4 Levels of Financial Independence

Financial Independence

The road to financial independence.

$0 – $75,000

If you are making under $75,000, you may or may not be poor but you are still more than likely to be wondering about money every single day. You may be in debt and/or living paycheck to paycheck if you have a family. It is tough to save and you may be pinching pennies to survive.

$75,000 – $150,000

You are more comfortable and can enjoy more luxuries than before. Your bills are paid and you are stashing money away for retirement and your children’s college education. Vacations are now once or twice per year. Eating out and going to the movies happen more often.


The reason why the bracket is so big is because your life doesn’t change in a big way. You may live in a better house when earning $500,000 versus earning $150,000, but overall your lifestyle is just slightly different. If you smart, you can live like you earn $750,000 per year while only earning $150,000 per year.


Once you are earning $1,000,000+ per year, you can live the life of your dreams for the most part. Unless you are spending uncontrollably, you can save most of your net income over the 1 million. For example, if you earning let’s say $2 million per year, you should be able to save around $500,000 per year.

Financial Independence

However, if you want to acquire substantial wealth without earning $1 million per year, their is an alternative. To build a net worth north of $3 million, you need to own a business. Wealth creation happens through the ownership of entities and not income.

Let’s say you are earning around $100,000 per year and get a new job that pays $250,000 per year. You are excited that you got a higher paying job, but still would like to earn more. So, you decide to quit your new job after six months and instead start your own business. Within 5 years, your business is worth $25 million and you own 80% of the company while paying yourself $200,000 per year. You sell your company for $30 million, receiving $24 million before taxes.

Now, you have achieved financially independence.

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