achieving financial freedom one lazy step at a time

Exit strategy

For some months now I have come to the conclusion that for me financial freedom in Belgium will always entail some work
The reason for this is very simple: taxes and our social system
Due to our social system we have high taxes in Belgium which means you will be building your initial stash by earning money that is taxed at 50%!

Taxbracket   Income                                             Tax level
Schijf 1           € 0 tot €10 860                            25% (yes dear American readers, our taxes start at 25%!)
Schijf 2           € 10 860,01 t/m € 12 470     30%
Schijf 3           € 12 470,01 t/m € 20 780     40%
Schijf 4           € 20 780,01 t/m € 38 080     45%
Schijf 5          above 38 080,01 euro             50% (Yep, they go all the way to 50%! Did I mention the 21% sales tax?)

Dropping out completely will add costs to your retirement (since you no longer qualify for any of the social systems you paid into for many years) AND which will add to the amount you need to save, savings that you will need to get by working and being taxed at 50%!

The setup of our social system is such that you will have very little choice than to stay in it. But staying in the system means you either need to be an employee, independent or unemployed. You, per example need to be any of those three for 30 years to qualify for a pension.
Now I know this might be a bit of a bummer to some of you but it shouldn’t be!

The big benefits of working a little bit

A big plus is the tax free amount one can earn and currently sits at 7.130 euro (a mortgage will add to that, children as well, full table below). An extra is that for those earning less than 26.510 euro a year that tax free amount is pushed up to 7.420 euro!

How long would it take me to earn 7.420 with my current job if no taxes would be applied? Around 2 months and 2 weeks! Getting to the 24.000 euro mark will take a full year. So to get my earnings 3.2 times higher I need to work around 5.2 times longer. The difference between those two numbers is due to taxes.

One child will add 1.510 euro to this tax free amount, two children add 3.880 euro in total and three children 8.700 euro.

Our mortgage adds another 2.280 euro to this tax free amount so actually I could earn a total of 9.700 euro tax free! Because this will different for everybody (mortgage reduction in your taxes has become one of the most complex parts of our taxes in Belgium due to lots and lots of changes in the last few years) i will continue to work with the basic amount of 7.420 euro untaxed since this is the same for everybody.
Earning those 7.420 untaxed Euros has a few very powerful consequences.

First off, using the 4% rule it lowers the stash you need by 185 500 euro! With spending 18.000 euro a year, earning 7.400 euro a year by working, your stash only needs to be 265.000 euro. Add in some cash for the down years: 300.000 euro and you are done! You essentially exchange work taxed at 50% before financial freedom by work taxed at 0% after financial freedom. Due to the tax free nature of that last work, total time worked will be shorter than the scenario in which you keep working until the stash is big enough to quit completely. And you will have more free time when you are younger. A big plus in my book!

Second: you will remain in our social system which is always a good thing (extra security and income in the form of a pension later on, health care is also sorted!)

Third: by still working a bit you keep at the very least some employable skills up to date. A lot of people wonder about having enough stash to call it quits. Working three months a year (I’ll assume those short term jobs will pay less than my current one) eliminates this worry. If unexpected expenses do happen you can always work a bit longer until the expenses are covered.

The exit strategy

But all of this means you need a good exit strategy. Just pulling the plug is not going to do it since you will need to transit into some type of paid work. The problem is finding a job that enables this. I doubt my current employer would like the idea of me still working here but taking unpaid holidays for roughly 9 months, each and every year (i might get away with one year by using the ‘big trip in Asia’ as an excuse).
There do exist small jobs, only a few hours a week that might get you the 7.500 euro a year. But most of these are low paid and then you have to work most weeks of the year. I would like to have it done in the least possible time.

Possible solutions:

-security sector: easy to get a short time job. But since these are temporary contracts you would be unemployed for the remainder of the year. While this is free money some people might have ethical problems with this. At the very least there is a big change that after a while you will be hassled by the government agency to go to work again. Especially since the security sector is always looking for people. The extra work would mean extra money, but that isn’t the idea is it?

– find an employer who only needs people for a short duration but will need them every year. Big plus of this is that you do not need to look for a short time job every year. Personally I was thinking of the event industry as I liked working back stage at festivals when I was a student. The rest of the year you would be unemployed again, creating the same problem as with the security sector.

– find an employer who is ok with you taking 9 months unpaid leave every year. Chances for this happening are low.

-find an employer where you can work half time and add two months of unpaid leave to it. This is probably not going to fly either. Most employers apparently want their employees to work all year round. Even if you find an employer that is ok with it, you would most likely need to work half time during at least 8 months and only have 4 months you do not need to work at all. If I could find something near my house I would be ok with this.

– find a side gig now that you can transform into a ‘job’ after FIRE. The side gig would only need to bring in 7.090 euro. You would need to go the independent route for this, which will have an impact on your pension later. But it would avoid any hassle from the government. The issue remains that I would like to be done with the work in three months (untaxed you would only need to be making 2.400 a month gross) and then not have to work the remainder of the year. But to swing this you would need decent skills in a specific area. And since you would need to do this for the following 20 years, you are going to run into the issue of having to keep your skills up to date to stay relevant in your field.

