How to become a former worker in France ?

Hello everyone, here is another article a bit different from what I'm used to write. As some of you might know it, I live in France and one of my main goal is to be able to live a life without having any need to work. That means having assets that earn money for me. I think it is rather a hot topic as there are demonstrations against the pension reform in France.

In order to be more or less realistic and to make you believe you can leave your job as fast as possible I'll explain different scenarios and income levels, but first, you have to know that the "classic pattern" to become a former worker in France is currently 62 years old and will be 64 years old by the end of the year, and the average retirement pension is 1 400 € per month.

You want to reach 1 400 € per month before 40 years old

You want to get rid of your work and that's the only thing important in your life. You're not spending a lot of money in futile things, you probably don't have any children either so 1 400 € might be enough to stop working. So how will you reach this goal ?

• By investing in real estate

Let's be optimistic and think that your real estate investment will give you a 7% APY profitability (after all the taxes). So you want to earn 16 800 € per year at 7% APY which is a 240 000 € total investment. The advantage of the real estate investment is that you can use the bank leverage effect so you don't have to invest 240 000 € from your own pocket. According to my experience, I think that with a 2 000 € / month salary, you can achieve this goal between 5 and 10 years.

• By investing in dividend stocks

Once again let's start from this premise : the dividend given corresponds to a 8% profitability. Here, you "only" need to reach a 210 000 € total investment. However, you can not use the bank leverage effect as in the real estate investment. But you can and should reinvest your dividends into other stocks. That's what we call the compounding effect.

In order to reach this achievement, we'll start from this premise : you invest 20 000 € in stocks, then you invest 200 € each month in stocks. I started from this premise as I think that if you win 2 000 € per month from your salary you can easily invest this amount of money each month. With this investment, you get to reach your goal after 20 years. This is longer but it is less time consuming than investing in real estate assets. Also, you can still choose to continue investing and the compounding effect will make it even better.

You want to reach 3 000 € per month before 40 years old

So here it is obviously the next step, maybe you're also living alone but you want to be able to travel, to go to restaurants, to drink some glasses with friends, etc ... or maybe you have a family and you need at least that much money to be comfortable.

• By investing in real estate

We keep the same datas than in the previous section but with the aim of earning 36 000 € per year. The main difference is that you may have to win more than a medium salary, and that you will probably take more time than five years to reach that. According to my experience, this will need between 10 and 20 years. But if you're really really good at investing in real estate, you might need less time to reach that goal, and you should continue investing in it in order to earn more and more money.

• By investing in dividend stocks

With a 20 000 € initial investment and 200 € invested per month, you need 30 years to reach that goal. However, let's suppose that you can invest 50 000 € at the beginning and 400 € per month. Now you will "only" need 20 years to reach 36 000 € per year.

You want to reach 10 000 € per month

You want to live like you want, travel, buy anything you need (or maybe don't need) and make great presents to your family. You are for sure free to work or to not work. How will you reach this goal ?

• By investing in real estate

As previously, we keep the same datas but with the aim of achieving 120 000 € of revenue per year. You will have to make great deals, and take very good opportunities. Probably you'll have to buy apartments or buildings by creating real estate companies to avoid too much taxes and you might have to associate with somebody. After taking all this into account, even if you're good, I think you will have to wait at least 20 years to reach that level of revenue, and maybe your whole life if you're not that good in this sector.

• By investing in dividend stocks

With a 20 000 € initial investment and 200 € invested per month, you need 46 years to reach that goal. However, let's suppose that you can invest 50 000 € at the beginning and 400 € per month. Now you will "only" need 35 years to reach 36 000 € per year. So I think that you will not replace your retirement pension with dividend stocks if you don't invest a lot in it.

What can we conclude about this ?

If I had to make a conclusion about this, it is that the investment is a very long process, and that we can not become rich easily and fast by investing in real estate or dividend stocks. Also, I think you should diversify your investment in both those sectors, and also why not investing in cryptocurrencies which are way more volatile and risky.

If you enjoyed reading please give a tip, follow me and put a like, thank you !