The 5 Levels of Financial Freedom
In the following sections, we'll go over each of the five tiers in detail, outlining what each one means and how you can quickly advance to the next one.
Level One
If your main source of income suddenly dried up tomorrow, you wouldn't be able to maintain your current way of living for more than a year.
It's possible that your outgoings exceed your takings. The cycle of borrowing and paying back is endless. Many people consider Level 1 to be a modern type of slavery or extreme poverty. But why on earth would they believe that! Reason being, in stage one, there is no active source of money, thus after surviving for a year or so, you would have the same mental and emotional problems as a person locked in slavery or poverty.
Strategy
• Be mindful of your consistent outgoings. You can't miss this.
• • Keep an eye out and minimize any unnecessary spending.
• Transform the money you save by cutting costs into real savings.
• Rather than spending all of your monthly income, set a certain percentage. Also, establish a target percentage of monthly income to be set aside for savings.
Level Two
A level of stability. You are living within your means. The amount saved may be minimal at the moment, serving merely as an emergency fund. Now that you've paid off your bills, you no longer have to worry about accruing more. Anyone who can picture himself surviving for three to five years without regular employment is already a level two member.
Strategy
• Proceed like you did in Level 1.
• Develop some source of passive or supplementary income.
• The advice here is to rein in your wants and put your cash toward meeting your actual, pressing needs instead.
Level Three
You've reached Level 3 of financial independence when you feel so comfortable with your financial situation that you could go seven years without working and still be fine. Assuming you've reached this point, your combined primary and passive incomes should be sufficient to cover all of your monthly bills. You may simply save money every month in addition to paying the monthly installments on your numerous plans and loans.
Strategy
• To help buffer yourself in case of unexpected expenses, invest steadily and wisely in things like health and life insurance.
• The key is to learn how to save and invest in a way that will provide the best results, whether that's in a small business or a piece of property.
• Have a plan for your long-term financial stability.
Level Four
Level 4 brings a sense of financial mastery and a sense of increased freedom. There is a positive return on investment from many passive income sources. You're making great progress in increasing your primary source of income, and your savings are expanding. Your autonomy and independence are taking on a more permanent character. Your investments in various other passive sources are producing enough income each month to allow you to maintain your existing standard of living indefinitely without having to engage in any form of active income generation.
Strategy
• Prioritize your own well-being and the well-being of those closest to you before worrying about paying the bills or saving money.
• Redirect your resources and make an attempt to build up your passive sources so that they can replace your active sources as effectively as possible.
• In addition, diversify your savings by investing in gold, stocks, mutual funds, etc.
Last Level
This level of economic independence is unparalleled. You get to make your own decisions now. You are experiencing a time of great financial prosperity. You are free to leave your current position and pursue self-employment whenever you like. Someday, there may even come when you aren't regularly required to work at all. What this means is that you can forego working in order to support yourself, as the money you earn from your passive income streams and long-term investments will be sufficient. You have accumulated a substantial fortune and are assured of a steady stream of income for the rest of your life.
Strategy
• The finest and most precious type of wealth is good health, therefore protecting it should still be your first priority.
• Money could be moved around from one account to another.
• Develop your own company and plan for its future growth.
• If it makes sense for your company, you may also explore joint ventures and mergers with other enterprises.
Experiments, research, and the experiences of many successful persons and survivors have informed these well-thought-out and doable plans of action. Everyone can profit from this detailed plan to break free from the crushing and degrading cycle of debt. In truth, everyone has a right and a responsibility to pursue and achieve a fulfilling life marked by high levels of happiness and self-respect.