The journey toward financial independence can be divided into five stages. Let’s take a look at each one:
1️⃣ Survival: At this stage, you’re able to cover your bills, but you’re living paycheck to paycheck. You have little to no savings, and you’re dependent on your job to make ends meet.
2️⃣ Progress: If you’ve reached this stage, you’re doing better than most Americans who are struggling to make ends meet. You’re able to save money every month and/or pay off more than the minimum on your debts, which means your net worth is slowly increasing.
3️⃣ Debt-free: In this stage, you’ve worked hard to create a surplus in your budget, and you’ve used it to pay off all your debts. As a result, your net worth is now positive, and you may have some assets in your savings and investment accounts.
4️⃣ Growth: At this stage, you have a solid amount of savings and investments, and you’re able to continue adding to them without worrying about debt. Your monthly cash flow is more than enough to cover your living expenses.
5️⃣ Freedom: Congratulations, you’ve achieved financial freedom! You have enough savings and investments to cover your living expenses for the rest of your life, and you no longer have to rely on a job to make ends meet.
Remember, achieving financial freedom takes time and effort. But if you’re diligent and persistent, you can reach your goals and live the life you’ve always wanted. Don’t give up!
