What is Level 1 Financial Freedom?
If you haven’t listened to David Pere’s latest podcast on From Military to Millionaire where he interviews Brandon Turner, you should. Finish reading this blog post and then immediately go and download the episode. Oh, and hit the subscribe button to his podcast and YouTube channel as well.
In this podcast Brandon talks about the different levels of financial freedom: Levels 1, 2, and 3 and how his goal is to help more people get to Level 1 – i.e., your passive income pays for ALL of your life’s essentials (housing, food, clothes – the bare bones). He says, “once you have achieved Level 1, you then have the free time, if you choose to use it, to get to Level 2 which is where you can basically do whatever you want with your time and your money”.
But here’s where it gets interesting – David then takes a pause and throws out the idea that ALL of us that join the military get a head start; we ALL actually start at Level 1! And, if we don’t do a lot of stupid stuff in between, we can finish at Level 1 when we retire. He’s right! Think about it – when we join the service, we basically have ALL of our life’s essentials paid for us. We get a housing allowance, a sustenance allowance, health and life insurance, the option to start a retirement account, and a pay check on the 1st and 15th of every month – like clockwork. And when we retire, we get a monthly paycheck for the rest of our lives that should cover all of the same expenses.
But, I’m not sure about you, but I don’t want to just maintain Level 1; I want to beat Level 1!
For those of us in the military, we have such an advantage to beating Level 1 if we so choose to. And I kick myself daily for not realizing this earlier in my career!!!
How do we do it, you ask?
Honestly, it’s simple. There’s no secret sauce. Increase your income. Decrease your expenses. Increase your saving’s rate. And put your extra money to work through specific investment vehicles (I obviously am partial to real estate).
We make a lot of dumb financial decisions in between joining the military and retiring from the military and this has to change if we want to beat Level 1. New expensive cars, big houses, motorcycles, boats, expensive clothes, alcohol, tattoos, and extravagant vacations are just a few of the many poor choices I’ve seen (and done myself). These are all Level 2 and Level 3 expenses, not Level 1 expenses.
So, let’s make some changes. We have to stop making poor financial choices.
For those of us that are at Level 1, let’s teach more of our brothers and sisters in arms to get there too. And then let’s form a tribe and go beat Level 1 together.
Take Bold Action! Let’s beat Level 1!
Written by Stuart Grazier
