Contextual Levels Of Net Worth

Question 1

Financial Stability

You can pay your bills.

Answer 1

Challenge: Living paycheck to paycheck/carrying credit card debt

Success: Develop the habit of saving and paying off bad debt

Question 2

Financial Strategy

You’ve saved your cash reserves, now what?

Answer 2

Challenge: Are you saving 15% or more or your income for retirement?

Success: You’re saving 20-25% toward future goals and putting the savings on auto pilot.

Question 3

Financial Security

You feel your financial strategy and life is in a good place.

Answer 3

Challenge: Overindulging and living beyond your means.

Success: You can spend money on small unnecessary expenses without worrying about it.

Question 4

Financial Freedom

You can do what you want, when you want, and how you want.

Answer 4

Challenge: Make sure your retirement savings are enough to support the lifestyle you envision for yourself. Why do you work? What are you retiring to?
Success: You can cover cash flow needs, be your own boss, live with flexibility. (Millionaire Next Door - Net Worth = ages > 40 (age x income / 10) x 2

Question 5

Financial Abundance

Money doesn’t restrict you anymore. You can decided what kind of purpose and legacy you want to leave.

Answer 5

Challenge: Don’t wait until you get to this level to build experiences and memories.

Success: You’re concerned about the quality of the experience over the cost. How can you make the world a better place? How will you use your financial abundance for good?