There are 6 levels of financial freedom.
Level 1 – solvency (using income to pay debt & living expenses)
Level 2 – stability (minimal debts, using income to pay living expenses) + emergency fund
Level 3 – debt freedom (free of debt excluding rent/mortgage) + investing + emergency fund
Level 4 – security (investment cash flow is enough to cover rent/mortgage) + emergency fund
Level 5 – independence (investment cash flow = your annual living expenses) + emergency fund
Level 6 – abundance (investment cash flow is greater than anything you want)
Which level are you?
Mike K.
Mike is a front end web developer and marketing specialist. He enjoys writing about the internet, technology, finance, investing and health related topics.