How to Become Rich, Financially Independent, and a Passive-Income Earner

Becoming a rentier, earning a lot of money, becoming a billionaire, growing one’s wealth, being able to invest in real estate or in various financial placements… everyone dreams of it and often thinks it’s impossible!

However, determination, organization and discipline in your personal finances and mastery of your budget can help you reach this objective and thus become wealthy, to the point of living off capital income, in the manner of a rentier!

Discover in this article and in video five commandments to follow to become a rentier, our explanations for becoming financially independent, as well as our list of investments and envelopes to prioritize to grow capital over time.

How to earn more money to become wealthy? In video

The main steps to become rich

How to train yourself and learn economics and finance to become rich?

Becoming wealthy and a rentier first requires substantial preparation, starting with learning concepts related to economics and finance. The goal is to build a financial and wealth culture, almost non-existent in a French school curriculum unless you pursued an economics-focused program.

Inform yourself, learn, via general and specialized press of course, but also via books, specialized sites (such as Café de la Bourse), or MOOCs, webinars, etc. The educational offering from your stockbroker can be a good information supplement. Thanks to the Internet, all the information you need is at your disposal regarding stocks, finance, economy and investing.

How to set clear and precise financial goals to become a rentier?

Rome wasn’t built in a day, you won’t spend 365 days a year basking under a coconut tree in one month. Perhaps you’ll never do so. At the start, indeed, your rente will only serve as a supplementary income, more or less significant. Only in a second stage will you be able to stop working and live on the income from those rents. Set clear financial goals with the understanding that you will very likely begin with a small rente, a small amount of money, which will grow gradually over time.

Being rich does not mean the same thing for everyone and the amount you need each month to become rich will vary greatly depending on people, their education, their habits and lifestyles, their personal situation (single, with children, etc.). Indeed, a life without work is not accessible from a given capital amount but is dictated by your needs and desires. One person may be happy with 3,000 euros per month, another may not be satisfied with 10,000 euros. The capital required to cover such income through a rente is obviously not the same at all.

Finally, you will need to decide whether you want to generate supplementary income by spending down your capital or by keeping it to build savings. This is two very different ways of looking at your incomes. In the first case, you draw from your savings by gradually spending down the capital and the money you have left. In the second case, you live only on the interest your capital earns. It remains to decide what you want or do not want to pass on to your heirs. Note also that the first option obviously requires much less capital than the second.

You will, according to your desires and needs, determine how much you think you need to earn to consider yourself rich, precisely define that amount, and determine the amount of capital needed to reach it depending on whether you choose to live off capital income or to live off the depletion of capital.

In any case, very early in your thinking, you should be clear on these elements:

• your starting capital;
• your saving capacity;
• your investment horizon;
• the ideal amount of your supplementary income;
• the period over which you wish to receive these incomes.

It’s up to you to ensure coherence among these points to define realistic goals. You cannot expect to receive 5,000 euros of monthly income in 10 years when you are earning the minimum wage.

Why should you dare to step out of your comfort zone to become rich?

To become a rentier and earn money, you must also be ready to question yourself and reconsider all your ideas in the financial domain, even if many things seem to be obviously true, immutable and fair at first glance. Step out of your comfort zone by systematically questioning all your financial decisions. For example, one might think it is wiser to buy one’s main residence, which would save you rent that you would have to pay with your rente. And yet, no! It is not necessarily the best option to become a rentier. It may be wiser to build up a portfolio of financial assets.

Similarly, you might think it will be easier to become rich by entrusting your stock investments to the expertise of a manager and opting for actively managed funds. But, in the long run, passive management almost consistently outperforms active management, so you would have more interest in investing your money in ETFs of major world stock indices rather than putting it into investment funds that are not necessarily very rewarding and that also charge significant management fees.

How to save and set aside money to be financially independent and become rich?

Before becoming a rentier, you must either inherit or work to build a basic nest egg. This base capital is indeed a necessary prerequisite. For that, you must save! Your savings should amount to about 30% of your income. To set aside money in an effortless way, start saving as early as possible, even small amounts of money.

If you have trouble saving, see our article How to Save: 19 tips for lazy people

Numerical examples to become a rentier

For example, at age 30, if you set aside 250 euros per month to invest for a retirement supplement at 65, with an assumed annual return of 3%, you will have a capital of 184,570 euros at retirement (including 79,320 euros in interest). If you set aside 500 euros per month, you will have 369,140 euros at retirement (including 158,641 euros in interest).

Conversely, starting to save for retirement at age 40 will yield a capital of 111,397 euros (including 36,147 euros in interest) after saving 250 per month, and 222,794 euros including 72,294 euros in interest after saving 500 per month. Starting to save 10 years later shows a gap of over 73,000 by saving 250 euros per month and over 146,000 by saving 500 euros per month.