These examples show that if you try to get the work done in three months or less you will always run into the same issues. Employers, or your own side gig, probably necessitate work the year round. If you do not do this as an employer you will be unemployed for 9 months, which will result in hassle from the government. If you do not do this at your side gig, you probably will not have a lot of side gig left after a few years …

The solution might be found by getting some location independent work (work you can do from a laptop from anywhere in the world). This might be the best route to go. Twelve hours a week of working but with zero commute and the possibility to travel anywhere anytime I want? Sign me up!

I welcome your input because as off now I have not yet an exit strategy in place. That is ok since I just started working at the new job and I will need to work for another 5 years. On the other hand, if I would identify a location independent side gig now, I could start implementing it as soon as next year. Thus reducing the time I need to work by a year AND have a secure exit strategy in place by the time I will be able to quit.


  1. Chris

    Also thinking on a location independent job (the 4 hour workweek is my bible) but to find the correct niche is very hard to get. There is a webshop for almost anything you can think of.

    A remote working job? Well they will hire a cheaper guy for half the money from “the middle of nowhere” instead of you.

    Still thinking on a niche market….

    • finan112_wp

      It is indeed not easy.
      Well, if i do not find anything I could always take a job of a couple of hours a week driving a forklift or something like that ..

  2. ambertreeleaves

    Good thoughts and in line with the description of my ideal life I once wrote.

    I consider going the independent route, Other 4-5 Eeks odd in the summer, some Easter and year end to have 8 weeks off. Why? other kids age 5 and 7 I look at 18 years of school and university to pay. That requires money. And I think I Oils not be happy without a source of challenges and purpose.

    In your case, how about online marketing, seo,… For Dutch soaking markets. Those are hard to outsource to cheap countries due to the language. Or do remote helpdesk support via e-mail.

    • finan112_wp

      SEO was something I was thinking about. Getting some google certificates and see if a small part time job can be found. If nothing else pops up in the next three year this definitely i will look into!

  3. Team CF

    You can debate the ethics of using the system, but I have to admire your creativity in using the system to your advantage!
    Some jobs that might interest you and could potentially be done part time/part of the year:
    – Private chauffeuring (get to drive fancy cars – did this when I was a student)
    – Delivering mail/packages/newspapers (nice work out too)
    – working in seasonal industries such as sales of Christmas sales, or garden supply stores
    – I like the event industry too, works a couple weekends a month, to due outdoor camps in the summer

    Amber and I were considering discussing this topic too during the meet up in June!

    • finan112_wp

      Count me in on the discussion!

  4. Chris

    Another possibility I’m thinking of: buy low priced stuff on flea markets or auctions (in holland we have “de domeinen”) and sell these after repair/refurbishing on Graiglist (marktplaats) or Etsy.

    Did you ever considered (Air)BnB ?

    • finan112_wp

      I think I would rather day trade than have to go hunt flea markets …
      And (air)BnB, well we do have two spare bedrooms but at some moments I can hardly tolerate the girlfriend in the house (the same is true vice versa) so strangers in the house? Nope.

  5. JJNL

    Sounds like a good plan – I’m contemplating a similar route to semi-FI, as in the Netherlands the rules are quite similar (as are the high taxes) and it is MUCH easier to get to a point where you only have to work for half the time or a bit less than it is to save up enough to never have to work at all. I was more thinking along the line of working for 6 months, then travel 6 months, or similar schedules like that. The friends I have who are closest to this lifestyle are a self-employed couple. He is in IT, she is in coaching. They basically work on projects until they have enough saved up to go on a long hiking trip, then hike for months on end – rinse and repeat. As for suggestions about what you could be doing:
    – I second the tips for something IT-related and self-employed, as a) those jobs can easily be done remotely, b) the IT sector always is shorthanded, and this won’t change in the foreseeable future and c) there is already a culture that supports hiring people to work remotely on short-term projects. Sticking to something that requires you to speak Dutch or French limits the possibilities for outsourcing to low-cost countries (I would say long-term Dutch is probably better than French, assuming Africa will follow Asia as the place to outsource things to in the long run – a Senegalese low-cost IT guy will be fluent in French).
    – Working a highly seasonal job works too. Tip: go to work in summer-only bars/restaurants (in Dutch: strandpaviljoen). Those jobs are only there during summer, and owners like employees who return every season. I should know, bartending at one of these used to be my summer job. It was hard work, but due to the relatively long hours and high tips also good earning.
    – For AirBNB: you could use that to make money while you aren’t there. There are people with houses in Amsterdam who are more or less perma-travelling the world, while a company in the Netherlands acts as middleman and rents out their house on AirBNB for a percentage of earnings. However, it is likely that such arrangements will be prohibited in the near future here. Also, having this arrangement usually sucks for your neighbours. If you want something more ethical, have some real estate that you can rent out normally, i.e. not through AirBNB. However, I think both of these options are not as tax advantageous – in the Netherlands neither would likely count as income from employment, so there would not be the same tax free threshold.

