5 Levels of Wealth AND How to Achieve Them (2026 Edition)

Introduction – The Five Levels of Wealth (0:00)

Brian: We believe there are five levels of wealth, and today we’re going to give you a deep dive on each and every one of them.

Bo: And Brian, I am so excited because so many people aspire to be wealthy, but oftentimes they don’t even know how to benchmark what wealth really is. Well, today we get to take a look at the five levels, help you figure out what level you fall into, and even give you some advice on how you can level up from the level you’re at right now.

Brian: That’s right, Bo. So often we think about wealth as really a math equation, but the behavioral side can be just as important. So you might be asking yourself, what level of wealth are you at? With that, let’s dive right in and find out.

Bo: So Brian, the way that we define wealth is we think about it in five separate levels. And those levels are stability, strategy, security, freedom, and abundance. And similar to Maslow’s hierarchy of needs, you have to pass through one level before you can ultimately rise up and achieve the next level.

Brian: Well, I think this is important because we often say that building wealth is surprisingly simple, but that doesn’t mean it’s easy. And a thing that’s often overlooked is all the mindset stuff. Because I think if everybody could kind of try to figure out which level of wealth am I at so that I can kind of focus on what are the big picture things that I need to be making sure I get right while I’m in each of these different levels so that I can get to the next one that much faster.

Level 1 – Stability (1:28)

Bo: So let’s start with level one. Let’s start at the very beginning. This is the stability level of wealth. And stability basically means that you can pay your bills. It’s that area where you’re not worrying about trying to make ends meet month to month and paycheck to paycheck.

Brian: Yeah, this is the one if you want to know what is stability. It’s the ability that you can pay your bills and live on less than you make. And that’s such a key component that it’s worth repeating: live on less than you make.

Bo: Well, what it does is in this level, you begin to familiarize yourself with and understand and even begin practicing deferred gratification. The idea that I can walk away from a little bit of my money today so that I can have opportunity in the future.

Brian: It’s also a matter of most people fall into bad debt traps and you can see that you’re just not letting those bad debt balances build up and not falling into that thing that catches so many people in the general public.

Bo: So that’s what stability is. Let’s talk about what stability is not. Stability is not income based. We’ve seen people that make $10,000 and are there and we’ve seen people that make $100,000 and are not there. It’s not based off a specific income.

Brian: And sadly, I mean, you think somebody even in their 50s like myself, there’s a lot of people in their 50s that never make it into stability or out of step one because they can’t live on less than they make.

Bo: Yeah. And I think a lot of people fall into this mirage that, oh, okay, so long as I can just afford something, even if I’m just buying it $100 a month at a time, just because you’re doing that and living that kind of lifestyle does not mean that you are actually at the stability stage. It actually means that you’re more than likely faking it.

Brian: Well, yeah. So many banks are out there offering you finance this, finance that. You can afford literally $100, $200 a month. You can have jet skis, you can have cars, you can have trucks, you can have your house, you can have an RV, but you won’t own anything. You will rent your entire life. So that leads to what do you need to do so you can get to level one and even break through to level two is let’s focus on what you can control.

Bo: Yeah. And the very first thing when we think about the levers that we have to pull is our spending. And we want you to really focus on that granularly. How can you know if your money is doing what it’s supposed to be doing if you’re not looking to see where your money is going? And a lot of times people don’t like using this word. But sometimes it’s necessary if you’re going to focus on your spending. One of the best ways to do that is to actually build a budget.

Brian: Yeah. And here’s the thing. When we talk about budgeting, and I’m going to go ahead and just blow this up. We’re not talking about the latte factor. That’s built into this, but it is focusing on those big expenses, too. Like, what are you doing with your house? What are you doing with your food? What are you doing with your car? It’s those type of decisions that really are going to be fine-tuned and let you draw an eye to. And then, of course, what I do like about budgeting is that even after you get the big stuff, then you don’t have to do the latte factor officially where if you enjoy coffee, go get your coffee. But it does let you see where is the money sneaking out in the background that you might not be aware of.

Bo: And if you’re new to this, this is not something you’re familiar with, we have an amazing resource for you. If you go to moneyguy.com, you can check out our budgeting ultimate guide. And it’s going to walk you through things like, okay, who needs to budget and how do you budget? How often should you budget? What resources and apps and tools are available. This is a one-stop place where if you’re brand new to this or you just want to begin to reframe how do I really get my hands around my spending, go check out our ultimate guide. Again, it’s moneyguy.com. Look for our budgeting ultimate guide to walk you through everything you know about being able to control the expense lever in your financial situation.

