How to become financially independent

If you would like to be free to work at any project you want regardless of the pay or be able to do things that are hard or impossible with most jobs (like going on a 3 months trip) before you become 60 or 65 I suggest taking a look at this story, for initial motivation (although there are more colorful ones on that blog), and then at the simple math behind how to do it which I summarize here:

Your savings rate depend on 2 things:

  • How much you take home each year
  • How much you can live on

Then the higher your savings rate the sooner you can retire. This assumes that you invest your savings, which [If you would like to be free to work at any project you want regardless of the pay or be able to do things that are hard or impossible with most jobs (like going on a 3 months trip) before you become 60 or 65 I suggest taking a look at this story, for initial motivation (although there are more colorful ones on that blog), and then at the simple math behind how to do it which I summarize here:

Your savings rate depend on 2 things:

  • How much you take home each year
  • How much you can live on

Then the higher your savings rate the sooner you can retire. This assumes that you invest your savings, which]3 without having to become a full-time investor.

If your savings rate is close to 0% you won’t be able to stop working until retirement age. If you savings rate is something like 75% you could retire in 7 years. Like my grandmother used to say all the time: “No es más rico quien más tiene sino quien menos necesita” (“You are not richer the more you have but the less you need”).

For me it’s not about stopping working, I love building things with other people. For me it’s about the freedom and about the efficiency of producing a lot of value for others with little cost: the fewer resources I consume the longer we will be able to remain on Earth.

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