Name: 10個層次的財務獨立和提前退休｜如何提前退休？ (10 Levels of Financial Independence And Early Retirement | How to Retire Early)
Uploaded: 2021-01-14T08:43:31.000Z
Duration: 22 min 12 s
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頻率副詞

Long-term financial goals can sometimes seem so big that they feel almost unattainable

動名詞

especially when we're just getting started on our road to financial independence.

基礎數量詞

I and many others like me in the financially independent, retired early community have

found it helpful to break down the goal of becoming financially independent into smaller

and more manageable levels of financial independence.

Not only because it makes it easier for us to track our progress, which in turns helps

us to stay motivated throughout the process, but also because it helps us get over that

initial hurdle of starting to chip away at this mountain of a task.

In today's video, I'm going to take you through what I consider to be the 10 levels

of financial independence as well as give an example on how to go from the first level

Hey everyone Daniel here and welcome to Next Level Life a channel where you can learn about

Investing, debt, retirement, and many other general financial education videos because

the school's aren't going to do it for us.

So if any of those topics sound interesting to you or if you want to learn how to better

handle your money and have more financial freedom be sure to hit that subscribe button

and the bell next to my name to be notified every time I upload a video.

And if you want to further support the growth of this channel you can check out some of

the links I've left down in the description below which includes a 30-day free trial of

Audible and 2 free audiobooks of your choice as well as a list of some books on money I'd

recommend checking out, or you can share this video with a friend, and leave a comment below

letting me know what topics you'd like me to cover in future videos.

Now obviously these ideas of the levels of financial independence are not solely my own

nor are they very new as there are many articles and blog posts that have covered this topic

So consider this more of a summary of many of the ideas expressed in those articles and

if you want to learn more about the topic feel free to check out some of the articles

With that out of the way, let's get started.

Okay so real quick the 10 levels of financial Independence are Level 0 Financial dependence,

level 1 Financial solvency, level 2 Financial stability, level 3 debt Freedom, level four

coasting Financial Independence (also sometimes known as freedom from employer), level 5 Financial

Security, level six Financial flexibility, level 7 Financial independence, level eight

Financial Freedom, and finally level 9 Financial abundance.

The levels are usually defined as something like the following:

Level 0 - Financial dependency is when your debt payments and other living expenses are

This means that you are in one way or another dependent on someone or something else to

help you pay for your bills or if you happen to be a kid and don't actually have any bills

you need someone else, usually your parents, to pay to put food on the table and keep the

lights on and have a roof over your head.

This is the level that all of us start out on and it is referred to as level 0 because

as a financial dependent you obviously have no Financial Independence.

Level 1 - Financial solvency is when you are current on all your debt payments and you

can meet your financial commitments and your other living expenses without any outside

Level 2 - Financial stability is usually defined as when you have built some sort of emergency

fund in addition to being financially solvent.

Level 3 - Is again debt freedom and it's defined differently depending on who you ask.

For some, it is being completely debt-free, mortgage and everything.

For others, it's being just free of the high-interest debts like credit cards but you still might

have a mortgage or other debts like student loans.

And for some others, it is paying off all of your debts except for the mortgage but

your credit cards and student loans or car loans all that stuff is all paid off.

Level 4 - Coasting Financial Independence also sometimes known as freedom from the employer,

Barista Financial Independence, or Agency in blogs and other mediums.

I personally like the idea of it being coasting Financial Independence so that's what I'm

going to be using in this video but know that some people refer to it by one of those other

You have reached the level of coasting Financial Independence when you could, if you wanted

to, step down from a job that may be higher-paying but may also be either less satisfying or

more stressful or both into a new job that is lower paying but more enjoyable or less

This is because in the early years of your career or just thought most recent years you

have managed to save a very decent sum of money that would be able to provide for the

later years of your retirement after it has grown even if you don't put much more in.

Therefore all you need to do is make enough money to get you to age 60 or 65 or 70 or

whatever your numbers work out to be when that amount of money you've already invested

will be able to fund your lifestyle because it's been given enough time to grow.

So in a sense, you've worked really really hard and been very frugal in the first few

years so that you can coast into your retirement.

I have gone into more detail on the various types of financial Independence in a previous

video which I'll leave Linked In the description if you're interested in learning more.

Level 5 - Financial Security is effectively when your cash flow from wealth such as you

are investments has grown to large enough that it can provide for your annual basic

Now I say survival expenses because I do differentiate that from living expenses survival expenses

are just the basic things you need to survive Food, Water, Shelter, some form of transportation,

This does not include things like Netflix subscriptions or cable bills or things like

So this may not be exactly the ideal spot to retire and I certainly wouldn't want to

retire at this point but it is an important level to keep in mind because it does give

If you were to get fired today and you were on level 5 you would be okay you could survive

This is essentially the first level that really gives you I guess that piece of mind even

if the lifestyle should you have chosen to live it may not be the most lavish.

Level 6 - Financial flexibility is similar to Financial Security just one step up.

It is when you have the ability to live off of your current cash flow from your wealth

assuming that you have a flexible spending plan that adjusts for up and downs in the

So if the markets up 20% one year you're able to spend a little bit more but if the market

is down 20% the next year then you don't spend quite as much.

I've seen it defined many different ways so it could vary depending on who you ask,

but the one that I personally like the most is that it is roughly half of your full financial

independence goal, or roughly about 12.5x your current annual expenses if you follow

the 4% rule to get an idea of how much money you need to retire like I've explained in

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10個層次的財務獨立和提前退休｜如何提前退休？ (10 Levels of Financial Independence And Early Retirement | How to Retire Early)

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