Optimism prevailed in a recent Goldman Sachs Survey on the ‘New Economics of Retirement,’ that posed questions to 5,102 individuals aged from 21 - 65+, a blend of those still working and retired.

With this new survey providing some revealing information about how people feel around not just retirement planning, but their financial situation as a whole, we wondered how these results intersect with the concept of Financial Independence levels.

Grant Sabatier’s book, Financial Freedom: A Proven Path to All the Money You Will Ever Need breaks down the seven levels of life and financial stages people hit on the path toward being financially independent, or simply: being able to pay their living expenses without relying on actively working.

This concept can further be tied to the FIRE Movement (Financial Independence, Retire Early) which aims to offer individuals more control over their time, the flexibility to follow their passions, and less stress over financial obligations. (Due.com)

What’s the point of all of this? When you’re worried about your financial situation, it’s hard to tell where you’re at in what seems like a really long journey.

By seeing yourself on one of these levels, it can help you build confidence on what you’ve accomplished so far, and provide smaller steps to get to the next phase instead of trying to go from Level 2 to Level 7 in one go.

You’ll notice we have eight levels: we wanted to outline the very basic place we all start from, which is ultimate dependence on others to support us.

The dependence stage is where we all begin, as children, depending on our support systems and with no financial freedom of our own.

In this stage, you’re financially dependent on the help of others and cannot survive unassisted for great periods.

The second stage is when reality begins to set in and you wonder how to make financial headway. At this stage, you take stock of your financial situation — how much money you have, how much you owe, and what your goals are. 

For some, this stage comes much earlier through education, hardship, or difficult life situations. For others, it comes much later because they have the safety net of parents, remittances from a trust, or plain old irresponsibility.

This is one step up from being dependent and when you begin to undergo the rite of passage towards financial freedom.

At this stage, you are beginning to stand on your own two feet, financially speaking. This means earning enough to cover your expenses without any outside help, such as contributions from your parents. 

This level is attained once you can pay your bills, start decreasing your debt and have money left over to start saving.

People at Level 4 have money left over after living expenses that they can put toward goals such as building an emergency fund and investing for retirement. Getting to this level implies that you have some means of financial leeway. 

Read the whole article, and all 8 Levels of Financial Freedom👇