These calculations were made with the assumption of a 3% annual return, i.e., a return with very low risk. But depending on the risk you are willing to take, the return can be higher. The stock market, for example, offers much higher long-term returns. Thus, the average annual return of Nasdaq since its inception is around 10% per year; the same for the MSCI World; the CAC 40, since 1987, has recorded an annualized return around 9% per year.

Compound interest, the best ally of the long-term investor

Even with a relatively low return, the importance of compounded interest in building your wealth is clear. Three key points to remember:

• the interest earned itself generates interest, exponentially;
• the longer the horizon, the faster the phenomenon accelerates;
• it is one of the main reasons why starting to invest early is often more effective than investing more later.

Compound interest, without a doubt, is the best way to become rich but it requires regularity and patience; the share of interest, over time, becomes much more significant than the saving effort.

Which investments to favor to become rich?

Finally, you must take action! To become a rentier, you will need to invest your money. The essential rule to follow is diversification. The old adage states: don’t put all your eggs in one basket. In terms of money, it is obviously the same. The objective will be to reach an advantageous balance between risk-free investments with capital guaranteed, though modestly remunerative, and more risky products displaying significant performance. To become rich, you must therefore choose the best risk-return pair based on your investor profile. Discover the different investments and assets that should be in your financial portfolio, in a proportion that will vary according to your risk tolerance.

The stocks on the stock market: an asset class that will help you become rich in the long run

According to Allianz’s study “Stocks: real medium-term potential” conducted in January 2014, stocks have created more value over the last two centuries than the best-rated government bonds and monetary instruments, thus constituting a “surprisingly safe in the long term” investment.

Stocks are shares of a company traded on the market, and their price fluctuates with stock market variations. The objective is, of course, to make money from these securities by receiving dividends (an amount paid to shareholders corresponding to a portion of profits) but also by realizing a capital gain (selling the share for more than it was bought). To uncover the stocks most likely to see their price rise, the investor must perform stock picking based on fundamental analysis before determining via technical analysis what the best moment to buy them is. This practice requires, of course, a bit of time, a certain mastery of stock analysis and a certain amount of capital since stocks can be fairly expensive and diversification numerically requires owning a number of them.

Mutual funds: SICAVs to grow your capital over time

If you do not wish to select your own securities and want to benefit from a good degree of diversification with a smaller budget, mutual funds are an ideal way to position yourself on the stock market. Investment funds, and notably SICAVs, can indeed allow you to diversify your financial portfolio effectively. The returns of these funds are, however, very uneven and management fees can significantly erode performance. Nevertheless, the best SICAVs can outperform their benchmark and help you effectively grow your money. You should therefore choose your investment fund with care, being particularly vigilant about performance history, volatility and fees.

ETFs: listed index funds to grow your money over time

ETFs trade like a stock and replicate the performance of a reference index. These exchange-traded funds, which help you position yourself easily and at low costs where performance exists, can also be a good investment option. More and more life insurance contracts now offer ETFs. But they can also be held in a securities account and even in a PEA for some. Investing in Stocks via ETFs from a PEA is a smart way to grow your capital and become rich. Indeed, you can invest in stock markets, in Europe as well as worldwide, at reduced costs, and benefit from the favorable tax framework of the PEA which provides complete tax exemption on capital gains after 5 years of holding the plan.

Structured products to seek performance with controlled risk

To invest your money in stock markets and become rich, you can also turn to structured products which can be particularly interesting given their partial capital protection in exchange for a capped return. Before inserting this type of relatively complex products with underlying assets into your portfolio, make sure you have a good understanding of how they work, of how the calculation is performed, of the mechanisms put in place and their consequences.

Stock market products to boost short-term returns

Stock market products that most often allow investing up as well as down on a given underlying (stock, index, etc.) with a leverage effect can yield profits quickly and thus become rich very fast in case of a good forecast. However, in case of a wrong forecast, your losses will be amplified. This means you could lose up to the entire investment, and even more with potentially unlimited losses with some derivatives.

Derivative products such as warrants, turbos or options, for example, should therefore be handled with the greatest caution by experienced investors who thoroughly understand both the underlying asset they wish to invest in, the product specifics they want to use, and especially the risks they take.

SCPI to generate income through the real estate market

If you want to invest in real estate, Real Estate Investment Companies (SCPI) are a particularly interesting placement due to diversification and liquidity. They also allow you to enter the real estate market with just a few thousand euros and thus constitute an interesting investment for aspiring rentiers who want to become wealthy but are still young and have little capital. It is a real alternative to direct rental investment that indeed provides regular supplementary income often substantial but also requires a fairly significant upfront outlay.

Moreover, an investment in SCPI can be as profitable as direct rental investment but carries less risk (notably vacancy risk) given the nature of this investment where investors own a share of the overall real estate portfolio. Note that the best SCPIs deliver a performance close to 10% in 2026. SCPIs are available directly or via life insurance.