Brian: Well, you know, as we talked about, whenever you’re trying to live on less than you make, there’s two things you can do. You can either increase your income or you can cut your expenses. We just talked about budgeting for the expenses, but when it comes to your income, this is something where, you know, be honest with yourself. Is there something you can do at your workplace, whether it’s take on more hours, add a new skill set, go create a win-win with your employer, or go work a side hustle of some sort. I’m not trying to create a hustle bro type factor here for you, but it is one of those things where I think you do need to look at your income lever to see how you can maximize it.

Bo: And you’ve already said this, Brian, it’s incredibly simple, but it’s not necessarily easy. So, you do have to, if you want to be serious about this, you have to be willing to make sacrifices and adjustments. You have to be true to yourself and recognize, man, if I’m not exactly where I want to be today, then I must need to do something I’ve never done before to be somewhere I’ve never been before. Be willing to do that and go into it with an open mind and you can change your outcome.

Brian: So let’s talk about mindset now though because I think that this is if we’re talking about level one this is the beginning and so often people will find out about this wonderful world of personal finance and they get excited saying oh my gosh you know maybe you didn’t learn this in school maybe your parents didn’t set the perfect example for you and you get interested in personal finance but I’m worried as you’re at the beginning part of your journey on this level one of wealth a lot of times we focus on the wrong thing I see people just getting busy doing nothing. What I’m talking about there is all these hassle factor things, like don’t try to optimize the 0% credit card transfers and all that. Don’t gamify the credit card rewards where you end up with 12 different credit cards just so you can go on one free vacation one year, and now you’re stuck with this card for years to come. And then don’t worry about just I want you to be good with your money. Don’t mishear us, but you don’t have to focus on doing all these different bending yourself left and right to save on little tiny things if they’re not actually moving the needle and ending up on your net worth.

Bo: Or even worse, people see something on sale, and it’s a good deal, and they feel like they have to purchase it, have to buy it. Just because you think you’re saving does not mean that you’re actually doing what you’re supposed to be doing when it comes to level one. And if you want sort of the big overarching idea, the key to level one is living on less than you make, deferring gratification, moving some of today’s earnings into the future. If you can do that, you’ve mastered level one. And what are some ways that you’ll know you’re doing it right? How will you begin to assess, okay, I’ve mastered this level of wealth? Well, you’ll begin to progress in the financial order of operations, starting with step number one. If you look at your savings account and you’ve lived on less than you’ve made enough to have your deductibles covered, that’s a really good sign that you’re moving in the right direction.

Brian: You’re also now not leaving free money on the table. You’re getting that employer match, making advantage of that. You’re also making sure you are vanquishing and paying off all the high interest debt so that you can actually follow your budget, follow your forced scarcity plan so that your money is ending up on the net worth statement because you’re living on less than you make.

Bo: That’s exactly right. And again, you’re progressing through the financial order of operations. So, you’re also seeing things like your emergency fund is starting to build, it’s starting to now move in the right direction. Brian, you already acknowledged this. High interest debt is now becoming something that is non-existent in your world. If you can answer all of those things in the affirmative and say, “Yes, this accurately describes me,” then that means you’re likely at the spot where now you’re going to move into our second level of wealth. And the second level of wealth is what we call the strategy level.

Level 2 – Strategy (9:04)

Brian: Well, I think a lot of financial mutants are going to be like, “Whoa, y’all spent a lot of time on talking about something that I pretty much as a financial mutant. I got this pretty quick and we kind of count on that living on less than you make is very heavily discipline-focused. But even on moving into level two strategy, this means that you’re now saying, “Okay, I got the basics covered of, you know, living on less than I make. Now, how do I actually turn my army of dollar bills where they’re building wealth?” Because that’s one of the when I think about my beginning journey, one of the aha moments for me, Bo, was realizing that if I could start owning stuff that could work just as hard as I am, that is the key unlock to the long term. And that’s why strategy is the perfect name for this.

Bo: So, let’s talk about what strategy is and what strategy isn’t. First of all, strategy is recognizing that you need to control your paycheck and not letting it control you. You’re no longer waiting for the end of the month trying to make ends meet. You have a plan. That’s what everything I’m trying to do is get you motivated to take an active role in your personal finances. And then strategy is also recognizing that maybe you don’t know everything that you ought to know up to this point. So, you want to increase your financial education. If you’re listening to this podcast, if you’re watching this YouTube video, then you are already taking steps in that direction. And it’s not about knowing everything, but rather continuing to increase your knowledge about making wise financial decisions.

