7 Stages Achieving Financial Freedom
Financial Freedom means the liberty to live the life you want without worrying about finances. You can achieve financial freedom by having sufficient savings, investments and liquid cash to deal with almost any situation life may throw at you.
7 Stages Achieving Financial Freedom
- 1. DEPENDENT
- 2. SOLVENCY
- 3. STABLE
- 4. SECURITY
- 5. INDEPENDENCE
- 6. ABUNDANCE
- 7. FREEDOM
Financial Freedom means the liberty to live the life you want without worrying about finances. You can achieve financial freedom by having sufficient savings, investments and liquid cash to deal with almost any situation life may throw at you.
But you need to work hard and have to clear plan to achieve financial freedom, thus follow the aforementioned stages to get an overview on how to achieve it.
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1. DEPENDENT
At this level, things aren't easy and you might be unhappy with your financial position. You're likely financially dependent on others. And at this stage, you can probably only continue on in this way in the short term.
2. SOLVENCY
Solvency or "survival" is when your outgoings and expenses are lower than your earnings. In this stage, you're likely able to meet your financial commitments, pay all your bills, and not rely on someone or something to help you cover your expenses.
3. STABLE
Once you're able to consistently meet your financial commitments, have paid off some debts, and you're able to keep your expenses down, then you can start saving. First for your emergency fund, then for your longer-term growth
4. SECURITY
Once you have built your emergency fund, we think that it's time to consider investing. Hopefully, when you have built a solid investment base, you aren't relying on your income to cover your basic expenses. You may successfully be building and managing your wealth, and be on the path to earning your financial freedom.
5. INDEPENDENCE
At this point, you should have made solid, long-term investments. And your investment earnings are enough to cover your current lifestyle.
6. ABUNDANCE
It will take time to realize financial independence, but the peace of mind, confidence, and control over your destiny will be well worth it.So there you have it. It's not easy to reach financial independence, but it is not impossible
7. FREEDOM
This is the stage people often dream about. You can afford the basics but should be able to afford comforts and luxuries too. Here, you may be able to take bigger risks and opportunities.
