Everyone would like to live financially independently – especially with regard to old age. However, it is not always easy to determine what capital requirements actually exist. Factors such as inflation or negative interest rates must also be taken into account.
Asset manager Markus Marquardt shows how financial independence can be achieved. It is based on systematic saving and clever investment strategies. Here, the expert reveals exactly how to proceed.
Markus Marquardt founded Marquardt in 2011
Financial independence can mean being able to live on your savings until the end of your life and using them up completely. The better alternative is to use only the capital gains. In this way it is possible to bequeath capital to the following generation. In the first step, the personal definition of financial independence must be found in order to counteract the set goal in the subsequent steps.
The second step is to find out when you will achieve financial independence. This involves figuring out what monthly budget is needed to sustain your lifestyle – inflation must not be ignored here.
Then the income that you still get in financial independence is calculated. This includes, for example, additional income from statutory or private pensions. These returns should be added together and subtracted from the monthly budget, the Magic Number, that one makes available. This gives you an amount that you want to cover monthly from your available capital and the investment income.
The Magic Number is the capital that must be available in order to be able to maintain one’s own standard of living until the end of one’s life – one usually expects the end of one’s life to be 100 years old. There are many calculators on the internet to calculate the number. However, it makes sense to get professional help here: In this way, all eventualities are taken into account.
One thing is certain: in the course of the next few years, the next crisis will hit the financial markets and investments will fall in value. In these market phases it is important to remain calm. Therefore, you have to be clear in advance about how much risk you are willing to take.
A suitable investment strategy for financial independence must meet three conditions: flexibility, crisis security and comprehensibility. “An investment strategy that is ideally suited and fulfills all of these points is a securities portfolio that is as broad as possible and consists of stocks and bonds,” explains the expert.
Once you have found an investment strategy for yourself, you must follow it consistently. It is therefore crucial to remain calm even in times of crisis. Of course, the previous steps must also be carried out correctly for this – a suitable consultant may be able to help with this. Then you can enjoy your life and financial independence in peace.
If you want to create an ETF (Exchange Trade Fund) as a savings plan, you have to open the right securities account. Compare Germany’s online banks and neo-brokers by offer, price and service for your ETF savings plan.