Brian: Well, and since you are now getting in the phase where you’re thinking about and saving and investing and putting your army of dollar bills to work, strategy is not listening to your cousin’s, brother-in-law, uncle, you know, whatever. Because that’s what happens. You go to parties and somebody tells you all their wins and it makes you feel like, hey, I should be doing that with individual stocks or I should be getting into this cryptocurrency. Don’t fall into that trap. There’s a better way to do money.

Bo: Yeah. It’s about not constantly getting caught up in the next thing. Ooh, I got to do crypto today. Ooh, I got to do NFTs. Ooh, I got to go do whatever that next thing is, whatever that next hot topic is in the personal finance world. When you have a strategy, you don’t allow yourself to continue to get distracted and pulled off course by those things.

Brian: Well, I think a lot of people because once again, you’re at the beginning of your journey and this is why we’re trying to move from, you know, just making through the basic survival to where we’re now into this strategy side of things. I don’t want you to get it feels good when you have money in the bank. And as somebody who grew up in a household where my parents only idea of investing was CDs and cash, I don’t want you to fall into that savers trap. You actually at some point need to go beyond just being good with the discipline and living on less than you make and actually put the money to work that’s beyond just cash and savings investments.

Bo: Again, we’ve said this over and over. This is easy. I mean, it’s simple, but it’s not necessarily easy. And we know this from a Fidelity study. They asked Americans aged 18 to 44, do you have a financial plan, a financial strategy in place? And the results of that study suggested that 51% of Americans, over half of Americans, do not pay attention to how much they’re spending or how much they’re saving. What that tells me is that one out of two Americans, over half, have no financial strategy. So, a lot of people need to answer the question, how do I fix this? What do I do? How can I actually get from where I’m at right now, my financial life, to level two of wealth?

Brian: Well, I mean, this is you have to be intentional. I mean, if you read any of the books out there on how to set yourself up for success, like Atomic Habits or other things, they always talk about how if you just are off by one, two, three degrees on your planning and your strategy, you’ll end up you don’t even know where you’ll end up. And a lot of people with their personal finances, they’re rudderless. I mean, they’re literally letting life happen to them. So, you have to be intentional. Start thinking long term. Define what success even is for you.

Bo: When you think about long-term, you begin thinking about what do I want the future to look like? Not just what do I want today to look like? How do I want to make myself happy today? But rather, how can I build a plan that’s going to last me for the rest of my life? And again, begin to educate yourself on what you don’t know. Okay, I heard these guys talk about the FOO. What’s the FOO? Or man, I heard somebody talk about a Roth IRA. What’s a Roth IRA? Or why are credit cards bad? If you can begin to educate yourself and beef up your financial knowledge, some of this stuff will just begin to become second nature to you.

Brian: Well, and look, I don’t want to we’re not skipping steps here, but when we finally get to that final abundance stage, you’re going to start seeing that, man, you need to make sure you’re waking up feeling like you understand your why and what you’re here on this planet for. And so go ahead and even in step two of strategy, if you have a plan and you start doing things that reflect how you view the world and makes you feel good about not only saving for your future, but also just you’re waking up feeling like you have purpose. This is going to help you with your mindset.

Bo: So if we think about how we align that. How do we match being at step two, being at level two, and also our mindset, you want to be careful about doing the wrong things. And again, one of the wrong things we’ve already acknowledged is trying to find the hot dot, trying to find the overnight win, trying to hit the next home run. Rather, we want you focusing on putting a plan in place, a consistent long-term savings plan that gives you the highest probability of long-term success. It’s why we say all the time, Brian, we want folks saving and investing 25% for their future.

Brian: Yeah. And if you want to know why, we have a great resource and deliverable. If you go to moneyguy.com/resources, we actually have the math. It kind of shows you the intersection point. We know most people don’t even start saving and investing for the long term until their mid-30s. And if you go look at our chart and see what 25% can do for you, especially for somebody in their mid-30s, it’s going to be about what you need to be saving. Now, if you’re somebody who’s listening to this and you’re 20 years of age, you might be able to get a lot more by just saving 10 to 15%. So, understand what you need to be doing. That’s another reason to go to moneyguy.com/resources to see how much should you save based upon your age, based upon your income, and based upon what your future goals are.

