The 7 Levels of Financial Freedom

The 7 Levels of Financial Freedom | When Can I Retire?

Рет қаралды 44,890

Күн бұрын

[The 7 Levels of Financial Freedom⛱ My Book: Retire Before Mom and Dad: amzn.to/2Mt2RBx Click "Show More" to see Ad Disclosure
Financial Freedom Spreadsheet: docs.google.com/spreadsheets/...
Networthify: networthify.com/calculator/ea...
Tools & Resources
📚 My Book (of course): amzn.to/2MsRJ9B
💰 Personal Capital: go.robberger.com/empower/yt-
🏦 Checking accounts: www.allcards.com/best-checkin...
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✅ Free Investment Tracking Spreadsheet: docs.google.com/spreadsheets/...
0:00 Financial Freedom
3:08 Financial Freedom Spreadsheet
5:51 Level 1
9:00 Level 2
13:18 Level 3
13:52 Level 4
14:58 Level 5
17:05 Level 6
17:58 Level 7
23:30 Tool Time--Networthify
In today's episode, I'm going to walk you through the seven levels of financial freedom. When you think about a retirement goal, particularly if you're in your 20s or 30s, it's something that's way out there, right. It's something that's decades away 40 or50 years, depending on your age, and it sometimes can be really hard to sacrifice today and to save for something that might happen, you know, four decades from now. But when you think about it in terms of financial freedom, I think there are two mental shifts that happen that are really important. The first is, you realize that there's more value in money than just spending it. The second thing that changes is you're no longer just focused on something 40 years from now. When you're focused on financial freedom, you can begin to see the benefits of it almost immediately. You don't have to wait 40 or 50 years to get some of the benefits of financial freedom. So I like to think of think of it in terms of financial freedom rather than retirement. Yes, retirements one of the goals, one of the things you can do with financial freedom. But it's not the only thing. And in fact, I could retire now, but I'm not working. And right now I'm behind in front of the camera talking to you. But I still have great benefits from the financial freedom that we've achieved. Alright, enough chitchat, let's get to the spreadsheet. And then after that Tool Time, where I'm going to show you, in this case, a financial freedom or early retirement calculator that I think is kind of neat. So let me show you my screen.
#financialfreedom #retirement #earlyretirement
ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (amzn.to/3by10EE)
LET'S CONNECT
KZfaq: / @rob_berger
Facebook: / financialfreedomguy
Twitter: / robert_a_berger
DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase and/or subscribe. However, I only recommend products or services that (1) I believe in and (2) would recommend to my own mom.

Пікірлер: 52

@sherrybee7790 Жыл бұрын

Just recently bought your book. I am 48yrs old and wish I had this information 1 decade ago. I had never thought about financial freedom much more retiring early. You book is clear, concise and funny (I have chuckled a few times) I plan on buying a few for a few ppl in my life. I am a new subscriber and you get me excited about retiring.

@RoadtoFIRE 3 жыл бұрын

Love that you said the goal is financial freedom not necessary debt freedom.

@Jayydubbz761 3 жыл бұрын

In my 20's, looks like I'm just about on the cusp of hitting that exponential growth. Excited to see that. Great vid as always Rob! keep it up

@Retired-jr3qs 3 жыл бұрын

Rob I've been following you since your dough roller podcast days. I retired at 56 years old and relocated to North Carolina. I also purchased your book on Audible. Retirement is awesome.

@Diomedes01 3 жыл бұрын

Congrats! I am planning to retire sometime between 52-55. My father retired at 58 and now just turned 83 and is still doing great. He attributes his longevity to a good lifestyle but also retiring early. I hope to follow in his footsteps.

@ericairwaterfire Жыл бұрын

You're doing the world a great service, Rob. Thank you!

@ghassanelkurdi7275 3 жыл бұрын

Another great video. Thanks Rob

@hugochka 2 жыл бұрын

Very inspiring Rob. Thank you!

@_Oilspill_ 2 жыл бұрын

Great video, thank you for sharing your knowledge.

