What level are you on financially?
1. Under Water
At this level you cannot afford to pay your bills. You are either living with someone, homeless, or living off of credit.
At this level you really need to come up with a game plan. What you have been doing is clearly not working.
Your life revolves around money- you spend hours thinking about it.
You very likely exhibit some of the symptoms of money stress- anxiety, depression, eating disorders, gambling, sleeplessness, digestive issues… the list goes on…
You need to reduce expenses (how? is probably your first thought), increase income, or, preferably both.
You may want to stick your head in the sand and hope something magically happens to save you from your situation, but this is not really a solution.
If you find yourself at this level, you are not alone. You might be surprised to learn just how many people are experiencing the same thing. I have been there and you CAN work your way to the next level:
2. Self Sustaining
At this level you have just enough money to pay your basic bills, but there is no room to breathe. You are just one unexpected expense or small splurge from level 1.
Once again, you are not alone. There are millions of people living like this, what some call “paycheck-to-paycheck”.
You would like to have a little more cushion, an emergency savings account, perhaps a little to enjoy life with…
You are still spending way too much time worrying about money, but it is not quite as bad as level 1.
As long as you are careful, you can survive, but this is no way to live. You know there is something better and with a little guidance, a solid plan, and some determination you can find your way to level 3:
3. The Good Life
At this level you have no “bad” debt, you have emergency savings, have a little saved for retirement, and you can enjoy splurges and vacations.
You do not need to spend a lot of time on your finances, but you know you can do better.
The downside to this level is that it is easy to be complacent. Things are comfortable.
But, you want to be:
4. Financially Independent
At this point you do not have to work for someone else. You have enough investments that you can live off the income generated from them. These investments may be savings, rental properties, stocks, annuities, or a business you have invested in but do not have to actively participate in.
This is the level the FIRE (financially independent, retire early) crowd are aiming for.
Many younger adults are actively seeking this level. Most older adults hope to hit it by retirement age.
If you have not become proficient in understanding how to get to this level and stay at this level, you have found some great advisors to help you do so. Unfortunately, the vast majority of people never get to this level. For those who do, there is just one more level to achieve:
5. Abundant Wealth
This is the grail.
Money is not a concern. You have more money than you would ever need, assuming you do not do anything crazy with it, and you are enjoying life to the fullest.
You can make a difference in so many lives through philanthropy, gifts, and even the people whose products and services you purchase.
At this level, your main concern is generational wealth. You want your heirs to enjoy the fruits of your labor and you want them to be educated so they can pass it on to future generations.
You know enough to know how active you want to be in your finances and you know enough to know whether someone is trying to take advantage of you or not.
You will want a good team of professionals (at a minimum: CPA, attorney, insurance broker, investment broker) to help you maintain this level.
If you are ready to level up, email me to see if I can be of assistance in helping you reach the next level. Education is key in creating your financial empire. There is nothing more expensive than ignorance. Email me for your free First Steps financial strategy call. It is free and there is no obligation. If I am not what you need, chances are I can point you in the direction of someone who can help. And, if nothing else, we will come up with your next best steps toward your financial goals.