Bo: Now, I love what you said right there. Understand what you should be doing because again, if you’re at the strategy phase, not only do you want to avoid trying to chase the hot dot, but you also want to prevent yourself from falling in traps, things like this. And we see this all the time. Hey, I’m just going to bump my amortization schedule out a little bit longer. Hey, rather than financing that car over three years, I’m going to do it over five or I’m going to do it over seven. If I do that, I’m going to be able to afford it more and I can go consume more things. If you are doing that, I would argue that you do not have a strategy in place and you are not helping yourself advance through the levels of wealth.

Brian: And mindset-wise, I want to remind you just because I mean a lot of you, you’re making good decisions in the beginning, and you say, “Hey, I want to reward myself. Instead of driving that Honda, that Toyota, you know, if I just go from a three-year term to five, six, seven years, maybe I can get a BMW or something else.” No, don’t fall into those traps. Nobody cares what you’re driving. And then also, don’t fall in the trap, and I hate to repeat this, of getting busy doing nothing. Just because somebody offers you a sign-up bonus where they’ll give you 1% extra if you move all of your assets over, think long-term. Is it worth the hassle factor? Is it worth these things? I want you to be good with your money, but I want you to have more of a long-term mindset.

Bo: So, what is the headline for the strategy level of wealth? It’s have a plan and stick to that plan. Understand what you should be doing and begin doing those things more and not doing the things that you’re not doing. And if you can do that and if you can find yourself in that place, you’re going to begin to recognize, hey, I’m doing things right. I’m moving in the right direction. When you see some of these signs, number one, again, you’re continuing to progress in the financial order of operations. You have knocked out step four. You have a fully funded emergency fund in place.

Brian: Well, I think a lot of people, this is what’s going to be helpful for you is that for most people, you’re going to be in one and two in your 20s and 30s. And I would encourage you if you can give yourself a huge head start while you’re younger and you have the wealth multiplier, meaning every dollar that you can put to work is going to do so much. If you can understand if you can make the good habits as easy as possible and the bad habits that much harder, you’re going to set yourself up for inevitable success. And you know what you do with that? With autopilot. That’s right. Always be buying, forced scarcity. Do these things that we talk about constantly. So you don’t have to waste any of your mental horsepower. You’re inevitably walking towards wealth if you just do these things is much more likely.

Bo: And when you have your bills on autopay and when you have your savings on autopay, you create an environment that becomes really, really difficult to screw up. And one day you’re going to wake up and you’re going to pull out your copy of the financial order of operations. You’re like, “Holy cow, I’m not just doing 1, 2, 3, 4. I’m starting to check boxes four, five, six, and seven. I’m actually in that stage of life where I’m not just making ends meet, but I’m actually beginning to build wealth.” If you want your own copy of the FOO, you can go to moneyguy.com/resources and download your copy to assess where am I at?

Level 3 – Security (18:40)

Bo: And what you might find is as you do this little assessment and as you begin to look at man, okay guys, I’ve made it through the stability stage. And I think I’ve even based on what you said, it sounds like I’ve kind of mastered the strategy stage. That means that you get to move into level three of wealth and that’s the security stage.

Brian: Yeah. And I think this is important. And we’ll talk about this in a minute, but this is for somebody who’s been doing it for a while. I want to caution all of my 20-somethings who are killing it out there in the income game. Just because you’ve started saving and investing doesn’t mean you immediately get to skip steps and go to security. You’re still more than likely in strategy. But for those of you who’ve started building some investment girth underneath you, that base of the triangle is really building up and working for you with your army of dollar bills. This means you’re not sweating the small stuff anymore. This is where I’m hoping. You remember I loved when we were in the previous step of when we were talking about strategy. We said steps four through seven of financial order of operations. What I like about once you get to security, you’re now in that step eight. That’s right. You get to do things a little bit differently, Bo.

Bo: So let’s talk about what security is and what it isn’t. And first of all, security, Brian already said this. You’ve been doing it for long enough that now you’re beginning to see the dividends of your past work. You’re not just trying to get a plan in place, but you’ve been executing that plan for a while and you can see, man, that plan actually works. It’s actually moved me to where I want to be.

