Early Retirement · Financial Independence

Eight advantages to living in the EU when starting your Roadtrip to Financial Independence

With high tax rates some of us might be frustrated that its much more difficult to reach Financial Independence compared to the rest of the world. However living in the EU has a few major advantages that will actually make it easier to reach Financial Independence.

I’ve written down the top 8 reasons that I personally think make the EU a great fallouts base for people who are starting on their Roadtrip to Financial Independence.

Healthcare would be immensely expensive if it was not free. A good example of this is the US where people are really going bankrupt without a good health insurance. Sometimes from a young age already! In 25 out of 27 EU countries healthcare is free. At least as good as free. If you can’t afford a doctor in Belgium for example they will just charge you the symbolic 1 EUR.

You can always get additional insurances, this will give you slightly better hospital care, and access to private bedrooms for example, however even these extra insurances will not drive the price up by much.

In all EU countries there is a state pension. Of course there is major differences in sizes between countries. Germany is known to have a generous pension, while UK (ok not EU anymore) is known to have a really low pension. The downside is of course that you have a fixed retirement age. This is the lowest in Slovakia at 62 and almost a dozen have the highest (67) in the EU.

Now 62-67 is the retirement age. But nobody is forcing you to work until that age. BUT you do have the added advantage that even if you stop 20 years earlier you will have some sort of state retirement that will give you a small extra boost at 62-67.

The only downside is that you do need to pay for that pension. You pay taxes, which is actually not so convenient as most countries are not so good at investing your money. So you have a much lower pension then if you would just put invest taxes into a broad index fund yourself.

A big advantage of living in the EU is the open borders. Firstly you can use it to your advantage by moving to a Western European country to earn a high wage. Switzerland for example.

Secondly it also means you are able to shop around when you reach Financial Independence. You could make your Financial Independence number in a rich country and then relocate to a country with lower taxes and lower real estate prices. I believe Portugal is the perfect country to relocate to once you reach Financial Independence. Find out why I believe that here, but a country like Bulgaria with only 5% capital gains tax and cheap living costs is good to.

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You can use #3 open borders to shop around for free education. Now you have no excuse anymore not to get a degree. Not that a degree is the only way to a high wage but statistically it is the most sure way to get a high wage.

10 countries in the EU give 100% free education to other EU countries, and that’s smart. If 50% of the EU citizens that study there decide to stay, this cost them absolutely nothing. If a higher number decides to stay they make a profit.

Luxembourg is the only country with free transportation in the EU right now, but almost all countries subsidize their public transport. Belgium for example subsidizes it for 80%. Germany is considering to make all public transport free.

Why? Its a great way to lower the amount of cars and combat climate change. I suspect we will see more countries with free public transport in the future in the EU, as it gets harder and harder to lower their carbon print.

This has an obvious advantage for you, cars tend to be expensive so if there is a way for you to move around for free then this will make it much easier for you while trying to reach Financial Independence but also once you have reached Financial Independence.

10/20 countries that are the happiest worldwide are European Union countries. 13/20 countries are in Europe. The path to Financial Independence can be long. It can take 10-30 years, and you don’t want every year to feel like forever. You want to live while you work, and the EU allows this. Socialism is strong in Europe and that translates to a great work-life balance. Plenty of paid vacation, parental leave, free weekends,… all those contribute to a great work / life balance that will make it much easier and pleasant as you walk your path to Financial Independence.

While 96% Visa free is just for the top EU countries, all the EU countries are actually very similar / high. Usually people who want to reach Financial Independence love to travel, and who doesn’t hate having to request a Visa first? Its so much easier if you don’t need to worry about these things and can cross any border you like by bus without thinking to much.

If you want to do a world trip once you reach Financial Independence an EU passport will make things a lot easier. That is of course on top of the 27 EU countries that allow you extremely easy travel with cheap flights.

Its not unlikely that you only start to read about Financial Independence in your late twenties or perhaps thirties. In the US for example 43% of the Americans have credit card debts. This bad debt is a huge setback if you want to start your Roadtrip to Financial Independence. EU countries on the other hand have usually 2-16% credit card debt. Yup Germany only has 2% credit card debt.

Its just much harder to get credit card debt in EU. You have bigger requirements to request a credit card and you are supposed to pay your credit card bill the next month. This makes sure that even those of us who only become Financially educated later in their life, at least don’t have a major heavyweight dragging them down when they start their journey.

I hope you enjoyed to read this, and for those of us living in the EU I hope I convinced some people that Europe is a great fallout base for Financial Independence.

If you are just starting your journey then also check five steps to take in 2021 when starting your FIRE journey!

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5 thoughts on “Eight advantages to living in the EU when starting your Roadtrip to Financial Independence

  1. Great summary on why it isn’t so bad to try and make FIRE work in Europe. It shows that you can make it work without living in the US or UAE.

    Liked by 1 person

  2. Are you sure about the free healtcare? For example in Belgium, as long as you work your employer pays social security for you and you are covered by that. But if you stop working without back up (pension, being fired so you have the right for the unemployment benefits, sick,…), you’re only covered for 6 months anymore. Afterwards you will have ask for a special status, and you will have to pay up to 3000 euro depending on the income you generate (rent income counts as well). And there is also the risk that in the future these rules will become even more strict…

    Liked by 2 people

  3. Hey Bart,

    Thanks for your comment.

    Ok, not fully free but as good as. For Social protection (including healthcare), you pay 54 EUR per year. If you are unemployed you will pay about half of this.
    I do live in Flanders, I might have wrongly assumed that its the same for Brussels and Wallonia, but since these are known to be more left then Flanders this would surprise me.
    Source: https://www.vlaamsesocialebescherming.be/je-woont-in-vlaanderen

    Can you please share your sources?

    Liked by 1 person

    1. The link you sent is for extra insurance, so it assumes you that you are already protected by social security.

      If you just stop working (so no social payments are done anymore for you) and you have no partner (if you have a partner who works you can use her/his protection), you have to become “Personen ingeschreven in het Rijksregister v.d. natuurlijke personen”. You see it in the link below what the consequences are

      https://www.riziv.fgov.be/nl/themas/kost-terugbetaling/verzekerbaarheid/Paginas/persoonlijke-bijdragen.aspx

      If you have a portfolio of stocks and you just sell from time to time, I think that these capital gains are not counted, so indeed it could be that you don’t need to pay anything. However:
      1) saying that social security is free, is not correct it needs to be paid for one way or another
      2) regulation can change. especially with the leftish governments that Belgium has, I wouldn’t be surprised if in the future you will have to pay not based on income, but based on your capital.

      Liked by 1 person

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