It's simple to think about the ultimate freedom to do whatever you want, whenever you want, but there are some intermediate steps to get to that promised land.
Do you want to travel the world, retire early, not worry about money?
Here are what we consider the different stages of financial freedom that our clients go through:
This is the stage where you are clear about your current finances, you know where your money is going, and you're clear on your money and life goals.
Our clients achieve this within the first couple of weeks of joining us, getting organized is the first step to greater
Now that you have a good sense of where your money is going, this is the stage where you're spending within your means, and deciding intentionally where your money should go. You are not dependent on anyone else for your survival.
This is where you now have money left over at the end of each month, and it's being put towards your emergency savings as well as your goals. This is the stage where you have saved enough to sustain yourself for a couple of months even if you lose your job or you don't have to turn to credit cards in case of an emergency.
This is the stage where you have paid off all your debts and you are starting to fund your goals. Whether it's your travel fund, or downpayment for a house, or even your fu*k-it fund, you're spending money in ways that move you forward towards your life goals.
This is the stage where you're now actively investing, and your money is starting to work for you. Whether it's active investing, or working with a financial advisor or even robo-advisory platforms, you're putting aside money each month to grow beyond your savings and goals.
This is the stage where your money earns more for you. It’s when you have enough investments and savings that the return you get is enough to sustain your expenses without working. At this point, you work on something because it’s your hobby, and not to earn money.
This is the stage where you have accumulated so much money that you would not be able to spend all in your lifetime.
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