Brian: Well, you also you’ve reached that and I know I struggle with it, the boiling. I can’t say the boiling point. It’s gotten to the point I can’t say it. It’s to the point that now your assets you’ve got that financial muscle memory because you’re a financial mutant. The money is working just as hard if not even more than you are. That’s what’s always I remember you know I’ve talked to this is what nerdy stuff people talk about when you’re in your 40s. I’m in my 50s now but I can remember over the last decade talking to some guys in your neighborhood at maybe a cookout or something and especially after a good quarter of investments where the market’s done really well and you’re like, “Holy cow, can you believe we’ve reached a milestone where I think my investment assets made more than I did with my labor, my back, my brain, my hands.” That’s a powerful component when you have your money working just as hard as you are.

Bo: And when you’ve done it for long enough and you do begin to get that girthy base that Brian talked about, you begin to recognize that now you’re not going to be derailed by the unknown unknowns. We all know that there are going to be unknown unknowns that happen in our lives. But when we’re in the security phase of wealth building, we recognize that’s just part of the journey. That’s just part of the process. And even if that thing happens, it’s not going to derail me because I have a plan in place that I’ve been sticking to and I can see the fruits of that labor.

Brian: So let’s talk about what we were talking about with security is. But what security is not is it’s not income or net worth based. What do I mean when we say that? Look, everybody’s different. There might be a teacher who is very good with their reasonable income but because of a pension and because of their discipline they don’t need a huge net worth to be extremely successful. But then we have other people and this is why I want to caution you don’t just say hey I just need to save $3 million. If I hit $3 million it’s going to be all of what I need financially. No it’s not. Your number needs to be tied to all of your goals, your objectives, your mindset, and how you live your financial life.

Bo: And look, this is going to be a little bit of a hot take. So, not only is it not income based or net worth based, in reality, the security level of wealth is not available to most young folks. Even if you are someone who’s way ahead of the curve and you have a huge income and things are going great, if you haven’t been executing your strategy for a while, there’s a chance that you’ve not built up that base. Just because okay, I’ve got stability covered and I’ve got strategy covered does not mean that you’re at security. It takes time. It takes time building those assets, putting that foundation in place before you can actually say that you’re at this level.

Brian: Well, and we’ve done some great mini shows on this, Bo, is that I show that in the first 10 years that you save and invest, the majority of your market value of your assets is your savings. It’s what you put into that investment portfolio. It’s your hard work. It’s only in years 10 through 20 that you start seeing that separation of compounding growth where you actually get more growth than what you’ve initially contributed. And it’s not until you get into that, and that’s why we say this is something that kicks in in your late 30s, early 40s, and even beyond, is that when you start getting to a separation of two, three, fourfold from what you even put in as the contributions or the initial investment. That takes some time, guys. That’s why we’re not trying to put a lid on this for young people. We just want you to stay motivated and let compounding growth because, you know, compounding growth doesn’t work unless you stay consistent and actually let it do its magic secret sauce.

Bo: But again, word of caution, right? So, it’s not available to most young folks, but also security is not financial freedom or abundance. It is the middle ground. It’s the middle ground between I’m at the strategy phase. I have a plan in place and holy cow, I’ve completed my plan. It is that middle ground that you exist in. So, how do you get there? And here’s what often ends up happening at this stage, you feel like you finally have some breathing room, right? Early on in the stability stage things feel tight and you feel like you have to watch every single penny, you have to keep an eye on every single dollar that’s going out. But when you do get into security, I do think this is where a lot of folks that have been doing it right, they get to loosen up and they actually get to enjoy some of their dollars for the present day.

Brian: And what does that look like? It means, look, this is step eight of the financial order of operations. I’m hoping that when you go out to eat now, you’re not so puckered up about what you’re doing. When you choose vacations, you get the guac. Yeah. You get the guac at Chipotle. When you go on vacations, you’re not as panicked about how you’re funding this trip. It is not sweating the small stuff. But don’t mishear us. What we’re saying is I don’t want you to lose the component of discipline. Not at all. Just because you’re still it’s just all your things typically are on autopilot for forced scarcity. So that stuff is working for you behind the scenes so you can not sweat the small stuff. It’s still not disconnected from that key component of discipline and how you live your life.

Bo: So, if I’m at level two of wealth, how do I get to level three? Well, you have to give it time. And giving it time means that you have a plan in place and you’re sticking to that plan. And if you don’t have a plan, let the FOO be the thing. Let the financial order of operations be your guide. We wanted to make this as easy as possible so that when a dollar comes into your possession, you can very clearly articulate what’s the best use of my next dollar. And if you can stick to that plan for a while, you will move from the strategy phase into the security phase.

