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Having a dream house, or car, sending your children to the best schools, traveling to dream destinations, having protection and investment for yourself and your family, and having an established economic situation is definitely everyone's dream. However, achieving all of that requires consistent struggle and effort to achieve financial freedom. Reporting from www.getrichslowly.org, you can find out where you are economically and financially. Here are some steps to financial freedom that you need to know.
Stage 0
Dependence
Dependence
In this stage, your needs and lifestyle are still being financed by others. For example, your living needs are still being financed and dependent on your parents. Moreover, if your expenses and debts exceed your income, you can say you are still at this level.
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Stage 1
Solvency
Solvency
At this stage, you have found a financial commitment without outside help. You have reached this stage when you start to get "profit" from the work or business you do, where income exceeds expenses. In this stage, you use the surplus you get to pay debts and can also meet financial obligations that must be paid.
Stage 2
Stability
Stability
In this stage, you have reached economic stability where you no longer have debt. You can pay off credit card bills, bank loans, etc. But you still have "good debt" for example, the cost of mortgage installments. You've eliminated other obligations and built an emergency savings buffer to protect yourself from the unexpected.
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Stage 3
Agency
Agency
You have achieved the freedom to live and work as you choose. At this stage, you have eliminated debts such as loans for education funds, and mortgage installments (you have the cash to pay them off). At this stage, you have enough savings in the bank to quit your job without worrying about the future.
Stage 4
Security
Security
The income from your investment can cover the basic needs of you and your family. The money you have saved and invested can finance household needs, proper clothing, food, housing, and insurance to protect income and financial cash flow. You can do this even if you won't be working again for the rest of your life.
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Stage 5
Independence
Independence
Well, if you have reached this stage, it means that you have reached the stage of comfort. In this position, the income from your savings and investments can cover the new life you have, ranging from basic needs to comfort. In other words, your life is financially and economically sufficient.
Stage 6
Abundance
Abundance
When you have reached this stage, it means you are in a position of abundance. All passive income from your investment not only finances your lifestyle, but also gives you the freedom to do whatever you want and choose, such as: enjoying luxury goods, building a business, and exploring the world.