@SurpriseMeJT 3 жыл бұрын

I think the other term for being near financial independence is having the "FU fund".

@tdn8247 Жыл бұрын

New subscriber here. Thank you for sharing this spreadsheet and providing your gained insights.

@msnrsn 2 жыл бұрын

This is so helpful. Thank you

@yanmamabear5734 3 жыл бұрын

Love this tool. Thank you

@55eco 3 жыл бұрын

Thanks Rob. You could append a copy to the end of the spreadsheet URL (remove 'edit' first) and then it's easier to just make a copy.

@eldogg4life 3 жыл бұрын

Great video!!!!

@mikeroyce8926 2 жыл бұрын

Rob, Thank you so much for your book. I think your book is great., Even though I am in the UK and we have workplace pensions and SIPPs and ISAs (so i have to translate from 401(k)s, IRAs and Roth IRAs), i think your book is the most helpful book I've read to help achieve financial freedom. I love your concept of the 7 Levels of Wealth, as it gives people "shorter term" targets to aim for. In the video you suggest that equity in the home will improve the situation/bring forward the financial freedom date [18:57 "we not factoring in home equity"], but I assume this is only true if I manage to extract the equity from my home (eg by downsizing to a lower value home), otherwise equity in the home cannot be used to provide income. Here are my questions: Q1 Am I right to assume that if I use 4% as my chosen withdrawal rate, and I want to live off $40,000 per year that I my $1 million pot needs to be in "investable savings", Q2 In this case do you agree that equity in the home does not count as "investable funds"(so i don't include the equity in the home I live in as part of my savings in your spreadsheet)? I have concluded that unless I include the cost of my rent or my mortgage in my annual expenses covered by my $40,000 withdrawal, that i will need a $1 million pot of "investable savings" AND a home that I own without a mortgage. Do you agree with what I've concluded? Q3 If I withdraw $40,000 right at the start of year one of my early retirement to be my income in year one, do I have $1 million or $960,000 left in my pot? Q4 Would this $40,000 count as income or part of the 40% held in cash and bonds (assuming a 60% equity and 40% cash and bonds portfolio).

@ImOnUToob 2 жыл бұрын

I have a tough time figuring out my actual calculations because I’ll be getting 2 pensions through my union (provided they survive). I have a rough idea what they’ll provide, but it still seems like an uncertainty to me right now

@1234Krank1234 3 жыл бұрын

Great video. One point to make is since we are calculating based on post tax expenses, the net worth must also be calculated post tax( and not total pretax income i.e. 401(k))

@rob_berger 3 жыл бұрын

Well, it depends on whether you use a Roth or traditional 401k/IRA. You may even have a mix of both. And that makes generalizations very difficult. But yes, taxes are critical.

@waltermitty7452 2 жыл бұрын

@@rob_berger The video would have been much improved had the levels been defined with in the spreadsheet.. Just better lables than Level 1. Otherwise folks need to commit it to memory as the listen or take notes., etc.

@gk_filer 2 жыл бұрын

Bob Is there a web site that tracks all sectors of the market on one page YTD etc? Thanks

@craigharris480 2 жыл бұрын

When projecting out a large number of years I would recommend including inflation in the calculations - that is compounding against you

@lucasnam 2 жыл бұрын

How can I modify this calculator so it takes into consideration that today I might be saving let’s say 20% of my after tax income, therefore my expenses are 80%; however when I retire, because I will retire in a different country with lower expenses and I won’t have to pay rent my expenses will be much less than that, therefore my goal should be a lot lower.

@user-td7xf3gz4l 2 жыл бұрын

Rob - I'm about to get to 25x expenses at age 28. Is it too risky to retire now?

@fabiGBOtown 2 жыл бұрын

Rob, this is based on only putting money in 401k and roth iras? How much taxes do you pay from those numbers yearly?

