Is anyone here financially independent?

[Nahm]

@outlandish Nice.

[7thLetter]

@outlandish I wouldn’t say that there’s different “stages” of financial independence, but there are different ways of being financially independent, or getting to financial independence.

What you presented there is pretty much just the cashflow quadrant from the book “Rich Dad Poor Dad.” Which basically just talks about the different sources of earning income and how beneficial one or the other is. I’ll attach a photo of what it looks like.

But basically what I mean by financial independence is creating your own source of income and being able to live off of it without relying on an employer.

Here, I’ll put the cashflow quadrant photo here. And I consider that anyone who is NOT an employee and earns a liveable amount of money from the 3 different sources of income, are financially independent.

 

[non_nothing]

12 hours ago, outlandish said:

I propose that there are different stages to Financial Independence:

Stage 0: Dependent. No financial independence, completely dependent on a provider for livelihood. Examples include children, developmentally challenged being cared for by social systems, prisoners.

Stage 1: Employee. Participating in the workforce and economy as an employee, earning own livelihood via wage/salary/commissions. At this stage you are completely able to provide for yourself and your dependents' livelihood, via your earnings. You work for a company, you are an employee.

Stage 2:  Self-Employed. Solo entrepreneur/consultant/business owner. You own your business, you call your own shots and control the direction of your enterprise. You have multiple clients, and no employees.

Stage 3: Employer. You own a business that employs others. You're running the show, but your business has some independence and possibility of portability from you. Your business is probably incorporated.

Stage 4: Investor. You own property, stock, intellectual property and are able to survive purely and permanently off of passive revenue sources such as rents, dividends, royalties.

There are grey areas between these stages; a young adult living at home and working part time, going to school might be between 0 and 1. They stages are not necessarily linear; a common pattern is to  be Stage 1 almost their entire life, but be buying stocks and bonds on the side, and retire at stage 4. One stage isn't "better" than another; Stage 4 isn't necessarily the goal for instance. 

What do you think of this as a model? I just made this up, so I'm probably missing things.

My face when I'm 0.5

 

[outlandish]

16 hours ago, 7thLetter said:

What you presented there is pretty much just the cashflow quadrant from the book “Rich Dad Poor Dad.” Which basically just talks about the different sources of earning income and how beneficial one or the other is. I’ll attach a photo of what it looks like.

I've actually skimmed that book a long time ago, so I'm realizing I probably regurgitated that from the depths of my brain thinking it was my own original thought  Either that or it's a self-evident pattern.