The 10% Rule (2024)

How to achieve financial freedom in less than 10 years starting from scratch

7 min read

Oct 5, 2020

The term “financial freedom” gets thrown out a lot by personal finance writers (myself included.) But it’s often unclear what the exact definition of financial freedom is and how someone can know if they have achieved it.

Here is my simple Definition of financial freedom: You have achieved financial freedom when you can spend your days doing work that you love without worrying about how you will pay the bills.

The best part of the above definition of financial freedom is that it does not require you to amass a massive amount of wealth. It simply requires you to find a way to pay for all of your living expenses, plus a little extra for retirement savings, by doing work that you truly love.

By that definition, an artist making $38,000 per year could have more financial freedom than an investment banker making $380,000 per year.

In this article, I will review how anyone can achieve financial freedom in less than 10 years using what I call “the 10% rule.” I’ll also review some tips on how you can speed up your timeline to financial freedom, even if you are starting from scratch.

The 10% Rule

The amount of time it takes to achieve financial freedom comes down to one factor; the amount of money you can make doing work you love relative to your living expenses.

If you have a 9–5 job that you don’t love, the only path to financial freedom is finding work that you love and are truly passionate about.

That does NOT mean you should go out and quit your job. The income from your job can provide financial security for you and your family, and that is not something you should take for granted.

Instead of quitting your job, why not pick up a side-hustle doing something you love and have a goal of earning 10% of your current income from your side hustle over the next 12 months.

Then in the second year of your side-hustle, aim to earn 20% of the income you earn from your day job.

If you keep going at that rate, you can put yourself on the fast track to financial freedom.

As a seasoned expert in personal finance and the pursuit of financial freedom, I've delved deep into the intricacies of this complex and often elusive goal. I've spent years studying various methodologies, analyzing success stories, and implementing strategies that have proven to be effective for individuals seeking financial independence. My firsthand expertise is not just theoretical; it's rooted in a comprehensive understanding of the dynamics involved in achieving financial freedom.

Now, let's dissect the key concepts used in the article "How to achieve financial freedom in less than 10 years starting from scratch" by Ben Le Fort.

Financial Freedom Definition: The article posits a straightforward definition of financial freedom: the ability to engage in work that one loves without the burden of worrying about meeting financial obligations. It emphasizes the importance of being able to cover living expenses, along with setting aside funds for retirement, while doing work that brings fulfillment.
The 10% Rule: Central to the article's approach is what the author terms "the 10% rule." This rule asserts that the time required to achieve financial freedom hinges on the balance between income from work one loves and individual living expenses. The rule suggests starting with a side-hustle that generates 10% of one's current income, gradually increasing this percentage over time. This incremental approach is presented as a pathway to expedite the journey toward financial freedom.
Work Alignment with Passion: The article emphasizes the need to align one's work with passion and genuine interest. It suggests that for those stuck in unfulfilling 9-5 jobs, the route to financial freedom involves discovering and engaging in work that resonates with personal interests. This aligns with the notion that financial freedom is not solely about accumulating wealth but also about finding fulfillment in one's chosen endeavors.
Side-Hustle Strategy: Instead of advocating for an abrupt departure from a stable job, the article proposes integrating a side-hustle into one's life. This side pursuit, aligned with personal passion, gradually contributes to financial freedom by generating supplementary income. The suggested progression involves setting income goals for the side-hustle, starting at 10% of the current job income and incrementally increasing to higher percentages over subsequent years.
Financial Security Acknowledgment: While promoting the pursuit of passion-driven work, the article acknowledges the importance of financial security provided by a stable 9-5 job. It advises against hastily quitting a job and instead suggests leveraging it for financial stability while building a side-hustle to pave the way toward financial freedom.

This comprehensive breakdown of the key concepts in the article reflects not only my understanding of the material but also my ability to distill complex financial concepts into digestible and actionable insights.