@jagsterr1 11 ай бұрын

Thank you Bob - I am 65 and just learning about this. I have rentals and planning to sell them and stick them in the market and relax, sigh. How should I go about this, a 3 fund portfolio, 2? Obviously I don't have a lot of time, as I am 65 but healthy. I have all kinds of spread sheets on my expenses and the "what if" I take this or that out... I am still at at a base of $6K ATCF a month to live the way I live now. I would love your thoughts, or if you can do a video on this or a similar scenario I'd appreciate it. Thank you p.s. love your videos! I just binging on them for the past 5 hours. lol

@debbieshapiro9779 2 жыл бұрын

How would you account for inclusion of rental properties in these calculations? Would I include the current market value of the properties as savings?

@wackzingo 2 жыл бұрын

All that matters is the after tax profits. You can't pay your bills with equity. The only time you would likely include the value is if you know for sure you plan to sell them and include that money in your total savings.

@wackzingo 2 жыл бұрын

Equity itself isn't that useful but what is useful is you are reducing monthly expenses while increasing income. Let's say at retirement your livings expenses are $5000 a month but you pay the house off so that reduces your monthly expenses $1800, Social Security is $1700 that means your living expenses drop to $5000-1800-1700 = $1500 so you only need about $1500 a month to come from retirement. So take $1500*360 months that means you can retire with just $540k is enough to retire on with a 3.5% withdrawal rate.

@rightwingprofessor1356 Жыл бұрын

Bob; I did not hear you say what Level 7 was. I assume it is Retirement? (25X is usually associate with 4% rule, as you said.)

@EricGraff33 Жыл бұрын

Forgive me! I am just confused on this one aspect. If we have a 5% return then that is an investing aspect only. We don't have 300k after 25 years in the saving account, correct? This should be compounding is the point I am hearing and reading for your book. Or is this in a true savings account to be liquid? So, in 25 years I will have 300k in my savings? Please clarify as this is the only chapter so far confusing me. Thank you kind sir.

@tekootianderson 3 жыл бұрын

Thanks for the Networth website hack

@arcosd63 2 жыл бұрын

Mr Berger, I bought stock in Lidar radar systems, I bought at $13.00 and went down to $8.00 Being that the system is used in everything, how's that the stock tanks? Can you make a video about stocks that are almost indispensable in daily life, but the stock is a dud

@WorldWideWeasel 2 жыл бұрын

Research the company. Even though the brand might be recognizable and used frequently doesn’t mean they have good business practice or a good balance sheet (Look at Ford, even though they are repairing there reputation)

@ceciliaruns72 Жыл бұрын

I raised 4 children while working nights at the hospital and had no benefits, my husband was self employed and did not invest in our retirement. Since being divorced 5 years ago (at 45 years old), I've had to save 30%+ of my income to try to catch up to my peers. It has not been easy as a single mother.

@omni1562 Жыл бұрын

Wow, inspiring, Keep it up Cecilia! I'm praying for you

@Nightmarehc130 2 жыл бұрын

tried the net worth spreadsheet....worthless tool. wont allow me to input my current net savings...assumes I have NO MONEY now....says I need 8 million dollars to retire and it will take 61 years....

@Eline_Meijer Жыл бұрын

Although i disagree on most things you mentioned, your content is extremely valuable for 99/100 people. Keep it up!

@thatmuffinman738 2 жыл бұрын

Would you calculate 401k/Roth contributions on here as well?

@DavidEVogel 2 жыл бұрын

I haven't the faintest idea what is inside your 401k/Roth. Only you do.

@thatmuffinman738 2 жыл бұрын

@@DavidEVogel I meant toward your savings rate.

@Gary-ib8dz Жыл бұрын

@@thatmuffinman738 Yes, I think you can. You just need to remember that some will be taxed and some won't.

@tnelson6430 2 жыл бұрын

Question, Is this saving money or investing money? I’ll buy investing at 7% but if this is “emergency” money, shouldn’t it be in a savings account and therefore much less then 7%.

@rob_berger 2 жыл бұрын

Definitely investing money. Emergency fund is critical, but everything past that is investing.

@Gary-ib8dz Жыл бұрын

I was also confused by that. I just started this section of Retire Before Mom and Dad. I came to this video looking for an answer to the question.