A journey to Financial Abundance

A journey to Financial Abundance

When it comes to financial freedom, the first thing crossing your mind, is having enough wealth so you can retire early and spend the rest of your life doing things you love. Well, no one wants to be tied by financial problems or got knocked out by first crisis he faces. Financial Freedom as a result of being a long-term goal, may sound unachievable. Furthermore, you may have a lower income than you were expected. Duo to these two facts creating stages of financial freedom sounds wise.

in this article we are going to speak about financial Abundance.

According to Kyith who wrote “The 11 Stages of Wealth: Which Stage of Wealth are You at?”, there are plenty stages of financial freedom worth mentioning.

0. Dependence

First of all, you should know on what grounds you are standing. Check how dependent you are. Possibly, there’s a chance that you have a wealthy family, and you inherited a worthless amount of heritage. If not, there must be savings you rely on. Or you might have priceless properties or some investments or a value you can exchange into money. These are all called “Assets”.

After evaluating your assets, it’s time to do quite the opposite. Write down every debt you are under. It could be the money you borrowed from a friend or the loans you just took over the past years or the credit card debts. These debts are also known as “Liabilities”.

If you subtract your liabilities from your assets, the amount you’re facing is how much your net worth is. Your net worth being minus means that you haven’t reached independence and once you are not independent, it means you have a lot to do in order to keep your life going the way you’ve always wanted to.

Yet there’s a hope. Calculate your net cash flow, then make a plan to raise it. The higher it gets the better life you’ll have in the future. Write down every income you earn. Remember that the income you’re writing must be a continuous process like a disposable income or interest income from your bank savings.

In the next step, write quite the opposite. Meaning to calculate how much money you spend to keep your life going, and by going, I meant an ordinary life you feel happy being in. And be hypothetical while doing so, because no one’s ever wanted to get stuck on what unexpectedly happens.

Now by subtracting continuous payments from your continuous income, you can see your net cash worth.

To have a complete independent life, get rid of all debts to feel a relief and get yourself free of all the stresses the debts giving you. In doing so, you may think it as a sophisticated process. So let’s go to the next stage.

1. Solvency

solvency

As it said in previous stage having a positive net cash flow is the first step towards financial freedom. Financial solvency is the stage where you gathered all your strength to change your net worth into a positive value. In doing so, you decided not to borrow any money from anyone, this includes friends, family, banks and everything alike.

Take heart, try harder and keep your strong will to repay all your debts you are under. As you gained enough confidence to not to borrow any much money, it is promised that soon you’ll be free from any debt you owe.

By repaying all your debts, you’ll be free entirely and the time has come to path your own way towards financial freedom.

2. Stability

Stability

The time has come to become prepared for a rainy day. Once the first opportunity smiles at you, do not hesitate. Not wanting to be under a debt again is an enough reason to get prepare for the worst imaginable situation. Therefore, create an emergency fund which is surprisingly necessary. Imagine the worst epidemic going to happen, be sure that not only can you survive from the crisis, but also you can enjoy the life you have and you are able to lend a hand towards the people needing it.

With an emergency fund, you reached a safe spot which ensures you that you never going to be in need of others and now you are an independent person.

3. Agency

After breaking the cage of debt as well as having enough savings to face the odds, in this stage you do whatever you desire, keep in mind to not let your net cash worth be minus again though. Save all you can and try to think as a minimalist while enjoying your life. Predict the amount needed for next year and make a safe account for yourself.

Once you reached your predicted amount of money you’re done with surviving, it’s time to thrive.

4. Security

Security

In this stage you should try as hard as you can. Cause this time you need to observe 5 or 10 years later. Gather all the money you can and be creative and genius. Have enough savings that even when you decided to leave all the jobs you have and become retired, you can maintain an ordinary life for years. You must be able to afford all the basics of a normal life, as food, clothes, insurance and whatever essential.

In this case, develop a wealth machine. This machine is as same as the continuous incomes previously mentioned, earning you greater than the money needed for a minimum life.

There’s a formula telling you that wealth machine providing you a 7 percent rate of return, you can bank 5 percent of your cash flow. Beware not to do damage the amount you earned. It’s all based on what source of income you have, so act creatively.

5. Independence

After gaining enough experience during reaching financial security, now it’s possible to upgrade your wealth machine to the next level. Financial independence is as same as financial security despite the fact that in financial independence, you have the required capability to leave your job behind and have an ideal life for almost 10 years or more! The formula mentioned in financial security works exactly fine in this stage.

6. Freedom and Abundance

Freedom and Abundance

This is the last station of your journey. Continuing the path, you’re headed, using every opportunity you have, you may find yourself having financial freedom. What these 3 last stages imply is wealthier you are, more risk worth to be taken. By taking risks more money will be earned.

Amazingly, you may find yourself in a position you never could imagine of. In this position you may become one of the richest people in your country. You can afford anything you or your loved ones wanted in a blink of an eye and that’s all thanks to your effort you just spent in the path.

The bottom line

However financial abundance sounds out of rich and unachievable, don’t dim the lights of hope. Become the boss of you, try effortlessly, don’t give up on your dreams, be smart, plan a strategy, think as a minimalist and see every opportunity as a priceless diamond, then you find yourself as someone created an unbelievable wealth machine which gifts you the freedom you deserve.

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