3 Levels of Financial Freedom

Level One- Financial Solvency

Financial Solvency is when you’re able to earn enough money where your debt and living expenses equal your income. Here you are living paycheck to paycheck with no money in your savings account and no money in investment funds.  You have no room for unexpected expenses or personal adventures.  Just going to your 9-5 job every day.

The formula for Financial Solvency is



1- Short/Long Term Liabilities is the total amount of debt you currently have

2- Depreciation is the amount of monetary value your assets lose per year

Level Two- Financial Stability

Financial stability is when your income is greater then your expenses.  Here you feel satisfied with your current financial situation. You don’t have to worry about unexpected bills because you have enough funds saved up for emergencies. Financial stability doesn’t equal filthy rich. In fact, it isn’t a number at all. It’s more of a mindset. When you have financial stability, you don’t have to worry about money and you can focus your energy on other parts of your life.

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10 Ways to Gain Financial Stability

  1. Start a budget
  2. Earn income by doing something you enjoy
  3. Live below your means
  4. Create a profitable side hustle
  5. Pay off your debt
  6. Invest for retirement
  7. Invest in your self 
  8. Make your finances PERSONAL
  9. Maximize your employee benefits
  10. Build an emergency fund                             

Level Three- Financial Abundance

This is the ultimate goal. This is when your income and investment cash flow is greater than anything you want to purpose. Here your finances are the least of your worries and you have the ability to spend money on whatever you would like.  Having multiple streams of income is the best way to get you here.  With two to three incomes you have created a financial balance of inflows and outflows for yourself that allows for a secure future. Abundance doesn’t mean that you have it all. It means that you already do.

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Examples of Streams of Income

  1. Your 9-5 job
  2. Investing in the stock market
  3. Owning real estate
  4. A weekend side hustle


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