Seventh Heaven

Seven steps in seven stages

Author

Cara Spence
September 09, 2023

There are seven days in a week, seven notes in a scale and seven colours in a rainbow. The world consists of seven continents.

Continuing this theme, Carrie Schwab-Pomerantz of 'The Charles Schwab Corporation' identified the seven steps to financial freedom as:

  1. Spend less than you earn.

  2. Have a savings mindset.

  3. Create a rainy-day fund.

  4. Control debt.

  5. Have workplace insurance.

  6. Save for retirement.

  7. Invest.

To help remember these steps I have created the following alliteration…

  • save

  • shield

  • safety-net

  • solvency

  • safeguard

  • secure nest egg

  • stock exchange or similar.

The stage of life you are in will likely be tied to your level of financial freedom. Grant Sabatier wrote a book titled ‘Financial Freedom’ and identified seven stages of financial freedom, namely:

  1. clarity.

  2. self-sufficiency.

  3. breathing room.

  4. stability.

  5. flexibility.

  6. financial independence.

  7. abundance.

At the first stage you are aware that you depend on a third party or parties for financial support. At the second you are solvent and self-sufficient but still living week to week. By the third stage you have accumulated a safety net of funds to keep you afloat but not for long. At the fourth stage you are debt-free and you can get by for about six months with some cash for emergencies.

The fifth stage provides you with enough security that you don’t worry about money regularly. You could take a career break or travel for about a year. The sixth stage is a level of financial freedom that gives you choices about how you spend your time. You are able to live from investment income, often referred to as the 4% rule.

At the final and seventh stage, money is no longer a concern for you and you have enough to support you for life.

It is helpful to identify the stage you are at, to determine how you should optimise your work life welfare in a way that is appropriate to your stage of life.

So, it would seem that $even is the magic number!

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