Brian: And keep an eye on the numbers. Look, what got you here needs to keep being the thing that creates success. I don’t want you to be that person that reaches your 40s and you blow it up through consumption. Because by the way, your success is contingent. There’s a direct correlation to what you spend to what you need to build in the long term. And if all of a sudden, you know, in your 20s and 30s, you’re living a very reasonable life, but then in your 40s, you’re like, “Hey, I heard the guys say, I can live differently now.” No, you still need to have some discipline there. You need to keep an eye on the numbers because your success is connected to the consumption as well as the saving and growth of your investments.

Bo: But also recognize that you don’t need to get derailed trying to rush the process. Don’t think, oh, I’ll show these guys. You don’t think I can be at security while I’m young? I’m going to go put all of my money in XYZ stock or XYZ crypto. There’s a process. There’s a plan. There’s a strategy. Stick to it. It’s okay if it takes time to get there because it’s supposed to take time to get there. That’s what building wealth, the highest probability of building wealth actually looks like.

Brian: Yeah. I want to talk about a cautionary thing that I see when you reach level three for my financial mutants because look, there’s a lot of good that comes from being disciplined and being a financial mutant. But I want to warn you to be careful with your mindset. The things that got you and were so helpful in your 20s and 30s of being tight, living on less than you made, they can, if you’re not aware of it, create a lot of anxiety as well as relationship issues. And what I mean by that is like if you’re sweating little tiny consumption decisions when you have a seven figure portfolio, what are we doing here? This is why we tell you we work on not only the mathematics but also the mindset. And if you’re making your spouse give you every receipt for every transaction and it’s creating strife and friction in the relationship, pay attention to that. If you’re looking at every one of your investment accounts every day, look, I talk about this all the time with net worths. In the beginning, it makes sense just like a toddler or a baby is not potty trained, so you have to change diapers and stuff. You’re going to have to update what’s going on for your life financially because your life is just financially not mature enough to take care of itself. But if you’re doing that same behavior when you’re driving such a big force and you’re doing net worth statements weekly or monthly and you’re just focusing on all these little things instead of letting your life grow with the success you’ve had, I think you might be missing out on some key components of the reward of being a financial mutant and building the security level.

Bo: Yeah. So, what’s the headline in the security level of wealth is to trust the process. You have a good plan in place and that plan should be good no matter what life throws at you. So, if you can just trust the process and implement the plan, then you’re likely going to end up where you want to be. So, what are some signs that you know you’re doing it right? Well, now you’re not only just thinking about, okay, how much am I saving today? How much am I saving for the future? What does financial independence look like? You’re also thinking about, okay, what are some future expenses I have? What are those step eight things that I want to start thinking about? Maybe that’s college, my kids going to college. Maybe that’s upgrading lifestyle. Maybe that’s buying that second home. Whatever that thing may be for you, now you’re able to start putting some attention and some dollars to those things.

Brian: And there’s two big things I resemble both of these is that once you get over age 45, you can start paying down that even that low interest debt because when you get into step nine of the financial order of operations, it’s not all about just the arbitrage. Bo and I have had a lot of debates about that, especially if you got a mortgage that’s sub 3%. But you are at the age once you’re 45 and older. It’s also about kind of paying off the debt, de-risking your life for the long term because you’ve made a lot of good decisions that first 20 plus years that you’ve been out there in the workforce. It’s okay if you don’t have to maximize anymore. You’re taking a little bit off the table.

Bo: And then you also might begin to see a little bit of luxury in your life. Maybe this is when you upgrade the home. Maybe this is when you upgrade the house, upgrade the car, upgrade the vacation, whatever that thing may be for you. It’s okay to begin doing that in the security phase. So long as those ideas and decisions do not derail you from moving to the next level of wealth.

Level 4 – Freedom (30:20)

Bo: Because once you pass through security, you hit the fourth level of wealth. And this is the one that in our opinion most people aspire and strive to achieve. And we call this the freedom level. And this is that point where you’ve actually reached the stage where your money now works even harder than you do.

Brian: Yeah. This is financial independence. This is like I said, this is what most people are aspiring to. You do what you want, when you want, how you want. And that’s what we really think that this is where, you know, a lot of you when people ask you, especially if you’re in your 20s and 30s, what are you striving for by your saving and investing? You’re looking for freedom.

