I get asked for a lot of financial advice and as you would expect, some questions are easy and sometimes difficult to answer. Sometimes, the saver with the input raises questions, such as, I have x amount, so what should I do with it. Sometimes it’s about output—I need x amount in five years, so what do I need to do to make it happen? Sometimes it combines the two. These are all fine and are quite well established and sensible ways to select a solution.

The hardest questions are those where you can only show the other person how to deduce your own answer, as the answer is different for everyone. There’s one question that always falls into this tough category: “How do I achieve financial freedom?” At first it looks like a vague term, even though it refers to almost exactly the same thing for everyone: Financial Freedom That means never worrying about money, and knowing it with a high degree of confidence.

This is probably always the dream of most people but it seems that it has become more common to articulate it. Since the burden of daily earning dominates our lives, a lasting relief from this is the freedom most of us desire. There are many degrees of financial freedom, and the last person doesn’t have to work for a lifetime to earn money. Of course, there are many who don’t have to work. There are people who have a huge legacy, and there are others whose burden we taxpayers are committed to carrying all our lives, but it takes an entire working life for most of us to reach that level. If we ever reach that.

However, it is worth clarifying exactly what the different levels of financial freedom mean. Based on what several authors have written, here’s a list of what you’ll often find when you start searching the Internet. It is based on Grant Sabatier’s book, Financial Freedom: A Proven Path to All the Money You Will Ever Need.

level of financial independence

1. Clarity: When You Understand Your Financial Situation and What You Can Achieve
2. Independence: When you earn enough money to meet your expenses on your own
3. breathing room: When You Avoid Living Paycheck to Paycheck
4. Stability: When you have six months of living expenses paid and no consumer debt
5. Flexibility: When you have at least two years of living expenses left
6. Financial Freedom: when you can stay away from yourself Investment income, and therefore, working is optional
7. abundant wealth: Clearly, there’s a little padding when you have more money than you need.

Obviously, there’s a little bit of padding here, just to get to the number seven. However, as you read through the levels, you will pretty much agree on the general progress of the idea. Furthermore, the first step – which is all about understanding and introspection – is actually very important. Some of us will realistically think about reaching the highest level as we read through the list, but that doesn’t mean it’s useless to systematically think about financial freedom.

The simple fact is that if we save and invest with a little bit of planning, some degree of financial independence can be achieved earlier in life, and it can be just as good as achieving a higher level later in life. Is. Moreover, as the Indian economy has changed, it has become even more important. India is clearly going through a Jobs Difficulty. There are many people in the urban middle class who have suddenly lost their jobs. Young people are finding it difficult to find their first job, or find low-quality employment. Middle level executives are being removed from their employment because employers think they can be replaced at low cost.

For wage earners, achieving even a mild form of financial independence early in life is now more important than it was a decade or two ago. If one can reach level four by age 35 or level five can reach 40, that’s a great thing. I’m not going to go into the mechanics of doing it – that’s what I do most of the time – but I’m just pointing out the great value of thinking systematically about it, setting goals, and working towards it.

(The writer is CEO, Value Research)