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How do I become financially independent in a decade?

What sort of capital investment and monthly contribution would be realistic in achieving this goal?

I’m 32 and looking to become financially independent within the next decade. I have only recently diversified my portfolio. My goal is to be able to yield a monthly investment return equal to my gross monthly salary within the next decade. What sort of capital investment and monthly contribution would be realistic in achieving this goal within my desired time frame if my current income is R25 000?

Angelique Visser - Baraza Wealth (Pty) Ltd


During one’s lifetime one reaches many milestones, but achieving financial independence is certainly one of the highlights worth celebrating, as very few people ever achieve it. Having sufficient personal wealth to live without having to work actively for your livelihood is worth deliberating and certainly the best gift you can ever give yourself.

How much do you need?

The first step, and easy part, is to determine what amount you need per month to pay your basic necessities or to live the lifestyle that you choose. This is done by setting a detailed budget listing all expenses that have to be met every month to pay for your chosen lifestyle. Because income tax will normally be payable on the monthly income, you need to calculate what gross amount you will require to provide the required after-tax amount to cover all your monthly expenses. As you specifically mentioned that you want to know how much you will need to substitute your gross monthly salary of R25 000, tax will be disregarded in this calculation.

The next step is to establish what time period you have to accumulate personal wealth and for how long it should last you once you have acquired it. In this instance, you have given yourself ten years to fill your wealth pot, which means you have to create enough wealth during this period to pay you R25 000 per month, in today’s terms, from your 42nd birthday for the rest of your life. This period can either be based on your life expectancy, which is 69 years (the statistic generally still used for males) or, because people tend to live longer, up to an age that you choose. In this calculation 90 years will be used to demonstrate the difference in amounts required.

You may also choose to preserve the capital to leave a legacy for your loved ones or, as most people do, select to deplete the capital by the end of the term. In the calculation below we have worked on the basis that the funds should be depleted.

To keep up with inflation, it will be necessary to ensure that the R25 000 per month increases annually, otherwise you will not be able to meet your monthly expenses in future. In the calculation below, the annual increase is 6%.

The return on your investment and costs will play a significant role over a period. The calculation below was done on the premise that you yield a 9% net investment return.


Until 69 years

Until 90 years

Lump sum


Lump sum to be invested today

R4 364 387

R6 085 679

Lump sum required in ten years

R10 332 090

 R14 407 016

Monthly contribution


Monthly contribution

R41 346

 R57 657

Annual escalation of contribution



Amount required in ten years

R10 332 179

 R14 407 247

Withdraw per month in today’s terms

R25 000

R25 000

How do you achieve it?

Once you have established what amount you will need, the hard work begins. It sometimes requires sacrifices, such as not being able to drive your dream vehicle or own the latest smartphone, but it will certainly yield rewards in the long run.

Decide how you are going to acquire the lump sum or monthly amount required and formulate an investment strategy to reach your goal.

Small tips that will yield big results in the long run:

  • Reduce costs where possible.
  • Pay off high-interest debt as quickly as possible.
  • Find out whether you are on the most cost-effective package at your bank.
  • Review your short-term insurance and health plan, as it may be possible that you are paying too much and could rather channel the extra funds to your investment.
  • Determine what fees you are paying on your investments, as a saving in fees could make a huge difference on your investment in the long run.
  • Cancel loyalty cards where you pay a fee and do not receive any benefits.
  • Consider choosing a cellphone package where you don’t have to pay for an expensive phone with functions that you don’t need.
  • Increase your income.
  • If possible, do extra work to boost your income.
  • Rent out assets.
  • Review your tax position.
  • Some investment vehicles have more tax benefits than others; take advantage of the tax benefits.
  • Be disciplined and stick to your wealth plan.

Do you have any questions you would like answered by registered financial planners?

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