The Personal Finances Game

It’s another Wednesday!

In this week’s newsletter, I want to introduce The Personal Finances Game! Yep, you read that right. Personal Finances is a game where everyone is a player. There are only 5 levels though. Let’s see where we are at! Before that, as always, freshly new blog on Medium regarding this topic is up if you like to go into a bit more detail

Level 1: Basic Cashflow and Fundamental Needs. Your primary income should cover essential expenses such as food, rent, utilities, and more. Most of us pass this level pretty easily IF you have a steady basic income.

Level 2: Safety Nets. Once your basic needs are met, it’s time to plan ahead. This involves budgeting and eliminating debt. Repeat this sentence: “I must get rid of my debt as fast as possible.” At this level, you also need to save for emergency funds to handle unexpected circumstances like job loss or medical emergencies. This level can be challenging, requiring diligent work on tracking expenses, budgeting, and saving. Most people don’t get past this level. Also, remember these wise words:

“Beware of small expenses. A small leak will sink a great ship.” - Benjamin Franklin

Level 3: Accumulate Wealth. Congratulations on your hard work! Now, with some extra cash in hand, it’s time to invest wisely (no get-rich-quick schemes you find on the internet). If you’re a full-time employee, consider participating in your company’s 401(k) plan. Freelancers can invest in Individual Retirement Accounts (IRA) and Roth IRA accounts.

Level 4: Financial Freedom. After putting in the hard work to manage your finances, it’s time to enjoy freedom. But remember, you still need to maintain financial discipline. At this level, you should cover all your needs, savings, and investments. You’ll have the freedom to choose your work, lifestyle, and where you live.

Want a taste of freedom? You can try this: negotiate to work from home (make sure you work diligently though!) for couple days of the week then see how it feels. After that, imagine your life with financial freedom.

This is what we all should try to achieve. And no, you don’t have to be a trillionaire.

Level 5: Legacy. This level is for those who want to build their own empire. It involves real estate and business succession planning.

So, what level are you at? I will be honest, I’m at between level 2 and 3. I managed to pay almost all my student loans and started my investing journey through my 401(k) and IRA. My goal is to reach level 4: Financial Freedom. Stay tuned to see how you can level up in this game!

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