age of 35 “only”. But it would still be worth the journey.

I also found a very inspiring quote from Peter Thiel saying…

What do you have to do to reach your 10-year goals in 6 months?

So why would you want to reach your goal later, when you could achieve it earlier? Why shouldn’t you try to reach your goal as soon as possible?

I think in many cases we prefer to play it safe by setting our goals too small. We do not even get into the situation that we critically question our way and look for other ways. That’s how it was with me, at least until now.

My initial situation

Maybe a few words about my initial situation – at the moment I am 20 years old and do not currently have a single investment on the run. I work as a freelancer for an American marketing and social media agency. On 31/12 I will celebrate my 21st birthday so that I have 10 years to achieve my goal of financial freedom.

On 01/01/2019 I will start my frugalist journey.


However, as I am still living with my parents at the moment, this keeps my expenditure of admitted masses very limited. However, I have a girlfriend and we plan to move in together in the near future.

So I guess I’ll initially spend $1,200 a month on spending, but they will continue to increase over time. The future development is of course very difficult to estimate. So I’m just assuming that I’ll have an average monthly expenditure of $1,400 over the whole time. That makes it easy to calculate and in my opinion is also a conservative assumption.

However, I will keep a budget book to be able to accurately determine and have an eye on my expenses all the time once my journey starts.

Note: Maybe it will not be possible for you to cover your lifestyle with $1,400. However keep always in mind, that I currently have no particularly expensive hobbies or necessarily spend a lot of money on consumption. But it can change at any time during my journey.

How much must my fortune be?

How much money do I have to invest in total to have $1,400 a month?

Every year I would have to make $19,000 in dividends or other income to keep $16,800 net. That’s equivalent to the required $1,400 a month. Assuming a safe withdrawal rate of 4%, I would need a fortune of at least $475,000.

For my further calculations, I simply round generously to $500,000 to make it easier.

What can I save as a self-employed person?

With my job as a content creator I make for now on average $2,000 per month working on average for four hours a day. If I find a second customer offering the same terms I would be able to double the money by just working eight hours a day.

By continuing to work part-time at the same terms for the coming ten years I would be able to grow my investment capital to almost $100,000 in assets. However, this amount is not enough for financial freedom.

If I would work full-time making $4,000 per month I would be able to double my income and save more keeping my costs at the same level as they are as a part-time worker.

How does it look now? Financial freedom achieved?

With assets of over $400,000, I would have more than quadruple my assets in ten years compared as part-time freelancer, but for the financial freedom, it would still not be enough.

I assume that I…

The big problem with this path is the amount of assumptions that are made.

For example, I assumed that a return of 6% per year would be achieved. If that does not happen, I could suddenly have $50,000 less a year.

I assumed that my expenses would stay at $1,400 throughout the years. What if I have to increase my expenses for some reason? Only $200 more per month in expenditure means that I end up with just under $30,000 less in assets.

What happens if I lose a client and earn less income during a certain period of time? Then again the plan does not fit!

Or what if I can no longer work or become seriously ill?

You can see that a lot of things can happen that I have little influence on.

The returns on the stock exchange, promotions in the job, my own health and my other life circumstances.

But even if everything went smoothly and I was supposed to be overly lucky, as a freelancer I can not achieve financial freedom at 30 with my work alone. With the revenue as a part-time freelancer the situation would be even worse.

Incidentally, to own a fortune of $500,000 at the age of 30, I would have to save and invest at least $3,200 a month.

No real financial freedom

Meanwhile, I even think that you as a civil servant or employee you can not really be financially free. You will never get to the point that you have a $10.000 passive income per month and do not have to pay extra attention to the money.

You are only financially free as long as your spending stays at the current level and you do not want to change anything in your life.

After many years of saving, you can reach the point that your expenses are covered by dividends or rental income. But then it is usually only just enough to cover the current costs.

And most of all, realistically, it takes at least two decades to reach financial freedom in this way.

For this reason, MJ DeMarco (self-made millionaire) refers to this path to wealth in his bestseller (Millionaire Fastlane) as the Slowlane. I also devoured his second book (UNSCRIPTED) recently and am now absolutely convinced:

REAL financial freedom as an employee or civil servant = IMPOSSIBLE!!!!