Bo: Yeah. You now have the ability to not just pay for your current self, but you also have the ability to pay for your future self without having to work anymore. Your past working self, your past building self has done all the hard work to provide for today as well as provide for tomorrow.

Brian: And let’s talk about what freedom is not because I resemble this is that I want you to look, I want you to have financial independence. I want you to have enough money in the bank to where your future is kind of locked in. But you don’t have to necessarily stop working if you don’t want to. I mean, I hope you guys will continue to let me create content for another 20 years. So, I don’t want you. It’s financial freedom. It doesn’t gives you options. It doesn’t mean that we have to put you in a box and say, “Hey, now you’re going to go sit on a beach for the next 30 years.” You can do that, too, by the way.

Bo: You can, but you don’t have to. And financial freedom is not something that’s easy or it’s not something that’s obtained overnight. If it were easy, everybody would do it. And we know that a lot of folks don’t ever actually achieve this because it takes time and it takes discipline and it takes hard work. But if you’re willing to put those things in, you can make it to financial freedom. But it’s not going to be something that happens tomorrow. And that’s okay. It’s not supposed to be.

Brian: Well, I want to talk about because I feel like I’m the cautionary tale here of reminding people on the mindset stuff is that there’s a big difference between a financial mutant and a financial miser. If you’re undercutting your experiences. I mean, because you don’t get to take this money with you guys. So, this is something if you’re sacrificing because here’s the thing I see all the time is people when you’re making a great income, you’re like, man, I don’t want to take a vacation or take time off because you realize if I just worked or built during that period, do you know how much more money? What does it matter? So when your bill rate is, you know, hundreds of dollars an hour, it’s still at the end of the time. This is where it’s not what you have on the net worth statement. It’s about the blossoming memories that you’re also building your life to create relationships to create happiness, and owning your time and doing things on your terms.

Bo: Well, I think the headline when you get to financial freedom, when you get to financial independence, is you recognize money is not a goal. It’s a tool. And what you’ve done is you’ve now filled up your toolbox. You’ve filled up your tool belt, and you’re now at the place where you can begin to use your money to accomplish all those goals that you had in life. Whether that is creating memories or buying back time or creating experiences or supporting your loved ones, whatever that thing may be at this stage, you recognize money is a tool that allows you to do that. So, how will you know that you’ve done it right? How will you know that in financial freedom, you’re where you’re supposed to be? Well, the first thing you’ve likely done is you’ve stress tested your plan. You said, “Okay, I saved up. I knew what my number was. I got to my number, and I know that no matter what the market throws at me, no matter what the economy throws at me, no matter what unknown unknowns come my way, I know that I have a high probability of success for my army of dollar bills to provide for me for the remainder of my life.”

Brian: Well, and look, if we always try to give you a roadmap or something to look at. Go check out our Money Guy guide to retirement. If you go to moneyguy.com/resources, we’re going to give you some things that you need to be thinking about and working on. And then I want to just tell everybody from a cautionary standpoint, the way you do the key things that got you here probably will start evolving as you’ve had this level of success and financial freedom. You know, when you retire, when you go from working to now you’re living off these assets, your cash reserves is going to change. The way you give to charities is likely with success is going to change. Don’t sleep on the fact that you are entering a new phase of life. So, a lot of the things you need to be doing in your financial life will change.

Level 5 – Abundance (34:53)

Bo: So, we’ve already acknowledged that financial freedom is the level of wealth that most people aspire to. And we read the books and check out the blog articles. That’s the thing that people point to. We actually think there’s a level of wealth one step above that. Even once you pass financial freedom, there’s a higher level of wealth. And we call this level, level five, abundance.

Brian: Yeah. This is you’re beyond money. I mean, just because this is why I don’t think many people will reach the abundance phase is because so many Americans can’t even get to financial independence. So, a lot of you are like, well, why even have this fifth level? And I’ll just lay it out for you is that I think this is what you should aspire to with your money is because this means that you’re not just focusing on do what I want, when I want, and how I want. You’re actually focusing on the mindset of knowing who you are, what you value, what brings you purpose. And guys, a lot of you, you’re watching this and you’re maybe in level you’re in stage one, you’re in stage two on those different levels and you’re like, “Well, how does this abundance apply to me?” I want you to recognize you can apply these same things. You need to on your journey through the five levels of wealth, you need to be focusing on who you are. Meaning, what do you get value out of in this world? What are the things that you get purpose when you’re actually doing these things? That way you can file mentally away. This is what gives me purpose and makes me feel like this is the why that makes things important. Now what you’re missing is the treasure, the capital that puts you in the abundance. But it doesn’t mean that you can’t go ahead and lock this stuff in from a mindset standpoint.

