I read an article on the 11 levels of wealth. I am not sure if that would be applicable for all the people.
Certainly, in Bhutanese context, that many levels of wealth doesn’t make much sense. There are 5 levels of wealth based on our suitability.
Every level means different things in your overall financial life. You need to know your level as they affect decisions in life.
Level 1 – Dependence
The moment you are born, you enter the financial dependence level. You are in this level until you win breads and don’t depend on others for your basic financial needs.
However, towards the end of this level you must make efforts to reduce total dependency on your parents or relatives from 100%.
When I was a student, I used to work in building or road constructions in winter breaks to reduce financial burden on my parents.
But there are people who still remain in this level even after crossing 30s. Our social structure and principles don’t seem to mind it.
Level 2 – Survivability
In this level, you are able to make money just enough to meet your basic financial needs.
You also do not need someone to financially support you but also cannot save either. In our word, it’s a hand-to-mouth level.
Some people would always be in this level despite higher income due to their extravagant lifestyles of rich man in a car.
People in this level are just one paycheck away from falling into stressful financial troubles.
I was in this level for about 2-3 years after I got my job. My placement in Thimphu actually made it worse.
Level 3 – Security
If you are in this level, you earn income that is not only able to meet your basic financial needs but also to save and invest.
You have an emergency fund savings which will cover your expenses for 6 months if you lose an income/job.
In this level people tend to realize how money is able to give a freedom of choice with safety and security.
I can choose whether to encash my annual leaves or use them for taking my family for a vacation in Bangkok.
Level 4 – Independence
If I am in this level, I will have a solid investment portfolio (stocks, bonds, real estate etc) that regularly earns income to finance my lifestyles.
The crossover point of Your Money or Your Life, and then 4% withdrawal rate of retirement planning are things of this level.
Money isn’t a priority. People can choose to stop working for money and then do things they love (like painting) even if there is no money.
Level 5 – Abundance
Money doesn’t matter at all for people who are in this level. They will have money they cannot finish spending even in multiple lives.
They can afford to be sugar daddies/mummies and then gift few prados or buildings to their sugar babies.
People who have good principle and are in this wealth level will focus on using their wealth for greater good and leaving legacies.
These people are on the top of Maslow’s hierarchy of human needs who only have to seek self-fulfilling needs.
Did you know your level of wealth now? It’s important as it guides what we do most of the things in life.
