Comments on: 10 Stages of Financial Freedom

By: Myths About Money | Productivity501

Myths About Money | Productivity501 — Mon, 23 Aug 2010 16:25:57 +0000

[...] the more people I meet, the more I come to realize that biggest thing that determines your level of financial freedom has to do with your beliefs about money. I’m not talking about the “if you think [...]

By: Borrow from your IRA | Productivity501

Borrow from your IRA | Productivity501 — Mon, 21 Jun 2010 21:38:19 +0000

[...] most people looking for a way to borrow money from their IRA, this loophole is a really really bad financial idea. People looking for this type of loan are under financial distress with problems that [...]

By: SallyBeam | SelfHelpFriend .com

SallyBeam | SelfHelpFriend .com — Tue, 23 Feb 2010 10:36:44 +0000

Wow..Simple & True Level for financial freedom.

Add up more on “Pay Yourself First”. I’ve heard and understand this term better from “Automatic Millionaire” Book.

By: Saurabh Chavda

Saurabh Chavda — Tue, 05 Jan 2010 08:05:11 +0000

Very very interesting article, very simple but to the point, people like me are simply forgetting this simple formula and keep crying about their finances. Luckiely I am stage 4 right now, I might be at stage 6 if I have got this useful simple but very effective article earlier. Thanks and God bless you.

By: Jaryd

Jaryd — Mon, 21 Dec 2009 16:47:21 +0000

I understand your point, but no matter which way you go about working toward financial freedom, you will always be dependent on something. If you are an employee you are dependent on your employer; if you own a business you can be dependent on your employees, or the economy; if you invest than you are definitely dependent the market. While you may have a lot more control over your decisions by being an employer rather than an employee, you will always be dependent on something.

Wealth isn’t created in a vacuum. So, in that sense, if we are defining financial freedom as “being dependent only on oneself rather than external factors,” I don’t know if anyone really can be. At least with contemporary methods.

I’m playing a little devil’s advocate here. I do see your point.

Also, do you consider retirement age the border between financial freedom or servitude? The retirement age is just an arbitrary line we drew for tax purposes. Would you consider it necessary to retire “early” in order to be financially free?

By: Mark Shead

Mark Shead — Mon, 21 Dec 2009 16:05:32 +0000

Very few employees are going to earn enough that they can just stop working before they reach retirement age. So most people won’t attain that level of financial freedom. Now I do believe that most people can get to a point where they can retire, cut their expenses and live satisfied for the rest of their lives, but that wasn’t really what I meant by financial freedom. I don’t consider being dependent on an employer to be freedom.

By: Mark Shead

Mark Shead — Mon, 21 Dec 2009 16:02:27 +0000

There are definitely other ways to make money–including getting a huge inheritance. So you are correct. This is just one plan, but probably the one that is within reach for the largest number of people.

By: Andrew

Andrew — Mon, 21 Dec 2009 00:38:46 +0000

I like this because it makes the idea of saving for retirement less like a distant burden and more an immediately desirable goal. I know when i have money in the bank i will happily flirt with fines if the probability is low, will speak more candidly at work, and generally take more risks, simply because the huge costs of poverty are far less likely.

My only qualm is steps 4-8. Surely becoming an investment banker for 20 years without upping your expenses works just as well as someone that starts their own business. Using that (substantial) money to invest in high risk stocks would have an expected payout and risk similar to starting your own business. I’m not putting down starting a business, but there are other ways to make money.

By: Jaryd

Jaryd — Sun, 20 Dec 2009 07:06:24 +0000

I wouldn’t say that you have to own your own business to get to level 10 of financial freedom. I’m sure most people would love to be their own boss, but how realistic is that? Our economy depends on people that work for others. Could your business expand without people working under you? Most likely not.

This list makes it seem like anyone that is an employee can never reach true financial independence. What if they make enough money to invest, and then no longer have to work a day-to-day job? Not everyone can own a business, but I think everyone can achieve financial freedom.

By: Ralph

Ralph — Wed, 16 Dec 2009 08:46:32 +0000

Great list. Very simple and well developed.

By: Adam Martin

Adam Martin — Fri, 11 Dec 2009 16:12:26 +0000

Very simple way to put it. I like it.

By: Lakshmipathy

Lakshmipathy — Fri, 04 Dec 2009 08:56:53 +0000

Thank you so much … it helped me a lot to think much more in terms of savings

By: Arjun Muralidharan (TheProductiveStudent.com)

Arjun Muralidharan (TheProductiveStudent.com) — Thu, 03 Dec 2009 03:48:53 +0000

Hi Mark,

I think this is a great scale for a single reason: Most people hover around stage 2 or 3, which puts things into great perspective. Most Fotrune 500 CEOs are at 10.

I think even more interesting is that if you were to go from 1 to 10 step by step, you’re doing it the “hard way”. Which in part explains why people are so obsesses with getting promotions at work, which creates this illusion that you can jump directly over steps 4-8.

By: TheAnand

TheAnand — Wed, 02 Dec 2009 20:31:50 +0000

WOW…..the cycle of money :) Well written! :) I am most probably in the level where I earn enough to cover my business expenses….

long way to go :)