I’m revisiting the book, MONEY Master the Game: 7 Simple Steps to Financial Freedom, which I first listened to in 2015. One of the most powerful steps in this book is to calculate the five levels of financial freedom:
- Financial Security: the cost of your basic needs (mortgage/rent, food, utilities, transportation, insurance)
- Financial Vitality: add half the cost of some luxuries (clothes, eating out, entertainment, gym membership)
- Financial Independence: the cost of your current lifestyle
- Financial Freedom: add the cost 2-3 significant luxuries (bigger house, dream vacation, boat or vacation home)
- Absolute Financial Freedom: go wild and list everything you would buy if money was no option.
There’s an app (iPhone only) that will walk you through these calculations, and has some videos that explain the levels in greater detail: here.
Once you have these numbers, simply multiply by 20 to get a rough estimate of how much you need to meet these levels without ever working again. Then pick three of them for short, medium, and long-term goals. For me, these are: security, independence, freedom.
If you want to get somewhere, you need to know where you’re going. Calculate, get empowered, and get moving.