These are the 7 levels of financial independence that exist: how to know which one you are in

The so-called financial independence is surely a goal for everyone. Have peace of mind to know that, even if they come badly, we have a cushion and in some cases the ability to continue generating .

In recent years a lot has been written about it due to examples of people who say they have achieved it and thus work less, or at least, in something that gives them greater freedom. The American Grant Sabatier is one of them. Sabitier found himself in 2010, at the age of 24, as he had just returned to live with his parents after jumping from one job to another and being laid off in the midst of the crisis of 2008. At that moment, Sabatier knew he had to put his finances in order, and he achieved it by starting several businesses and a strict saving method that .

But how do we know what degree of freedom or financial independence each one of us is in? Sabitier himself has created a seven-point scale.

The 7 levels to financial independence

-1: Clarity: Sabitier believes that the first step is to take stock of your financial situation: how much money you have, how much you owe, and what your goals are. “You can’t get where you want to go without knowing where you’re starting from,” says Sabatier.

-2: Self-sufficiency: In this phase are the people who manage to earn enough to cover your expenses without any external help, but who live from month to month.

-3: Those who can breathe: People who are in Level 3 have money left over after living expenses that they can use for goals such as creating an emergency fund or investing.

-4: Stability: Those who reach level 4 have paid off all their debts, and according to Sabitier they have six months of living expenses saved in an emergency fund. Accumulating savings for emergencies helps ensure that the finances of any individual or family are not sidetracked by unexpected circumstances, such as losing a job or having a financial setback of any kind.

-5: Flexibility: Level 5 people have saved at least two years of living expenses. With that kind of savings, Sabatier suggests, you have the ability to think about your money in terms of the time you can spend without work, for example.

-7: Abundant wealth: Financially independent people who have raised the amount of money you would need to retire and earn an annual income you can live on comfortably.