As a civil servant or employee, you can not achieve financial freedom. Or rather, it wouldn’t be easy. Now I probably have offended so many people. That’s probably why there will be a lot of detailed and opposite comments.

Therefore, I would like to explain in more detail why you need a high income in order to achieve Financial Freedom.

He has it easy…

On the blogs of other frugalists there have been many comments from many different people in recent years. Usually the most polarized comments of readers are for the people who had a high income of over $5,000 a month.

You could read statements like:

“Yes, but not everyone is so lucky to get such a good job as an employee. If I were in his place and had his income, I would have been financially free for a long time already. He has a comfy situation to talk about financial freedom with his high income. For me, financial freedom is not possible.”

To be honest, it does not surprise me anymore that most of the wealthier people do not want to talk about money and wealth anymore. Everywhere in financial blogs, there is a lot of envy and many attribute happiness to a high income.

It is just as if you could not influence the amount of your income yourself. As an employee, this may indeed be very difficult in many cases to increase your own income. I just wanted to show that through the first part of my article. However, nobody can stop you from doing anything by working on your own to build up a passive income and thereby massively accelerate your path to financial freedom.

Financial freedom through independence

Maybe I should just take a few examples at this point to illustrate the importance of a high income:

In my opinion, Jim is a good example of what you can achieve through self-employment. He is a millionaire in his early thirties and can live very well through passive income from stock dividends. How did he achieve that? He started to build an online business at an early age, earning millions in sales.

He saved part of his revenue and recently sold the shares of his company. As a result, he can now withdraw from active professional life. And unlike most employees, he has not lived from $1,000 a month over the last 10 years, working 40 hours a week. In part, he even worked much less.

Or let’s take Rick as another example. He has created value through his niche blogs, multiple ebooks, and investments, which now earn him a residual income. On the way to financial freedom, he has been able to increase his revenues and thereby invest significantly more money.

Now he is financially free at mid-30s and can travel the world with his family.

Another good example is Chris. He has written quite a few books in recent years and can now lead a fairly free life by being a writer. In addition, he can earn much more money with his books than it would ever be possible in a normal salaried job.

You will be able to achieve financial freedom in a few years too, by following this path.

Or take David as another example. 15 years ago, he was still a drug addict without any prospects. Today he is financially free at the age of 33, lives with his family in Costa Rica and lives the life, which most people only dream of.

How did he do that? By self-employment he secured such a fortune?


I have already shown you in the previous part of the article, why it does not work as an employee.

He has built several online businesses, coached people and developed many online digital products. As an entrepreneur, he has achieved millions in sales, thereby achieving financial freedom.

I could go on and tell more similar stories. But the most important thing is that these are real people and I did not just make up all these stories.

One thing should be clear from the many examples:

By far the most important lever for financial freedom is passive income.

You can spend weeks, months and years optimizing your return from 6 to 8%. However, if you save only $200 a month because of your living conditions and your income and have invested only $10,000, that’s not very effective.

It would be more effective to increase the passive income by $200 and then invest this money.

This speeds up your financial freedom significantly more than improving your ROI.

Or it does not take several weeks to optimize spending by a few dollars a month. It would be much more effective to seek ways to make more money by opening more passive income sources.

Semi-financial freedom

You probably know already that I am working on a book which will be published in a few months. The advantage of such a product is that after the release and the initial marketing effort, you really do not have to do anything anymore and still receive money from the sales.

So the classic form of passive income.

The big advantage of such products is that you can build a passive income much faster than through investments. Even if the book is not a bestseller and only brings $100 in passive income per month, it’s already a tremendous step forward. You can even calculate how much money you have to invest in order to achieve a passive income of $100 per month.

Assuming with a 4% return on investment you need already $30,000 invested money. Most employees will need at least 3-4 years to save such an amount.

And the example with my book is still relatively small and manageable. You can also have some luck and land a bestseller, bring more books on the market or develop completely different products.

After one to two years, $500 in passive income per month is quite an option.

And now it’s getting really exciting. On invested money you would need $150,000 to make the same amount as the passive income. That’s pretty much the sum that many workers can manage to save after a decade in the best case.

So what’s the better way? Save all the money and invest it on the stock exchange, or rather put the focus on increasing revenue?

In the above part of my article, I explained why you, as an employee and civil servant, can not achieve financial freedom and why you must massively increase your income on the road to financial freedom.