    • finan112_wp

      it will probably end up being something IT-related or seasonal. Airbnb is indeed a possibility when we are not in the country (and very low chance our small town would ever block it)

  6. Time Will Tell

    To get past the problem that employers will probably not be happy to see you work only for 3 months a year, you could try to team up with some other FIRE-adepts with similar job experience in a little company. If you rotate with your co-workers, you can provide the service year-round, and employers/clients might be more willing to hire you.

    • finan112_wp

      I once read about a company off four people where each would have three months off which was spend on a jointly owned boat somewhere in the carribeans

  7. Kurt

    I’ve been comtemplating going the independent route myself once my nestegg is finally big enough.

    However, once independent we have to pay our social security contributions ourselves, and if I am not mistaken the minimum contribution is roughly 2800 € per year. Even if you only have an annual turnover of a few thousands euros, you still need to pay this amount.

    Correct me if I am wrong, but if you would earn an income of 2400 € during 3 months, your ‘taxfree’ income would be around 4400 € ( (2400×3) – 2800).

    I am no expert in this, but even if you would set up your side gig in a remote location ( as an independent), you would still need to pay your social security contributions if you would like to stay within the Belgian system.

    • finan112_wp

      My example was using the assumption of being a paid employee where your employer would need to pay that. If you go the independent route you indeed need to take your social security contributions into account and thus charge your ‘client’ enough to compensate for this. If I would be independent I would definitely want to make more than 2400 € gross a month (lower pension and such also need to me taken into account).

  8. The cycling investor

    Nice article and thoughts as I am also in the same boat…living in Belgium. I am a teacher and in our educational system we have the luck that you can teach as many hours as you want. I have a fix contract ( called statutair in dutch) Each year in May I can tell my headmaster how many hours i want to teach the next year. My plan is in a few years to work for 5 to 10 lessons in a week (secundary school) The amount of holidays allow you to travel. Although backpacking for 5 months still isn’t possible.So my advice for you: if you have some skills like ict or mathematics go for a job in education.

    • finan112_wp

      Teaching is something I lack the patience for. All praise to those who can do it, but not something for me.

  9. When Do You Retire?

    Very interesting post! I love loopholes 😀

    • finan112_wp

      Me too!

  10. Hans

    Nice thoughts on the topic.
    If i can contribute something: I think that you should not fix too much on the 7420 euro. If a job pays 10k, you will stil have 7420 euro untaxed;).

    Some things not mentioned here: Writing (articles or whatever), to earn some money. And blog income. I

    • finan112_wp

      We have a mortgage deduction so could go higher than 7420 euro but then again, we do not want to work too much either … But always good to have some buffer, even if it is a work buffer.

  11. Claudia

    Nice numbers and reeeally usefulll! definitely it helps me your article 🙂 because I didn’t search the exit strategy – until now I calculated my number as “10 years in lazy speed” ( as I already told you last week) where lazy speed definition is to do nothing more or less than now and to put away only tax deductions and the passive revenues. This is the main reason I don’t want to pay faster the mortgage: the fiscal deduction. This is worse case scenario but common 10 more years are passing fast.
    And I must admit that my easiest money gained are the money not paid for taxes and I am grateful to my accountant. I regret I didn’t discuss with an accountant at the first coming in Belgium.

    Small amendments: you should clarify and separate the 2 paths: one with the invoices 700 x 4 = 2800 € contribution for “caisse social” as independent, or second to search a job as employee, a little more complicated because needs to find a job.
    For me, I started to “experiment” a third path: working as freelancer owning my company. Now I search how to put my company to create a passive revenue… the most common here is to put my company on positive at the end of the year, to invest at the end of every year, to buy houses as company and to gain rent enough to cover the minimum salary for me. This is a path interesting too because (ignoring the contribution of 18600€ at the opening) I switched to pay a less taxes but don’t forget this depends of the laws and tax rules are easy to change.

    About extra jobs/small revenues – I must admit I started to looking for, too. A nice idea is to have a type of qualification and to offer all the availability to replace 3-6 months when the workers with unlimited contract are starting a medical leave or maternity leave. This is an idea suitable for your girlfriend 😉 .

    P.S. I already took almost 2 months off last year and for this year again, as freelancer, so I can feel the wind of freedom NOW.

    • finan112_wp

      The independent/freelance thing is something I will look into more once my exit comes closer.

      Working for your own company might reduce your taxes but I think the run costs will be too high in semi-retirement (because you will not work a lot per year and the costs are fixed). So for an exit strategy it will be either working for somebody or the freelance/independent route.

  12. MustardSeedMoney

    I was wondering if there are any places that you could potentially move to that would lower your tax burden with lower COLA. It may allow you to speed up that exit strategy and allow you to pursue some things in your life that you are more passionate about 🙂

    • finan112_wp

      Belgium so you quickly end up in another country (so many new laws and rules to learn + taxes are high in all our surrounding countries, + my German isn’t that good and do not have the inclination to improve it now) or in the french speaking part of Belgium (and my French is ok, but to go live in the French speaking part, nah). And most decent jobs are in Brussels or Antwerp, the further you go from those the cheaper houses do get but that would add even more time to the commute (I am at the maximum I want to do now, and the reason was to find a cheaper house). Everything else is more or less the same cost in Belgium.

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