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The Key To Wealth And Financial Independence

How I achieve a +80% Savings Rate and is it the Key to Financial Independence?

Last Updated on September 28, 2021 by Mr. FightToFIRE

In an earlier post, I showed how I calculate my savings rate and how you can find out your own.
I explained the savings rate and used myself as an example for September.
In this post, I’m going into more detail on how I got such a high ratio for September and the two months before.

To reach a savings rate as high as 85.69% for the month, I had two things to keep me ahead of the game:

  1. Postpone/spread out expenses
  2. A job that offers ample career opportunities

While I say two, only point 1 is something you can repeat and be consistent in. We not only decide our career path by our future paycheck, but we also choose it by how we go through life and how we enjoy spending our (free) time. You can’t keep doing a shitty job with a good pay. you’ll only become more exhausted over time and looking the worse for wear.

You can immediately skip to my personal projections if you don’t really care about how I’m achieving such a high SR.

Women sitting behind laptop, thinking.
Be conscious about your expenses: is the thing I'm about to purchase important right now or can it wait?

Postpone expenses

It’s a simple idea: I postpone certain expenses to buy them cheaper later.
I do my best not to buy something on impulse I will regret afterward. Instead, I wait longer and ponder long and hard about whether I really need to have it or if it’s something I want to have.
Most of the time I can wait to buy luxury goods such as:

  • Video games
  • A new computer
  • A nice dress shirt or pants

To clarify my statement, let’s take a new computer for instance:
My current one is +6 years and certain things are going slower, especially given I use a 4K screen that requires more GPU power to play video games.
Because of this, I have played with the idea to purchase a new PC from scratch. This would make playing newer games on their highest settings possible. However, I rarely play video games anymore and newer hardware would bring me limited merit.
On top of that, I realize that RAM, CPU, and GPU are more expensive in 2018 than in 2016/2017. If I were to buy a computer now, I would pay a premium for these components.
Why buy now what I don’t really need, i.e., a new computer, when I can wait for a tad longer and get it at a discount later?

It easier waiting to buy electronics because it depreciates fast. For other items, it seems less obvious how you can save by waiting.

Clothes for example. A quality white dress shirt is always useful. Shops know this so the price of a white shirt almost never dips lower.
How can I save then? I wait for our two yearly sales periods in Belgium.
I just buy my fancy white dress shirt during those sales. Every shirt gets some sort of discount then anyway.

If you break the postponing of expenses down to its most basic principle, you get a comparison between something you want to have vs something you need to have.

Want vs. Need

The difference between a want and a need is simple on the surface:

  • Need: An object you have to have
  • Want: An object you would like to have

That is until you come across that nice new T-shirt or delicious Ben&Jerry’s Chocolate Chip Cookie Dough.

In reality, you only need four things to survive:

  • A roof over your head
  • Food and water to maintain your health
  • Basic hygiene and health care products
  • Clothing (the minimum to remain comfortable and appropriately dressed)

What goes further, is a want: a bigger house, ice cream, branded (T-)shirts, etc.

Just remember: Take your time to reflect on what you plan to get. You will find that you don’t always need the latest T-shirt or another cup of your favorite ice cream.

Lots of Haribo Happy Cola
Who cares about Savings Rate when you can have delicious "mini colaatjes"?

Monitor, adjust, repeat

I apply this basic idea of wants vs. needs day in day out.
Whether I’m planning to get something for my race bike, or it’s a new dress shirt, I take a few moments, sometimes not more than 5 min., to consider the alternative to buying: not buying. Waiting.

By doing this for simple (clothing) and more important decisions such as buying a house I improve my SR by leaps and bounds.

Do I sometimes say: “screw it!” and just go out and get what I want? Of course! There is nothing wrong with a splurge. We have to enjoy life after all.

I get enjoyment out of seeing a fun movie at the theater every other weekend and what is going to the cinema without some snacks, right?
I go to the movies to have a good time, not worry about money. At that moment I don’t care I don’t need that Snickers or bag of “Colaakes“. I get them because for me those unhealthy snacks are part of the entertainment.

