- Financial freedom means different things to different people
- Knowing your financial situation helps you figure out your goal
- Everyone is capable of achieving financial freedom
“Young people are starting to understand that if I aggressively save and invest, I can work less and have more control over my future and destiny,’’
Financial freedom means different things to different people. To some people, to be financially free means getting out of debt; to others, it can mean earning enough money to quit the job they hate or never have to work a full-time job again. Even so, every person’s dream is to be financially free. But how do we get there?
In his book “Financial Freedom: A Proven Path to All The Money You Will Ever Need,” Grant Sabatier mentions that there are seven levels to financial freedom, and each time you reach a new level, you will feel more powerful and in control of your money.
Clarity refers to the awareness of where you are in your financial situation, such as how much money you have. How much debt do you have to repay? Then figure out where you want to go next. Knowing your financial situation and how much you want to earn to retire early. Doing this will help you to set realistic and attainable financial goals.
During his financial distress time, Sabatier wrote he wanted to have 1 million dollars in 5 years.
At this level, it indicates you have earned enough money to cover personal needs, such as paying rent and bills, without outside help from family or friends. However, you might still be living paycheck to paycheck to make ends meet.
3/ Breathing room
A breathing room means a level where you can escape living from paycheck to paycheck. Reaching this level means you have enough money for your needs and wants. People at level 3 have enough money left over from living expenses they could put toward a savings account or emergency funds.
You reach level four when there is six months’ worth of living expenses saved, and you can repay your debts. You are not worried even if you lose your job or move to different cities.
You’ve hustled your way up to level 5, where you have at least two years of living expenses saved. You might be able to take a year off from work with the amount of money. However, level 5 and level 6 are very far apart, according to Sabatier.
6/ Financial freedom
To reach this level, you’ve got to go all out to make money, save, and then invest. It requires a lot of patience and commitment to come to this level. But remember, every extra penny you put into your saving will bring you closer to financial freedom. Even 5% or 10% could help you to retire 2 or 3 years earlier.
“If you are committed to all the trade-offs, you can reach financial freedom in 10 years or less,” said Sabatier.
7/ Abundant wealth
When you have abundant wealth, you have more than enough money to live without worrying about it anymore. At level 7, you don’t have to worry about money, and it’s not essential to your day-to-day existence.
It’s not easy to achieve financial freedom, but Sabatier. believes ( based on his own experience) it’s possible and achievable.
“If you want your life to look different, you have to make different choices,’’ He says.
Written by: Kem Sreyneth