Every €1,000 a Month You Spend Adds €300,000 to Your Freedom Number

Two weeks ago I ran a first session with a new client.

Thirty-eight. Works in tech. Net worth just over €730,000.

Counting the shares and the pension, he is paid about €14,000 a month after tax. He spends about €4,000 of it.

He saves 71% of what he is paid. In roughly 350 of these conversations I have met maybe a handful of people at that level.

He is doing almost everything right.

And he had no idea what he was working towards.

So I asked him.

What number are you actually aiming at?

His answer was two words. “Not yet.”

He had never worked it out. Neither has almost anybody I meet.

So we did it live, on the call. It takes about ten seconds.

You spend €4,000 a month. That is €48,000 a year.

Multiply by 25.

€1.2 million.

That is roughly what you would need invested before it could cover your life without you working.

Roughly, because this is a rule of thumb and not a law of physics. Tax, how you are invested, how long it has to last and anything else already coming in will all move that number. But it is close enough to aim at, and it beats the alternative, which is aiming at nothing.

That is the whole calculation. Your annual spending, times 25.

Then he said something completely reasonable.

He has a second mortgage coming. Another eleven or twelve hundred a month. So we should probably plan on €5,000 rather than €4,000.

Fine. €5,000 a month is €60,000 a year.

Times 25.

€1.5 million.

His finish line had just moved €300,000 further away, in one sentence, and neither of us had touched his investments.

Every €1,000 a month you spend adds €300,000 to the number you need to be free.

And it works in both directions.

Every monthly expense is a machine you have to buy.

If you want €1,000 to land in your account every month for the rest of your life without you working for it, you have to own the machine that produces it. That machine costs €300,000.

Your car finance is a machine. Your mortgage is a machine. The extra €600 a month your lifestyle quietly absorbed after your last promotion is a machine.

Nobody ever shows you the price tag. So people carry the same expense for thirty years without ever seeing what it adds to their number.

Now, before you go looking at your coffee.

A €4 flat white every day is about €120 a month. That is a €36,000 machine. Real, but small, and I am not going to sit here and tell you to give up the one thing that gets you out of the house.

The big machines are the same three for nearly everybody. Housing. Cars. And the spending that expands to fill a pay rise.

Move one of those by €1,000 a month and you take €300,000 off your target.

And this is where high earners get caught.

A €1,000 a month pay rise that you spend does not move you closer to freedom. It moves the finish line €300,000 further away.

That might be worth every cent.

But you should know what you just bought.

The same €1,000 a month, invested instead, can take years off.

Same raise. Same job. Opposite outcome.

It is not about earning more. It is about keeping more.

None of this is an argument for living small. That is where most money advice goes wrong.

My client at €5,000 a month is still saving 64% of what he earns, and I told him to go ahead and take the second mortgage.

The point is not to spend less. The point is to know the price.

You cannot decide whether something is worth €300,000 until somebody tells you it costs €300,000.

There is a reason he could not answer my question, and it is not laziness.

He did not know what he spends. Not really. He tracked the big things and guessed the rest, which is exactly what I did for the first fourteen years of my career, while earning very well and feeling permanently behind.

So I do one thing, and I have done it for six years now. On the last day of every month I write down what came in, what I spent, and what everything I own is worth.

I do not budget. I do not categorise. Both of those are my idea of a nightmare, and neither of them ever told me anything useful.

One number a month. That is it.

When I started I had €191,000 and no idea I had it. I can tell you what moved every single month since.

I do not publish what that number is today. My 1:1 clients have seen it for two years, and members will see it every month, along with the thinking behind each move. The number on its own would teach you nothing anyway. The habit that produced it is the part worth copying, and that one is free.

So, ten seconds. Right now.

Open your banking app. Find what you actually spent last month. Multiply it by 12, then by 25.

That is your number. It is probably the first time you have seen it.

If the number looks frightening, good. At least now you can see it.

You cannot change a number you have never measured.

The tracker I build with every client is free and it does this whole thing on one page. You can grab it here.

If you would like to see whether there is a fit for my 1:1 coaching, you can book a free clarity call here. It is a real conversation, not a pitch. I have told people they did not need me before now, and I will do it again.

Working out your own number is one of the first things I will be helping people do in the new membership I am building. It is my way of scaling what I have done with more than 350 people one to one. If you would like to become a founding member, you can join the waitlist here.

Want this in your inbox every Saturday, before it reaches the blog? Subscribe below.