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A shaky economy, job uncertainty and rising everyday costs have Americans craving the financial independence that makes money worries a distant memory.<\/p>\n
That might be why so many people are turning to author and personal finance expert Grant Sabatier\u2019s seven-level breakdown for financial freedom.<\/p>\n<\/p>\n
Sabatier\u2019s list is gaining attention because it ladders the distinct levels of wealth people reach on their path to prosperity. Understanding where you stand on the ladder can inform your steps toward the final rung: complete money freedom.<\/p>\n
So, where are you on the ladder, and how can you keep climbing?<\/p>\n
The journey starts by understanding your financial situation \u2014 your income, debts, and savings.<\/p>\n
Today\u2019s high grocery prices and everyday costs make basic living expenses a challenge. But it can be empowering to get an understanding of where you are financially speaking and how much you need to make ends meet. That\u2019s how you build a plan.<\/p>\n
How to climb: Begin by following every dollar\u2019s comings and goings. Budgeting apps like Monarch Money<\/a> can help you track your expenses down to the last penny, helping you figure out where your money is going.<\/p>\n You are probably overpaying for at least one unused subscription, and Monarch Money can help you identify it. According to a survey of 1,106 consumers conducted by Self Financial in 2023, 85.7% of respondents paid for at least one subscription that went totally unused.<\/p>\n Monarch Money’s expense tracking system<\/a> makes managing expenses and debt easier. The platform seamlessly connects all your accounts in one place, giving you a clear view of where you’re overspending.<\/p>\n For a limited time, you can get 50% off your first year with the code MONARCHVIP<\/a>.<\/p>\n At this level, you no longer rely on anyone for financial support and can cover basic expenses. Reaching this stage means you\u2019re paying the rent or mortgage, utilities, and other essentials without accumulating debt.<\/p>\n Living paycheck to paycheck, however, is still considered part of this step. A recent study by MagnifyMoney found that half of Americans are dealing with that reality.<\/p>\n How to climb: It\u2019s important to build an emergency fund with three to six months\u2019 worth of living expenses \u2014 a safety net to protect against lost income or unexpected expenses. It\u2019s also important to minimize lifestyle inflation and keep expenses low as your income grows.<\/p>\n But you don\u2019t need to contribute huge amounts of money to your emergency fund at once. With Acorns<\/a>, you can automatically invest spare change from everyday purchases into a smart portfolio of ETFs.<\/p>\n If you want to handpick your investments, you can opt for Acorns Gold, which allows you to invest in individual stocks.<\/p>\n Plus, get a $20 bonus investment<\/a> when you sign up with Acorns today.<\/p>\n At this level, you\u2019ve escaped the paycheck-to-paycheck cycle. Extra money allows discretionary spending. You\u2019re no longer stressed about covering your monthly bills. Knowing your financial house is in order, you have enough to occasionally indulge in eating out, vacations and other non-essentials.<\/p>\n How to climb: Focus on erasing high-interest debt and increasing your savings rate. Prioritizing where your money goes ensures you\u2019ll continue to build wealth while enjoying the results.<\/p>\n You can do this by consolidating your debt using a personal loan at a preferably lower interest rate. This way, you have to make only one payment every month, easing your interest burden.<\/p>\n Read more: Rich, young Americans are ditching stocks \u2014 here are the alternative assets they’re banking on instead<\/a><\/p>\n At this point, you\u2019ve built a solid foundation. Day-to-day expenses and unforeseen emergencies don\u2019t worry you. This level is about security and knowing that one unexpected bill won\u2019t send you spiraling into debt.<\/p>\n How to climb: Maintain regular contributions to your savings and investments. Make sure you have the appropriate insurance policies (health, life, disability) to protect your assets and income.<\/p>\n While the national average rate on savings accounts is about 0.42% APY, according to the Federal Deposit Insurance Corporation (FDIC), several institutions offer significantly higher returns, up to 10x the median.<\/p>\n For investors looking for reliable, safer investment options with long-term investment horizons, certificates of deposit (CDs) might be suitable. CDs typically offer higher returns compared to traditional savings accounts, but the investment amount remains locked in during the specified period.<\/p>\n You can now take more risks or consider life changes \u2014 like a career change or entrepreneurship \u2014 without fear. Flexibility allows you to follow your passions, knowing your money can handle it.<\/p>\n How to climb: Continue to build diverse income streams and make strategic investments. Real estate, stocks, and side businesses are common ways of building financial flexibility.<\/p>\n To help with growing your portfolio, platforms like Moby<\/a>, founded by former hedge fund analysts, provides stock research and insights tailored for everyday investors.<\/p>\n Over the past four years, Moby\u2019s stock picks<\/a> have outperformed the S&P 500 by an average of 11.95%, helping more than 5 million users identify promising investments before they take off.<\/p>\n At this level, your investments generate enough income to cover your living expenses. Work is optional.<\/p>\n This level is commonly associated with the FIRE (Financial Independence, Retire Early) movement, where investments provide enough income to cover daily costs and allow you to stop working, all while enjoying more control over your time.<\/p>\n How to climb: Maximize contributions to tax-advantaged accounts like 401(k)s and IRAs, and invest in dividend stocks or rental properties to generate passive income. With the stock market\u2019s ups and downs, a well-diversified portfolio is essential for maintaining your financial independence.<\/p>\n First National Realty Partners<\/a> makes it easy for accredited investors to grow their returns through grocery-anchored, necessity-based retail properties, like Walmart, Kroger and Whole Foods.<\/p>\n With a minimum investment of $50,000, accredited investors can potentially collect quarterly cash flow through a diverse real estate portfolio<\/a> \u2013 without the leg work of finding deals yourself, negotiating for mortgage rates or managing the purchasing logistics.<\/p>\n Gold is known for its stability in the face of adverse market conditions or economic downturns. Over the last 10 years, gold prices have risen by over 120%.<\/p>\n One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals<\/a>.<\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.<\/p>\n To learn more, you can get a free information guide that includes details on how to get up to $20,000 in free metals<\/a> on qualifying purchases.<\/p>\n Is this the finish line? Sabatier says the final level finds you with more money than you\u2019ll need, allowing you to live your dream life and give back generously. Whether that means traveling, passion projects, or philanthropic work, abundant wealth allows you to pursue what matters most to you.<\/p>\n How to climb: Focus on wealth preservation through diversified investments and estate planning. Giving, whether through charitable donations or creating a legacy for your family, can also become a priority.<\/p>\n Consulting a financial specialist can help you understand the best ways to make your money work for you.<\/p>\n Finding a financial advisor that suits your specific needs and financial goals is simple with Advisor.com.<\/p>\n Advisor.com<\/a> connects you with vetted fiduciary financial advisors near you. All you have to do is answer a few simple questions about your finances, and Adivsor.com matches you with a short list of certified experts to choose from.<\/p>\n You can then set up an introductory meeting with no obligation to hire<\/a>.<\/p>\n Regardless of where you land in Sabatier\u2019s seven tiers, it\u2019s important to plan for the safe transfer of your wealth to the next generation. Creating a will or trust can help you ensure your loved ones remain protected after your passing.<\/p>\n With Ethos Will & Trust<\/a>, you can create a living trust online from the comfort of your own home in as little as 20 minutes. All documents created on the platform are vetted by experienced estate-planning attorneys \u2014 giving you complete peace of mind.<\/p>\n You can also make unlimited updates forever<\/a> as your life changes, helping you secure your legacy for your loved ones.<\/p>\n You can create a trust starting at just $349<\/a> with Ethos Will & Trust. Plus, if you\u2019re not happy with the results, you can get a full refund within 30 days.<\/p>\n