A year ago, Sonia wakes up, as she does every morning, and the prospect of a new day at work weighs her down. “It wasn’t the first time I got up without wanting to go to work, I was fed up. And yet, I do a job that I like, in marketing, with a great team. But I wanted enjoy my life,” she tells us.
The idea, at first, came to her as a joke: she wanted to retire in 20 years. “I was 26, and I said to myself: at 47, I will no longer work”.
Two days later, she comes across an online testimonial. “In a group on money, a man was talking about Freedom 45, a book by Pierre-Yves McSween, which explains how to achieve financial freedom at 45. It really resonated with me, compared to the reflection I had had a few days earlier”.
Sonia ends up buying the book, and devours it. The book details the “VEI” plan for Value, Savings and Investment, the three steps to follow to retire earlier.
On the “value” side, he recommends investing in yourself, to become an ideal candidate, by multiplying training in areas that are recruiting. The “savings” part teaches you to put aside “at least 15% of your salary”, explains Sonia. “You have to be able to get higher and higher salaries, while not increasing your expenses in order to be able to save massively, and have a higher and higher percentage of savings,” she summarizes. .
Finally, on investment, the system encourages you to find the best investments to grow your savings, rather than letting them sleep on accounts that do not bring in anything.
“Since the start of the pandemic, I have been looking at my finances, and I have made an excel document, which I have since improved, and which allows me to track all my expenses, to establish a budget, and to be able to save a lot right away, because I’m also lucky to have a good salary at the moment. So, I was already in an approach where I wanted to maximize my finances and put the most aside”, explains Sonia, who was enthusiastic about this system at the time.
Because the young woman has not always known security. She even rather crossed some galleys. “At 19, I took out a student loan of 32,000 euros to come to Canada, which I spent in a year and a half, without managing my expenses. So from the second year of study, I had to start working a lot”, confides the young woman. At the time, she earned 800 dollars a month (585 euros), barely enough to cover her expenses. “It was quite difficult for two years.”
After three years, she must start repaying her loan, at the rate of 900 Canadian dollars (650 euros) per month. “Between that, the rent and the utilities, I didn’t have much left at the end of the month. If I hadn’t had a credit card, I would never have made it,” breathes Sonia.
At the time, she put her dreams of travel and an apartment aside. “This financial constraint makes me, even today, feel as if I had taken a certain delay in building my heritage”.
A few months ago, Sonia finally repaid her loan in full. “From then on, I wanted to never make the same mistakes again. And above all, I felt a form of freedom: finally, I was no longer obliged to keep a full-time job.” However, Sonia knows that she will find it difficult, for the moment, without work. “But what is certain is that I want to retire earlier, to take my destiny into my own hands”.
For Sonia, retirement before age 50 has many advantages. “It is above all financial independence that interests me. That doesn’t mean I won’t work anymore, but that I won’t need to work anymore. For that, you have to acquire enough wealth, so that my interest becomes my income.”
For the time being, the young woman does not yet know how much the “pension” that she will pay herself beyond the age of 45, 50 will amount to. But she is confident, and full of motivation.
Because stopping working so early is above all an opportunity for her to “enjoy her life, while we are still in great shape, and not to wait until 65 to make plans, that all your life, you tell yourself that you will do in retirement, because God knows what state we will be in at that time…” explains the young woman.
Second advantage, not insignificant for Sonia: not depending on institutions. “It is reassuring, and even necessary, because when we see the direction the system is taking, we can expect increasingly meager pensions. And especially when you see the reform projects, like that of Macron who wants to push back the age to 65… I want to be able to say to myself “I can leave when I want, no matter what the State says, I don’t need him”.
On the other hand, such a system obviously includes some sacrifices. For Sonia, it is not suitable for careerists, for example. “If you want to go far in your career, climb the ladder, it’s difficult when you stop working early”. It makes the difference between those for whom “working is their whole life” and others, for whom their job is above all a “livelihood”.
“And then, you have to have a lot of projects in mind, she advises, so as not to be bored once retirement comes.”
The vagaries of life can also change the situation, according to the young woman. “We can have health problems, or material hazards, which means that we will have to liquidate part of our savings, and that can ruin the plan.”
To stop working at 45, “50 years maximum”, specifies Sonia, she has planned everything. It is inspired by the VEI method, but also by the FIRE movement, born in the United States, which consists of setting aside 70% of one’s salary.
“Since the end of 2012, that is to say, since I repaid my loan, I have given myself objectives for the development of the net value of my assets, because when you are young, we our savings rate needs to go crescendo”. She has set monthly and annual goals, and absolutely tracks every expense, every penny saved, in a “sacred” excel spreadsheet.
“I’m not the most thrifty, I like to spend on food, shopping, but since everything is fixed, I know when I have to slow down and how I can balance all that at the end of the month”, explains Sonia, for whom this system still represents “a lot of organization”.
All in all, she has about ten savings accounts, and five investment savings accounts (cryptocurrency, trading, real estate, etc.).
These different savings accounts each have a specific purpose: one for fixed expenses, a travel account, a “family and friends” account, an account for emergencies, an account to finance the sabbatical year that she plans to afford soon. , an account for paying taxes, and an account for leisure, shopping, etc.
“As soon as I have my pay, I know how much I will put in each of the accounts,” she explains, adding that every month, 40 to 45% of her salary is thus invested in the long term.
“Unfortunately, this system is not accessible to everyone. You have to have a certain salary to be able to save that much. I’m lucky to be able to do that”.
To save enough, you also have to work a lot, to accumulate a maximum of capital to reinvest later. “In addition to my employment, I also work as a freelancer. So yes, there are sacrifices to be made from time to time, because eventually we will spend less time with friends, with family, we will have to skip a trip or an outing…”.
You also have to be determined. “I tell myself that the me of today sets aside for the me of the future. I’m not ready for all the sacrifices, but almost. I reduce outings, I only make one trip a year, I limit transport… But I know that the outcome is worth it, because in 20 times, when all my friends will still be toiling away at the task, I could rest and make great plans.”
By stopping work so “early”, Sonia is not afraid of being bored, even less that she misses her work. “I definitely won’t miss the routine and structure of the working world,” says the young woman. “On the other hand, I could very well work as a volunteer for NGOs, go on humanitarian trips, make myself useful and do something in line with my values”.
She did a lot of research online to establish her strategy. “There are a lot of social media accounts, podcasts and sites on the internet that popularize budgeting and financial systems. For example, The Financial Samurai, Plan Cash, ElleInvestit…”
For Sonia, it is imperative to get the information yourself. “School programs and institutions absolutely do not teach us to save and invest early, when it is very important,” breathes the young woman. Women, in particular, are much less equipped to face the world of money and create wealth. “When I realized that, it shocked me. I then created a self-help and financial literature group with friends, to whom I give some advice.”
In any case, surrounding ourselves with people who push us, who understand us, and can help us, “it also helps a lot”, concludes Sonia.