What is your financial lifestyle?

Reached the retirement age, there are only about 5% of French to be financially independent. 95% of French people can not maintain their lifestyle when they retire. However do not rely on the pension system proposed by the state you live so uncomfortable at best. Now a retired affects between 35 and 60% of final salary. In 2050, it will be more than 50% of that amount, according to the most optimistic projections. If in a rich country like France, only 5% of the population are able to become financially independent, it is mainly because of what we choose to do with the money that passes hands. To simplify, there are three styles of financial life:


Borrowers. “Let us use today.” They drive the finest new cars, wear the latest fashions, and live in a big and beautiful house. All this is financed by a huge debt. The house was financed without any input at a variable rate. The car is LOA or funded by the amount of maximum credit, with high interest rates. And all that can be funded with a credit card is funded with a credit card with the lowest monthly payment possible. They build a negative equity: a large debt. Job loss, serious illness or accident and everything is taken over by their creditors. They will think so to be victims of bad luck. All they succeeded so well. In fact, they stole their future their lifestyle today.

Consumers. Consumers do not mind the “credit card”, but the mentality “check month end.” They look at how much they have in their account and spend all they can. For major purchases, they wonder if they can afford to pay the monthly credit. The total cost of credit or number of years to pay is not the test of choice. They work in order to spend. They would like to save, but there are too many things they need: a new car, an iPod, a high definition display, and so many other necessities. Job loss, serious illness or accident also put them in a difficult financial situation. They live on credit until they have a job and when the hour of retirement lifestyle will be dictated by the government.

The Eparges. They do not look how much they earn, they look at the amount of their heritage. They do not earn more than the other two categories, they may earn less. But over time, they will have more money to spend and more years out of work to enjoy it. The first thing they do each month is to invest at least 10% of their pay in their future financial independence. They have debts, but on property that are assessed, as their homes. They have taken out a loan they can afford without any worries, with a significant contribution. They buy cars with at least 2 or 3 years because they know that a car loses its value over the years. They do not hesitate everyday hoping to get rich one day. For placing a portion of their income, they spend most of what they earn. They have a nice house, dress well, take vacations, eat out, … but they know that by investing in the long run, they will have more money than they will need, and one day perhaps even more money than they want.

You’ve probably found some people around you in these descriptions. The most important thing is to know which category you fit. Your behavior yesterday does not dictate what you will do today or tomorrow. You can change category. The purpose of this blog is to help you every day to be in the third category, because it is an investment over time.

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