Get a job with enough career opportunities

I already mentioned that the first one is much easier applied than this one. The kind of jobs that meet the requirement of ample career opportunities are likely to be in STEM (Science, Technology, Engineering, and Math). This is not everyone’s cup of tea though.

I work in IT and due to a high demand and low supply of IT graduates, there are a multitude of opportunities available to me.
Even at my current employer, I can get enough new challenges to enjoy my job.


A career in a STEM field is an obvious choice, but also one that is difficult to change, depending on your personal situation.
It might be impossible for you to change jobs (or function) because of various reasons. Your degree is in a field that just doesn’t offer many chances to improve yourself financially.
Maybe you do have a solid degree with ample chances but you enjoy what you do and do see any reason to change besides financially.

Enjoy what you do and make sure you get a decent financial reward for it that helps you achieve your goals.

STEM: Science, Technology, Engineering, and Math
STEM: Science, Technology, Engineering, and Math. A career in one of these disciplines is a sure fire way to get excellent job opportunities coming your way.

Putting one and two together

In the end, it’s simple: by having point two and keeping point one in mind every month I’m able to reach a high savings rate.

I don’t always stick to the first point but I try. I don’t lose sight of my end goal: reaching FIRE and with that in mind I keep trying.

Looking ahead: will a lowered SR still get me to FIRE fast?

While these points have a big impact on a high SR, there is something that helps even more: the possibility to live with my parents at no costs.
I don’t have to worry about a rent or mortgage that I need to pay every month nor do I have to hand over anything at home.

Will this situation change in the future? That’s very probable. I don’t foresee to move out any time soon but the future cannot be predicted.
Knowing that things might change, I calculate my estimated FIRE age based on a somewhat arbitrary SR. This rate is calculated based on my current income and expenses but I include a rent/mortgage of about 700 EUR.

Some quick assumptions based on current income and expenses plus rent/mortgage:

  • September income of ~2600 EUR net income/month x 12 = 31,200 EUR annual net income. In practice it’s actually more like 13.95 due to some extra-legal benefits I get but it’s more complex due to my cafeteria plan, so I keep it simple using times 12.
  • September expenses + guestimated rent/mortgage for a total of ~1092 EUR expenses/month x 12 = 13,104 EUR annual net expenses.
  • Gives an SR of 58%

Going from high 85.69% to a more “normal”, though still very good, 58% is a big change.
It seems a bit more realistic albeit more on the pessimistic side given I assume my income will never change.
Using the above numbers I can quickly get a nice overview of my possible FIRE age using the simple online tool of

inputs needed for calculation of SR and FIRE
Using the following values I can find out my FIRE age in a quick and easy manner.

If I fill in the numbers and assume an annual Return On Investment (ROI) of 6% with the golden rule of 4% withdrawal rate (see inset), I can find my time till early retirement.
This will vary due to the taxes in Belgium (or whichever country I will reside in) at the time of my FIRE. The problem is, that it’s very difficult to foresee what kind of taxes will exists and at which level in x years from now, so I keep it at an average 4%.

Graph showing Time till early retirement.

This gives me an estimation of 12.6 years till FIRE. This means that I should be able to realistically retire early at age 40 with a net worth of about € 345,000. I’d give myself some extra buffer and say a net worth of € 400,000 is my aim.

Things like an increase in income and an improved ROI are not taken into account so it’s possible it’s earlier.
I would thus put my realistic FIRE age somewhere between 35 and 40.

With my savings rate cleared and my methods clarified, I’m all set to make it happen in the next 8 – 12 years.

Will there be setbacks or unforeseen expenses? Most likely. I hope that I’m still writing so that you can follow it from the front row.

4% withdrawal rate?