Today I would like to present my concrete plan, what I draw from these findings for myself and what I will do in the future.

Priority #1: Increase Income

I conclude for myself that the most important thing is to increase one’s income. So far I had thought (also because of the tips from the financial blogs) that I should focus mainly on how I can save money.

How can I save $30 a year in order fees on my investment?
How can I optimize my eating habits to spend a few dollars less?
How can I save a few extra dollars by taking advantage of bargains in the supermarket?

I will not ask such questions in the future anymore.

Of course, I make sure to handle my money properly and not steal everything immediately. So far, however, when saving I often had the feeling that I had to pay attention at all costs to spend as little as possible.

After all, every dollar saved would bring me closer to my Financial Freedom, and every money spent would run counter to my goals.

Saving $50 on buying a laptop by driving to all the shops in my area and spending dozens of hours doing research?

I’m now convinced that my time can be invested much more meaningfully than focusing on saving every possible dime.

What’s $100 a month more in spending worth, if I can generate $1,000 more in income?

Medium-term goal = Full-time self-employment

Another conclusion from the first point and what I have learned so far is that in the medium term I want to switch from part-time freelancer to full-time self-employment. In the meantime, I am 100% convinced that you, as an ambitious employee or civil servant, will always be thwarted.

In the exchange of motivated employees, I constantly hear that they are on the spot and not being promoted, either because they have not been in the company for such a long time, because it is not customary to move so fast or the position is currently occupied. Your income as an employee depends to a large extent on the corporate policy and the goodwill of your supervisor.

You pay twice as much as your colleagues. Does that also mean that you earn twice as much?

You can go to your supervisor and ask for a raise of 50% or 100%. He’ll laugh at you because that’s not common in a company. You can be happy if you can enforce a 10% salary increase.

You get paid in a company for what you have negotiated. If the company only pays you more, if you can show a Ph.D. and your own performance does not really matter, then you have bad cards at hand.

As a self-employed person, however, you will be paid for your results and not for your time. So it is quite possible to double your income from one year to the next.

Of course, I am aware that being self-employed also involves many risks and uncertainties. That is the price you have to pay for the possibility of an above average salary.

Of course, you can reduce the risk by first starting off-duty and building it up to a certain point. That would be my plan too.

Mainly building passive income

I had previously given a small example of why a passive income from self-employment is so valuable. Unlike dividend income, you initially only need to invest a certain amount of time and money (for example, to write a book) and then enjoy your residual passive income.

Here is a small overview of what you need in capital for equal dividends:

$500 in passive income corresponds to a value of around $150,000 invested capital.

Now the big question is how to build such a passive income the fastest:

By exchanging time for money 40 hours a week in your job and trying a little something or by focusing on it full-time?

I think the answer should be obvious. If you can concentrate all day on building passive income, you will be many times faster than someone who does just about his main job.

What would it mean for you if you were able to build $1,000 in passive income per month after only a few years of work instead of saving two decades?

Less investment on the financial markets

In recent weeks, I’ve read that most of my money saved should go into stock ETFs. So far, I’ve thought that the only way to achieve financial freedom is through the stock market, and I just have to invest my money diligently for the next few years. Again, my opinion has changed quite a bit.

I am convinced that dividends are by far the most passive compared to other passive sources of income, but that they will take the longest to be built. You need a lot of capital in the stock market to make significant income.

Therefore, in the beginning, I will invest about 80%-90% of my monthly savings rate in my own future and self-employment. Only the small remainder is invested on the financial markets.

With the income of my self-employment, I’ll see if I can invest well in my self-employment and then invest the money in the real estate market. Another advantage of investing in self-employment is that I can deduct them from the tax. The money that I want to invest in the stock market must first of all be taxed.

With, for example, $1,000 in revenue, I could invest the full amount in the self-employment. Depending on the tax rate, only $600 to $800 would be left to be invested into the stock market.

Parts of my self-employment are, for example, this blog and my book which will be available on Amazon soon. However, there is another “business model” to it, which offers significantly better income opportunities and fits well with my topics and my blogging. I’ll talk about it, as soon as I could show for some income and get in the first sales through this business model, when there is really something to report.

So, you see it all remains exciting and you should pay me a regular visit here on my blog until I retire ten years from now!

Could you imagine to become self-employed someday? What is your path to financial freedom and what did you take away from this article?

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