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6 Financial Levels According to J.D. Roth – Which Level Are You On?

[:en]6 Level Finansial Ala J.D. Roth, Kamu di Level Mana Nih?[:]

Financial freedom is considered the highest financial level. But what exactly does it mean? And why is it so important for everyone? Financial freedom refers to the state where a person has enough passive income to cover their needs and is free from all types of debt.

 

The purpose of identifying financial levels is to understand where you currently stand so you can determine what steps to take to improve your position. Achieving financial freedom means having control over your money rather than letting it control you.

 

According to J.D. Roth, there are six financial levels. Let’s break them down!

 

1. Financial Dependence

 

Financial dependence is when someone relies on others to support their financial needs. Everyone starts at this level, like children who depend on their parents because they don’t have their own income yet.

 

2. Financial Solvency

 

At this level, you have enough income to cover your living expenses, and ideally, you should be able to pay off your debts. To maintain healthy finances, avoid having debt that exceeds 30% of your income.

 

3. Financial Stability

 

At this stage, you can begin to build positive cash flow. Being financially stable means you’re able to save for an emergency fund equivalent to 3-6 months of your expenses (if you’re single). This fund is essential to back you up in case of unexpected emergencies.

 

4. Financial Security

 

If your passive income can cover your short-term needs, you’ve reached financial security. At this level, you can start planning for your retirement.

 

5. Financial Independence

 

This is the level many people dream of reaching. Financial independence means having enough passive income to cover both short-term and long-term needs. To achieve this, you need to invest part of your income wisely so you can eventually secure this financial milestone.

 

6. Financial Abundance

 

The highest level is financial abundance. People at this stage have passive income that exceeds their needs, a robust financial system, and no financial worries. Their wealth is abundant, and they often feel driven to give back and help others.

 


 

So, those are the six financial levels according to J.D. Roth. After reading this, which level do you think you’re on? No matter where you stand, understanding these levels is already a great first step. It helps you plan strategies to move to the next level.

 

Let Ximply help you manage your finances better and reach your goals faster!

 

Source: 6 Level Finansial: Kamu Ada di Urutan Berapa?

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