Trading: a high-risk option with high returns for a seasoned investor

Finally, trading can also be an investment option to become rich, notably through trading commodities like gold or oil, for example. However, trading is a particularly risky practice and should be tested with a small amount at the start, representing a very small portion of your capital, on a demo account, and with proper support, training and a lot of time devoted. Trading is not improvised and if you want to make it a activity that allows you to build a supplementary income to grow your earnings and become financially independent faster, treat it as a side activity, and not as a hobby practiced casually.

Which investment envelopes to choose to become rich?

Bank books for everyday finances

Bank products such as passbooks will serve you as a very short-term placement to fund your living costs. In other words, these are envelopes on which you should keep your emergency savings and the amounts intended to finance short-term projects such as buying a car or taking a vacation, for example. You can opt for regulated savings wallets like the Livret A or LDDS for instance which have the advantage of being completely exempt from capital gains tax and social contributions but which have relatively low ceilings.

You can also opt for taxed bank accounts that have a very high cap or even no cap. In all cases, the yield is relatively low. Therefore, to become rich, keep the absolute minimum in these placements and invest your money in riskier and more remunerative assets.

Life insurance to grow your capital in the short, medium and long term

Life insurance is a particularly interesting investment because it addresses diversification very well since it comprises both a secure euro fund, which is less remunerative but capital-protected, and unit-linked accounts that are higher risk but offer much higher yield prospects by allowing investment in stock markets, real estate, commodities, etc. You can notably invest in live securities, SCPI shares, SICAVs, ETFs and even structured products.

The PEA and the securities account to grow your stock market investments

The PEA will quickly prove to be the simplest and most advantageous solution for investing in shares and ETFs since it will allow you to manage a portfolio of securities:

• without tax on realized capital gains or dividends held within the PEA, as long as they remain within the envelope, i.e., kept in the cash account or reinvested;
• and without tax on gains at the exit from the PEA, only social contributions are due, 18.6% since 2026.

However, the PEA does not allow direct investment in companies whose registered office is outside the European Union nor access to SRD or short selling. Short selling is therefore not permitted, as is the use of stock market products. To buy actual shares of companies outside the EU or to engage in short selling or to invest in other stock market products, you will need to open a regular securities account.

Why tax matters in your investments to become rich?

Regardless of your level of risk aversion, taxation is an essential element to take into account in your investment choices. Favor investments shielded from taxes and the best tax-efficient investments so that your rente is not “eaten away” by the current taxation. Life insurance or the PEA, for example, are interesting placements in light of their specific tax treatment. But beware of falling into excess and keeping an investment that yields little simply because it is lightly taxed. It is better to have a taxed investment that yields a lot than a lightly taxed investment that yields nothing. Consider the net return of the investment after taxes if you have any doubt.

Finally, if you want to become rich and live like a rentier, remember that you will only be able to claim financial freedom after you have built a healthy relationship with money. Do not forget that money is not an end in itself. It should (and must) serve your life project.

3 mistakes to avoid when you want to become a rentier

Mistake 1: Overestimating saving capacity

The more you can invest each month, the faster you can become a rentier. But be careful not to be too optimistic about your saving capacity. It can be easy to cut leisure expenses for 3 months to fund the trip of your dreams, but it’s impossible to sacrifice your leisure budget for years to finance your future financial independence, under penalty of major financial breakdowns, or “pauses” that will question your entire investment plan. You should therefore set a realistic amount when determining your saving capacity, to keep it up over time and achieve your objective.

Mistake 2: exiting a placement in a random way

It is essential to determine in advance whether you anticipate exiting a placement or whether you will stick with the income it provides. In the case of an exit, it is essential to know in advance what form the exit of each placement will take (income stream or capital payout, or both). It is also important to anticipate the exit by considering these factors:

• the investment horizon of the placement: you will not exit from a SCPI purchased for 3 years, for example;
• stock market fluctuations: it is recommended to exit at a high, but you can never identify it with certainty; however, you should avoid exiting at a low;
• the tax prehistory: you should avoid exiting before 8 years of life insurance, for example, or 5 years for your PEA.

Mistake 3: not getting guidance

Gaining financial independence is not impossible, certainly, but it is a relatively slow and challenging process to implement. You would therefore gain from getting support from a wealth management advisor. This way you can define your project calmly, on solid and objective foundations, and cover all aspects of your wealth strategy, including aspects you might not have thought of, such as taxation or transmission for example.

How to become rich? Key takeaways

Becoming rich or achieving financial independence does not depend on a miracle placement, but on a strategy built over time. Regular saving, diversified investing, mastering your taxation and letting time work in favor of compounding are the main levers to grow your wealth. More than income level, it is consistency and discipline that often make the difference in the long run.

All of our information is, by nature, generic. It does not take into account your personal situation and does not constitute personalized recommendations for executing transactions and cannot be equated with financial investment advice, nor to any incentive to buy or sell financial instruments. The reader is solely responsible for using the information provided, and no recourse against the publisher Cafedelabourse.com is possible. The publisher Cafedelabourse.com’s liability cannot be engaged in case of error, omission or ill-advised investment.