So, this is one of my favorite topics to discuss and there is no one set way to go. Here I outline what I’d probably do and then discuss some other approaches. The general idea is really simple but each step has a lot of nuances:
While I know from myself that it is often tempting to get all information before starting on a new journey there is so much information available that you might never get around to starting. Like I pointed out in my previous post your savings rate is by far the most important metric in determining your time to FIRE. So, in this post I will focus on getting started saving and then my next post will specify what to do with the money you save.
If you read along in my previous posts you’d know that I advocate:
- Spend less than you earn
- Invest the difference
This is very simply put what you need to do. Taking it one step further – in order to maximize progress, you’ll need to:
- Cut spending as much as you can while still enjoying life
- Increase salary as much as you can or get additional sources of income
- Invest in a way that earns you the best possible investment return
Just so that we’re all on the same page I’ll write a small introduction to Financial Independence for those that didn’t encounter the term before.
Financial independence: When you live in a way so that you don’t have to go to work to support your lifestyle.
This can be done in a few ways in Denmark:
- Bonderøvsstyle: Buy and pay off a small property then live off the land. Trade certain commodities for what you need.
- Traditional retirement: Work for 40-50 years and then live on a combination of folkepension (public pension) and your savings.
- Investor: Save a large portion of your income. Invest it and live off the interest.
I started getting interested in personal finance and specifically financial independence about a year ago but have been finding that many principles can be hard to apply in Denmark. Through social media I’ve seen that many others have had the same difficulty in applying FIRE principals in a Danish setting. I sincerely hope that this blog can stir discussion and help others along while I get my own thoughts consolidated into print. So, the triple purpose of this blog is to:
- Serve as a log of my thoughts and hopefully help myself better implement anything I learn.
- Help others understand and implement FIRE principals and personal finance ideas into their own life.
- Discuss ideas and thoughts with likeminded people in Denmark (and elsewhere).