The 4% withdrawal rate is a percentage that you will find regularly on FIRE-related articles.
The 4 percent rule is a rule of thumb used to determine how much a retiree should withdraw from a retirement account each year.
It was created using historical data on stock and bond returns over the 50-year period from 1926 to 1976.
It was financial adviser William P. Bengen that set it by conducting an exhaustive study in 1994 on the earlier mentioned historical returns.
Bengen concluded that even during untenable markets, no historical case existed in which a 4 percent annual withdrawal exhausted a portfolio in less than 33 years.
While the 4% rule might be hard to grasp in terms of real-life expenses. It often gets translated into 25 times your yearly expenses. Why? It’s simple math really.
Say Mark has 60,000 EUR annual expenses. If he doesn’t want to run out of money, he would need 60,000 x 25 = 1,500,000 EUR. You get the same result if you use the “4% rule”.  If you take 4% of 1,500,000 EUR, you get… 60,000 EUR.

A penny for your thoughts?

Do you agree with how I view things or am I seeing things too simple and is there another reason why I am in the 80 percent Savings Rate?
Please leave a comment and let’s start a discussion.

I'm a developer for a major financial institution in Belgium that is present in over 40 countries. I have over 8 years of working experience in the development of customer applications focussing on all aspects of banking. This helped me gain a deep understanding of the inner workings of a commercial bank. All of this experience in both banking and life culminates in this blog about personal finance and my fight towards FIRE.

1. My remarkable budgeting ways to reach the illusive Financial Independence
2. The Most Important FIRE Ratio: FIRE Savings Rate
3. How I achieve a +80% Savings Rate and is it the Key to Financial Independence?
4. Cafeteria plan: improving wants & needs for your convencience
5. Frugal with a twist
6. My Belgian cafeteria plan: like a kid in a candy store
7. My monthly Savings Rate report: October 2019
8. My monthly Savings Rate report: November 2019
9. My monthly Savings Rate report: December 2019
10. My monthly Savings Rate report: January 2020
11. My monthly Savings Rate report: February 2020
12. My monthly Savings Rate report: March 2020
13. My monthly Savings Rate report: April 2020
14. YNAB Vs nYNAB Vs Excel: A Helpful Budgeting Tool reviewed
15. My monthly Savings Rate report: May 2020
16. My monthly Savings Rate report: June 2020
17. My monthly Savings Rate report: July 2020
18. My monthly Savings Rate report: August 2020
19. My monthly Savings Rate report: September 2020
20. My monthly Savings Rate report: October 2020
21. My monthly Savings Rate report: November 2020
22. My monthly Savings Rate report: December 2020
23. My monthly Savings Rate report: January 2021
24. My monthly Savings Rate report: February 2021
25. My monthly Savings Rate report: March 2021
26. My monthly Savings Rate report: April 2021
27. My monthly Savings Rate report: May 2021
28. My monthly Savings Rate report: June 2021
29. My monthly Savings Rate report: July 2021
30. My monthly Savings Rate report: August 2021
31. My monthly Savings Rate report: September 2021
32. My monthly Savings Rate report: October 2021
33. My monthly Savings Rate report: November 2021
34. My monthly Savings Rate report: December 2021
35. My monthly Savings Rate report: January 2022
36. My monthly Savings Rate report: February 2022
37. My monthly Savings Rate report: March 2022
38. My monthly Savings Rate report: April 2022
39. My monthly Savings Rate report: May 2022
40. My monthly Savings Rate report: June 2022
41. My monthly Savings Rate report: July 2022
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Interesting calculation, but you have forgotten inflation and capital gain/dividend taxes…how does it turn out with 2% inflation and say 25% CG taxation?


Hi FTF –

interesting read and some good tools you have cobbled together here, I like it. just wondering how you actually see the retirement piece panning out on the back of let’s say the 400k of net worth early 40’s. you feel that’s enough to get rest of lifespan adequately funded let’s say up to 80? or you throw some sort of income in the mix between 40-65 (after which you’ll get some small pension from our lovely government)

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