Bo: Another thing that abundance is is it’s having enough. Abundance is that level where you realize it’s not about moving the goalpost. It’s not about having the bigger account, the bigger house, the bigger car, the whatever that may be. You’ve recognized that money is a tool and it allows you to accomplish the goals in life that you have and enough is enough. But even saying that abundance is not a specific dollar amount. Some people will reach the abundance level of wealth at a million dollars and some people might get to $10 million and they might not actually be at the abundance level. And it’s not about hitting checkboxes. It’s not just about accomplishing specific financial goals. I want this net worth or I want this whatever that thing may be. It’s more about really getting into the core of who you are and what your purpose is and how you can use your dollars and use your wealth to accomplish that purpose.

Brian: Yeah. And I feel like we’ve worked this out in a unique way where the timing always lands on me with these mindset things. I’m in this phase now of my life. And what gives me purpose is like we had three new employees start on Monday and they were even in our live recording this morning. I love I think of how many houses were bought last year, how many babies were born. I mean there’s a lot of things that I feel like in this phase that it’s beyond the money that I need to do this for myself. It’s now gotten into what the name is so aptly named with abundance. And it’s allowed me really to tap into the why. And I want to encourage you guys because owning your time, knowing what brings you value and what gives you purpose is going to be very, very important from a mindset standpoint. Like I said, I know a lot of you might not reach or be in the abundance stage now. But that doesn’t mean that you can’t start aspiring to understand these things about yourself so you can maximize this tool of money to make sure you can control what it is and what it’s not. And that probably leads to a great point of saying, and this is the key takeaway to level five is begin with the end in mind.

Bo: If you can have that approach, even if you’re not at the abundance level of wealth, maybe you’re still at the very beginning, level one, level two, level three, that’s okay. You can now apply this headline. What is the life that you want to live? What do you want your future self to look like? What do you want to say if you could fast-forward 50 years in the future and look back? If you can approach the way you make your financial decisions with that mindset, you’re going to set yourself up with a much higher probability of being able to get to the abundance level of wealth. So, what are some signs that you’re doing it right? How will you know if you are at this level? Well, you now have a sense of contentment and satisfaction. You recognize, man, this has been from a financial standpoint a life well-lived, and I’m happy with where I’m at right now.

Brian: Well, I like that you get to focus on what you love and what you want to do. So much in your early life you’re kind of forced to do things because you have to go work. You know, somebody tells you what you have to use your time to do. I like when you reach this abundance, you do things on your terms and so you can say no. You can allocate your time. You can allocate your money in ways that make you happy. And it allows you to kind of prioritize and do the things that let you wake up in the morning and put your foot out of bed and feel like you’re making the world a better place.

Closing – Assess Your Level (39:58)

Bo: Yeah. True wealth is the freedom to focus on what truly matters. You have to define what that means for you. And one of the things you can do is we hope that you use these five levels to assess, okay, where am I at today? Where do I ultimately want to be in the future? And what steps should I be taking to move from my current level of wealth into the next level.

Brian: I love the shows when we do the milestones that have all the math tied into it. I love that. But it is important, Bo, that I’m glad we get to do shows like the five levels of wealth so we can really put a big lean into the mindset because guys, you do need to be taking this self-assessment of where am I at in this journey? Because every stage is going to have kind of a sweetness as well as struggles that you’ll have. And that’s why it’s important begin with the end in mind of doing the work, taking an active role in your financial life. And a lot of you guys once you reach that level four, even three, four, and five, you’re going to say, these guys gave me so much free advice. I didn’t prepare to have this much level of success because even though this was simple things that created this success, it’s not going to be necessarily uncomplicated because your tax returns are going to get complicated. Your retirement decisions are going to get complicated. And guess what? We’re going to leave the porch light on for you. And hopefully you’re going to remember who planted all those seeds and nuggets of knowledge to help you be the better version of yourself financially. And that’s where we hope that you’ll consider taking the relationship to the next level and becoming a client of Abound Wealth. Guys, I’m your host Brian joined by Bo, the rest of the Money Guy team. Money Guy team, out!