A road trip to financial freedom

Roadmap

My 12 milestones to financial freedom. Bypass numbers 8 and 9 if you’re heading straight for the final destination.

12 Steps to financial freedom

1 Protect your income

I know, insurance is boring, but bear with me. For the first half of your adult life your greatest asset is your ability to earn an income. Get income protection cover.

2 Maximise your income

Up-skill, cross-skill, network, change jobs, hustle. Whatever it takes to become a money magnet.

3 Get rid of ‘bad’ debt

That’s store cards, loan shark loans, credit card debt. Even if you have to moonlight to do it, just ban them from your life for good.

4 Set up an emergency fund

At least three months' expenses in a high interest earning money market account.

5 Become debt-free

As opposed to bad debt, student and home loans are OK for a few years of your life. Still, get rid of these as soon as you can. You’re making your bank rich.

6 Save tax-free

R33 000 into a tax-free account every year. Make that your first savings goal.

7 Use the retirement tax break

Ambitious second savings goal: save 27.5% of your income into tax-efficient retirement products every year.

8 Take a sabbatical

Feel like quitting? Try a few months unpaid leave first. Explore. Expand. Catch some breath for the next long haul.

9 Reduce your working days

Want more time for hobbies and just being? Try working only 4 days a week. March to your own work-rest, do-be-do beat.

10 Sort out your older self

Make sure that when you’re 70 you never ever HAVE to work again. You don't know what your health and energy levels will be like by then.

11 Start a business

Two ways to set up passive income: investments and your own business.

12 Work becomes optional

Listen to this audio clip to find out how much you need to be financially free.

How much do you need to save up? That depends on how much you would need per year. Click the button below that's closest to your annual expenses.

Your magic number:

PS: There's no reason why milestone 11 can't be reached earlier.

My financial freedom tracker

Where am I on this journey? I started investing and (slowly) getting my act together at age 31 and only very recently made it to milestone 10. If I pull the handbrake on all further savings and leave the money that I've already saved to grow at 4% more than inflation until age 70, I should have enough to retire comfortably when I turn 70. But that sounds too far away, so I'm aiming for financial freedom before age 55 instead and have saved up 57% of the amount that I would have needed to stop working at the end of 2019.

Amount I would need to stop working now:

Rx million

% of this saved up in June 2019:

52%

% of this saved up in December 2019:

57%

Amount I would need to stop working now:

Rx million

% saved up December 2019:

57%