Financial independence - How to live without financial pressure

Reading time 6 minutes
Financial independence - How to live without financial pressure

You want to be financially independent and enjoy your life without worries? The reality is usually different. Only very few people have enough savings to afford a lavish lifestyle.

The road to financial independence can be rocky and marked by challenges. What does financial independence mean? First, it's about earning your own money so you can support yourself. The amount of money needed for financial independence depends on your life plan, your demands and desires.

If you start saving and investing early, you will increase your financial Achieve goals faster. Wealth accumulation is an important step towards financial independence. A passive income enables the realization of your private and professional projects, independent of benefits from an employer or family.

What is financial independence?

What is financial independence? There is no single definition for the term "financial independence". Being financially independent means different things to different people. Some already feel financially secure with a regular income. Others have ambitious plans and need a lot of capital for this.

The importance of financial independence for you depends on your life plan. If you want to live modestly, a savings plan can be a form of financial independence. If you want to retire at the age of 45 or 50, you need to work more to build up reserves.

Are there differences in financial independence between women and men? In many industries and professions, female employees receive less money than their male colleagues. Nevertheless, women can become financially independent. Especially housewives without their own income should consider their own requirements when planning their finances.

how much money for financial independence

How much money do you need for financial independence?

Financial independence is often associated with a million-dollar fortune, real estate ownership, and other riches. In fact, there are no binding guidelines about the amount of money needed for financial independence.

The most important yardstick is your own values. What do you need to finance your lifestyle? Do you tend to live frugally? Or do you love fast cars, designer clothes and vacation trips to exotic countries?

Are you working on your career and want to study for it? Are you planning to start your own business? For each of these life plans you need sufficient financial resources.

4 percent rule

You can calculate your financial independence. One way of calculating it is the 4 percent rule. According to this formula, you are financially independent when the capital you invest is about 25 times your annual expenses.

Example: You spend 50,000 euros a year. To achieve your goal of financial independence, your assets must amount to at least 1.25 million euros. If you live very frugally, so that 20,000 euros are enough for you to live on, you can achieve financial independence with a balance of 500,000 euros.

How to become financially independent: 4 steps

How to achieve financial independence? You want to enjoy your life financially independent? Take it one step at a time. This will help you achieve your goals faster than risky financial strategies.

These are the four steps to financial independence:

  1. Analyze your financial situation
  2. Define your goals
  3. Start building financial reserves
  4. Make your money work for you

First, start with an inventory. Analyze your current financial situation. Where are there bottlenecks or potential savings? Create a financial plan. Check your expenses.

How much Money you can save monthly? Are there loans you need to pay off? Find ways to build passive sources of income. Set aside a small amount of money each month to save.

Calculate your capital requirements

Define your financial goals. What does financial independence mean to you? How much capital do you need? Calculate your capital needs. Write down what you want to achieve, for example, buying a property, starting a business, financing your studies, securing your retirement.

Set a timeline for your financial goals. Building wealth is a long-term project. Set intermediate goals. This will keep you motivated and allow you to review your success on a regular basis.

Start building reserves as early as possible. Unforeseen events can happen at any time. Plan financial reserves for household repairs, medical bills, the purchase of a car, or other expenses. Only invest money that is not needed for fixed monthly expenses (rent, groceries, gasoline, or the like).

Form a safety reserve

A rule of thumb is that there should always be an amount equal to three months' salary in the account as a security reserve. Building up reserves increases the certainty that you will remain solvent and will not have to take out an expensive loan.

When you reach the 4th step, you have almost reached your financial independence. High returns are achieved through wise investments. Learn about investment opportunities and strategies. Acquire your own financial knowledge.

Use gains from passive income to acquire new assets. Make your money work for you. Are you an entrepreneur, self-employed or Executive? How to achieve success in your business in a healthy, sustainable way, you will learn in the Business Coaching Program.

Release your financial blocks

Entrepreneurial Freedom and financial Independence are closely related. Find and release the blocks within you that prevent you from finding new ways to become financially independent.

Deciding for or against an investment is not always easy. There is a certain risk of making a wrong decision. Compare several Investment strategies with each other. Consider your financial situation and income.

In every asset class, there are lower-risk and higher-risk investment options. How much do you risk for your financial independence? Invest at least part of your money safely. To become financially independent, it is advisable to diversify your portfolio.

9 tips for your financial independence

You want to become financially independent? We have nine tips for you to make your plan a success. Our suggestions will help you on your way to financial independence.

  1. Set yourself Life goals
  2. Create a financial plan
  3. Calculate your financial needs
  4. Learn to get by with little money
  5. Waive loans and consumer debt
  6. Save and invest the savings
  7. Pay attention to your credit score
  8. Take care of your health
  9. Start building wealth as early as possible

Set goals in life and work specifically to achieve them. Create a financial plan. This will give you an overview of your income and expenses. This will help you to plan better. Calculate your financial needs. Your monthly budget should include your financial Needs cover

Refrain from loans as far as possible

Learn to get by with little money. Money that is not spent can be saved to increase your credit. Avoid borrowing as much as possible. Pay attention to your credit score. Your credit score affects the interest rate you receive on loans. This is important if a loan must be taken out to finance a new car or property.

Do you really need the new designer jeans? Does it have to be the umpteenth pair of shoes? Consumer debt is caused by expenses that are not actually necessary for everyday living. When you take out a loan, you pay interest and fees in addition to the loan amount. These additional costs reduce your budget. For financial independence, it is important to avoid unnecessary expenses.

Financial independence: Keep a budget book

There is plenty of savings potential in the household and for leisure activities. Keep a budget book. So you can see where you can save. Invest your savings in short-term and long-term investments. Take care of a pension plan. Pay in regularly so that you are protected in old age.

Take care of your health. The principle of proper care also applies to your Body. If you take good care of your physical health If you take care of yourself, this will also have a positive impact on your financial health.

The earlier you start building wealth, the faster you will reach your goal: financial independence!

How to live a financially independent life

Being financially independent is a great feeling. In addition, a financially independent life provides more Joie de vivre and contributes to the improvement of the quality of life. The advantages of financial independence are:

  • Professional freedom
  • Less work
  • Do what you feel like
  • More Time for family, hobbies and travel
  • Retire earlier

Do you want to make a career? Do you want to have a job that's fun? Financial independence can help you find fulfillment in a job of your own choosing.

If you invest your savings well, you can afford to work less. You have more time for your family and for hobbies. Retiring earlier and really enjoying life is possible when you live a financially independent life!


"Never worry about money again"

Immediately applicable tips for permanently more money in life, so that you can finally afford everything you want - without having to limit yourself!
approx. 60 minutes
Theory & practice



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Reviewed by Dr. med. Stefan Frädrich

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