Grand Sabatier Is Not Retired, But He Could Be. He Is Considered One Of The Leading Activists In The FIRE Movement.

This phrase stands for “Financial Independence, Early Retirement.” Grant Sabtier is a self-made millionaire who has made a lot of money from his investments and does not need the world’s capital for the rest of his life.

In his book Financial Freedom, he explains the process of financial freedom.

Sabtier does not see his position as the ultimate goal of money-minded people. Instead, it tries to offer a way of life and more choices to people looking for financial independence.

According to him, every dollar you save gives you more freedom and choices in life. In an interview with Grow magazine, Sabatier claimed that based on your accumulated savings, ask yourself how many months of space you have.

Instead of golfing and fishing on a boat, Sabtier spent his life daily from 9 a.m. to 5 p.m. in what he called the mission phase.

In his book entitled “Financial Freedom” and “Financial Freedom Period,” he proposed a road map for financial security. In this roadmap, there are seven levels of financial freedom. These levels start from transparency and reach extreme wealth. According to the Magnify Money report, half of working Americans live paycheck to paycheck.

This situation puts them in the second tier of finances, which Sabtier calls personal sufficiency. According to Sebatir, progressing through the levels requires changing financial habits and thinking about money.

 

Seven levels of financial freedom from Sabteer’s point of view

 

 

Level 1: Transparency

The first step is to estimate the financial position. At this stage, you should see how much money you have, how much you owe, and your goals. According to Sebatir, if you don’t know where you want to start, you can’t get where you want to go.

Second level: personal sufficiency

Next, you need to stand on your own financially. Self-sufficiency means making enough money to cover your expenses without needing financial help from others. Sabatier adds that income is generally provided through monthly salaries at this level, and if the monthly salary falls behind, it becomes challenging to pay living expenses. Some people also take loans to cover the costs at this stage.

Third level: breathing space

People who earn Level 3 of the Sabtier Roadmap have enough money left over from their income to set aside for the day after covering living expenses and fund their retirement.
Escaping from the second level means that you have financial freedom. According to Sebatir, you should not necessarily earn more at this stage. It is intended to manage living expenses so that a part of the income remains for savings; With this account, high income does not mean saving that money. This is why many people are always in debt.

The fourth level: stability

People in the fourth level of financial freedom pay off high-interest loans without financial problems. These people should have at least savings for the next six months. The money that is saved for the day of emergency will help you not to destabilize your economic situation in case of financial crises.

Thanks to these savings, you won’t have to worry about losing your job or moving to another city because you have enough savings to keep you financially stable for several months.
Don’t look at ordinary and everyday expenses to calculate the savings you need to set aside at this level.

Instead, think about how much money you will need in a crisis. For example, in the condition of financial stability, you go to the gym and spend a monthly amount on your health.

However, in the financial crisis, the situation changes and you can exclude the club’s cost from the savings estimates list. Calculating the minimum daily fees, you need to live is to estimate the necessary expenses to get through the financial crisis.

Level 5: Flexibility

People on the fifth level of Sebatir’s financial freedom roadmap have set aside at least an amount to last two years. With the help of such savings, you can think about what this money will provide you. For example, with the protection you have set aside for two years, you can safely quit your current job for a year.
You don’t need to keep all this money in cash. These savings can be a part of your investments. As long as you have access to this money in some way when you need it, you have the flexibility to take time off from work.

The sixth level: is financial independence

People who have reached financial independence based on the Sebatir roadmap can live without working with income from investments. In this situation, two situations can be imagined. First, a person has invested a considerable amount of money, which will send significant interest to his bank accounts. The second mode is renting real estate.

In this situation, a person’s rent from this real estate is enough to cover all their living expenses. Sometimes, financial independence can be provided by combining the two situations we mentioned.

To achieve financial independence, you must invest a large percentage of your income. As a result, you need to adopt a frugal lifestyle and reduce your living expenses as much as possible.

Achieving such a lifestyle requires changing the short-term and traditional approaches to long-term and forward-looking approaches.

In the traditional lifestyle, people save 5, 10, or 15 percent of their monthly income for retirement. In this method, by reaching 65, enough savings have been accumulated to cover the costs of continuing life. However, today’s young people have a different approach to traditional savings for retirement. They know very well that if they work hard and set aside more of their monthly income for savings and investments, they will not need to work permanently in the future, and the assets they have made will cover their living expenses in middle age and old age.

Seventh level: Immense wealth

People who have reached financial independence earn the necessary income for living with the 4% rule. According to this law, without having financial problems, a person can comfortably spend 4% of the amount he invested in his retirement years.

Withdrawing money from a supported source should not put the investment at risk of running out of money. For example, if you have invested a million dollars for retirement, your investment should be such that you can easily withdraw forty thousand dollars of this money annually.

Economic experts disagree about the exact amount of 4%. However, you can consider the 4% rule a rough estimate for your financial planning.
While people with a financial level six monitor their income and expenses to ensure their retirement is still going according to plan, people with an economic level seven have nothing to worry about.

As mentioned, financial level 7 refers to an enormous wealth that, thanks to this money, a person has enough income never to have to worry about daily expenses.

Sebatir is now at this stage of financial independence. He claims that with the road map he proposed, other people interested in investing can also follow in his footsteps and achieve financial freedom. We will end this article with a sentence from Sebatir: “If you want to look different, you have to make different decisions.”