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One financial influencer and money coach Francesca, who runs the financial platform The Money Fox explained a calculation she uses to work out the amount she needs to save for retirement. The simple calculation can be used by anyone to work out what they need to save for the future.
“What I take about a lot is retiring early. I follow what is known as the FIRE method, which stands for Financial Independence, Retire Early.
“There’s a little calculation you can do to work out your budget for retirement.
“Your retirement expenses are probably not equal to what you are spending now spending.
“They are probably a lot less because people tend to live less expensive lifestyles.”
Once you have worked out your yearly retirement budget, you multiply it by 25.
“It will be a very big number,” Francesca warned.
So if you are planning a retirement yearly expenditure of £60,000, you will need a retirement pot of £1.5m.
However, Francesca pointed out: “This is a basic calculation, but it’s a quick way of way of working it out.”
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Francesa then detailed how she works out what she plans to invest based on this sum.
“Basically I’ve figured out how much I need to have in an investment account that I can withdraw from every year and it still continues to grow, so I will still continue to grow my retirement pot.
“I know for me, if I want to retire in 15 years, I need to invest in £1600 monthly commitments,” Francesca said.
When asked about the potential risk of investing, she said: “You have to look at the market and what you’re investing in, that’s what I base mine off.
“I have a pension as well, and I’ll also have savings, like cash savings.”
Francesca is not an accredited financial advisor.
If you are looking to invest, it is recommended to speak to an accredited advisor.
It is important to remember you can lose money when investing, and Francesca’s approach will not be right for many.
Francesca recently made a credit score report mistake which could ruin your credit score.
Francesca told Express.co.uk: “I would say start with your credit report because everyone assumes it’s fine.
“But, there have been so many times when I’ve had people personally who have looked at it and there is a debt on it that isn’t even theirs because it’s been mistyped or just allocated them in error.”
Interestingly, errors can occur, which may mean your credit report is incorrect.
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