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STAGES of Financial Prosperity

♦️ SURVIVAL = People in this mode :
☔︎ Carry balances on their credit cards
☔︎ Face threats of collections & service shut-down
☔︎ Feel regret & remorse (shame) about past financial decisions
☔︎ Feel powerless to & resigned about catching up
☔︎ Owe back taxes / credit cards….
☔︎ Obsess, yet avoid dealing with their money
☔︎ Spend a lot of energy moving money around (“$F Coach”)

♦️ Stability = At this level it’s not having to worry about paying bills because you know you’ll have the money. Being debt-free with savings for future goals, including enough to cover emergencies (60%) . The other 40% of Americans struggle to cover basic needs.
You  have :
💚 enough understanding of monthly / annual earning & spending
💚 insurance: health, home, car, life, long-term care
💚 6 months of living expenses in safety net savings account
💚 regular contributions to retirement  (Chart)

Traps to Avoid :
☁︎ tunnel vision, only focusing on monthly payments
☁︎ ignore building an emergency fund. Make sure your deductibles are covered.
Indicators of Success :
♥︎ develop the habit of saving money, & eradicate credit card debt
♥︎ don’t be afraid to cut back, consolidate expenses, & be savvy about how you spend. Even if starting small, these habits will take you to the next level & give peace of mind.

♦️ STRATEGY = Only 16% of Americans save more than 15% of their income each year.  Plan beyond simple cash reserves – make sure your money is working for you with investment like Roth IRAs & 401(K)s.
Traps to Avoid – NOT:
☁︎ have saving of at least 15% of your income
☁︎ regularly saving for retirement – consider where your money is housed & take advantage of compounding interest
Indicators of Success :
♥︎ saving 20-25% toward your future goals
♥︎ automating your financial life as much as possible
♥︎ tracking your net worth each year.

♦️ FREEDOM = enough positive cash flow to generate passive income to sustain your current lifestyle.
It’s living within your means, ensuring money is spent on things you need (food, shelter, vacations, or relaxation). Not about being rich – the focus is on having enough residual income to spend precious time doing what you love.
Traps to Avoid :
☁︎ about retiring – be honest about the “why” behind your work/career, & know what you’re retiring to
☁︎ don’t assume your retirement savings are enough to support the lifestyle you picture. Make sure your math is right.
Indicators of Success – YOU :
♥︎ know your “army of dollar bills” has worked hard enough to cover cash flow needs
♥︎ can live the American dream of being your own boss with more flexibility
♥︎ should have a net worth double the number in the formula (age x income / 10)  from The Millionaire Next Door formula

♦️ SECURITY  – enough investments or assets to generate passive income to cover basic expenses. It’s challenging  – besides making a thorough plan, you must also be persistent until you achieve  it.
Traps to Avoid:
☁︎ overindulging, causing you to slip into financial problems, & takes the novelty out of special purchases
☁︎ watch out for lifestyle creep, & not living within your means Indicators of Success :
♥︎ able to spend money on small, unnecessary expenses without worrying, like Starbucks most mornings
♥︎ realize you have margin for some of your bucket list items

♦️ WEALTH = an abundance of valuable possessions or money
YOU :
💚 ensure that everyone in your family, across generations, is on the same page. Re. family money, you have some personal finance accounting skills, OR
💚 hand over taxes to a strategist or beloved/ successful CPA
💚 have a will, a living will & a medical power of attorney
💚 hire a certified financial planner, work with an investment advisor
💚 know the details of your entire estate, including inheritance
💚 strategize for periodic income: bonuses, commission, gifts, reimbursements & tax refunds
💚 understand your parents’ wills & are clear about their end-of-life wishes

♦️ AFFLUENCE = leveraging ones wealth, using money to grow more.
You have access to services, savings, investments, tax & business loopholes, & outright wealth accumulation that other people don’t.  AND you have an extraordinary opportunity & responsibility to channel this flow of energy for good.

The danger is excess – unhealthy or unconscious relationship with money from outsourcing, overdoing & overwhelm.
Some pitfall :
☁︎ entitlement that harms personal & professional relationships
☁︎ loss of contact with simple, natural, connected & meaningful experiences
☁︎ severe loneliness, not part of ‘normal people’, isolation
☁︎ too much stuff, too many houses….. that can’t be used

NEXT : MM – Archetypes, #1