The reality of different levels of wealth

Three levels of wealth

By Stewart Butterfield

  • Level 1. I’m not stressed out about debt: People who no longer have to worry about their credit card debt or student loans.
  • Level 2. I don’t care what stuff costs in restaurants: How much you spend on a particular meal isn’t impacted by your finances.
  • Level 3. I don’t care what a vacation costs: People who don’t care how expensive the hotel is or which flight they go on.

Six levels of wealth

By Nick Maggiulli

  • Level 1.  Paycheck-to-paycheck:  You are conscious of every dollar you spend.  This includes people with crippling debt.
  • Level 2.  Grocery freedom:  How much specific grocery items cost don’t impact your finances.
  • Level 3.  Restaurant freedom:  You eat what you want at restaurants regardless of the cost.
  • Level 4.  Travel freedom:  You travel when you want, how you want, and stay where you want.
  • Level 5.  House freedom:  You can afford your dream home.
  • Level 6.  Philanthropic freedom:  You can give away money that has a profound impact on others.

Seven stages of financial independence

By Joshua Sheats

  • Stage 0 – Total Financial Dependence. Everyone starts here. When you’re a child, for example, you’re dependent on grown-ups.
  • Stage 1 – Financial Solvency. You can support yourself, without help or handouts from others, and you’re current on your bills.
  • Stage 2 – Financial Stability. You can support yourself, your bills are current, and you hold some savings.
  • Stage 3 – Debt Freedom. You’re debt-free, in addition to the points above. It’s your choice whether or not you want to include your mortgage within this definition.
  • Stage 4 – Financial Security. You have enough investment income to cover basic, bare-bones living costs.
  • Stage 5 – Financial Independence. You have enough investment income to cover your current lifestyle.
  • Stage 6 – Financial Freedom. – You have enough investment income to cover BIG dreams and upgrade your lifestyle.
  • Stage 7 – Financial Abundance. – You have enough investment income that you cannot possibly spend this money. Vast amounts of your money will outlive you, and your focus is wise stewardship of this wealth so that you can leave a beautiful legacy.

Sources

  1. Climbing the Wealth Ladder, December 17, 2019, Nick Maggiulli
    https://ofdollarsanddata.com/climbing-the-wealth-ladder/
  2. The seven stages of financial independence, August 22, 2016, Paula Pant
    https://affordanything.com/stages-financial-independence-joshua-sheats/

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