Basically, there are four levels of wealth that can be attained by you, as follows:
Level #1. Financial stability
You will achieve financial stability when you have accumulated enough money to cover current expenses for at least six months. If you ask me, getting insurance for yourself and your family is also important. To enhance your financial stability, you can:
- a. clear off outstanding debts to minimize the burden on your cash inflow.
- b. find some good investment options. You must save at least 10-20% of your monthly income. This will ensure that you have sufficient cash flow during emergencies.
- c. ask a financial advisor or attend a financial freedom conference to gather knowledge about the different aspects of business.
Level #2. Passive Income options
In this stage, you can stop working but still have enough money to pay off your debts and meet the monthly bills. There are plenty of alternatives for accumulating passive income but you need to choose the right one for you.
Level #3. Financial Freedom
Financial freedom is the stage where you have created enough wealth to sustain your current lifestyle without working again.
Level #4. Financial Surplus
As the last and highest level of wealth, financial surplus is attainted when you have enough passive income to continue with your present lifestyle without working for an indefinite period of time. This is the stage when you have reached your desired position and selected the lifestyle you really wanted.
True financial freedom will be achieved after you reach the final stage. However, don’t forget to enjoy and cherish the rewards of each stage of your financial success.
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