The six levels:
Level 1. Paycheck-to-paycheck: You are conscious of every dollar you spend. This includes people with crippling debt.
Level 2. Grocery freedom: How much specific grocery items cost don’t impact your finances.
Level 3. Restaurant freedom: You eat what you want at restaurants regardless of the cost.
Level 4. Travel freedom: You travel when you want, how you want, and stay where you want.
Level 5. House freedom: You can afford your dream home.
Level 6. Philanthropic freedom: You can give away money that has a profound impact on others.
I give away money that has a profound impact on others (so I'm at #6).
But I can't afford my 'dream home' (#5) (I'm within an order of magnitude, I suppose).
And #4 doesn't even interest me (I actively don't _want_ to have a private jet or whatever).
I can take a holiday pretty much whenever I want, if that's what it's getting at? I think very few people actually travel "how they want".
I think this is based on a very narrow, 'hollywood star' style of lifestyle. You don't need to be stupidly rich to give 10% of your income or to take a sabbatical from work.
I don't believe his intent was "private jet" it was "you can pick first class without concern and you don't have to look at the hotel/rental home prices."
House freedom is way below that.
There's an inbuilt assumption that you desire extravagance, which inevitably places philanthropy last. My point is that it's a choice.
#4 would mean I don't price shop Airbnb, hotels, and plane tickets so much. Or maybe I just take first class everywhere. Either way, you're talking spending amounts in the $10k+ range.
#5 means you can buy whatever size house you want within limits. That's more a $1M+ decision (although, amortized out long term)
#6 means Bill Gates level philanthropy. Not saying whatever donations you're giving away aren't meaningful, but I doubt you're getting wings in hospitals named after you.
It surprises me how philanthropic individuals are sold as benefactors who are a solution to solving problems linked to lack of resources, for those in needs around the world. I think it rather servers themselves instead, an effective PR routine that comes with decent guilt therapy.
It's one of those things like "expat" sounding all so good compared to those job stealing "immigrants".
Maybe we should all give a portion of our monetary power to those in needs, displacing what we would normally give to Unilever-like producers. It would skip the inefficient intermediary.. I digress.. The scale ain't right, but the idea is spot on.
Either that, or you're assuming that the reasonable benchmark for comparison is close to the absolute most expensive example within a specific sector, which doesn't really match how I spend money.
Thinking about it more, I'd probably say I even hit #4 before #3. Why?
a) I don't really care that much about eating out, so despite being able to theoretically afford "Super Fancy Meals" I still think about it because I could just give someone else that money instead.
b) First class flights and fancy hotels I find ridiculous, they don't factor into my purchasing decisions. I far prefer a cabin in the woods or going hiking or something like that to some constructed notion of luxury.
I'd sooner give $10k to charity before I take a first class flight - in fact I'm on track to do that this year, and hope to increase it. If you don't count anything below $millions as being philanthropic then of course you've defined level 6 as being the top, that doesn't make sense to me.
Wanting a cabin in the woods and being able to afford it does not make you "House freedom level". That level is being able to buy any house you could want without second thought.
The fact that you would not choose such a house is completely irrelevant to this train of thought. Some things you have to plan out and some things are just not worth to consider for even a second.
I don't think "any X I could want" is meaningful.
You're taking it presumably to mean the most expensive offering that exists in the world, but I _could_ want something akin to Buckingham Palace and no amount of money would get me that, or I could want some generic massive palace that would cost $50bn which obviously is above the philanthropy level by any metric, or maybe I genuinely do just want a bog standard terrace because I'd rather give my money away than 'elevate' myself into a weird Hollywood lifestyle.
It makes far more sense to think about what I actually _do_ want, and in that view the levels can be ordered differently depending on the person.
The point I am making is that to some extent these levels are individual choice, they're not cast in stone.
Your example of saying you don't care about fancy meals... well, sure, but that doesn't change the fact that your price sensitivity to a restaurant is going to be much lower than a vacation. If your end goal is to give a bunch to charity, then scrimping on a vacation too would be a better decision ultimately.
It's really hard to spend more than say, $1k on a meal. Even 3 star Michelin restaurants don't charge that much unless you include alcohol.
Comparatively, it's EASY to spend $1k on a vacation. Incredibly easy.
Dropping $10K on a vacation without thinking about it? No, I'm not there. Taking the vacation I want without thinking about the cost? Easy - I just don't want that kind of vacation.
"Travel" can mean grey hounds and motels, or first-class flights and luxury hotels. Philanthropy can be donating $100,000 or giving a buck to a guy on the street.
The key take away from the article, at least for me, is how much you flinch at extra costs, and that being about 0.01% of what you have in the bank.
The idea that you must first have your entire life laid out with a massive house and first class flights and stuff before you start helping others is deeply wrong IMO.
Kind of like the old saw about only the poor are "crazy", with enough money you become "eccentric".
What I see with most people around me,who stand at a low level: - spend most if not all or even more than what they can afford. - far more obsessed with getting more money than adapting their expenses. Of course they have no clue how to make more money, so they don't end up financially happy at all.
I think it's a great article as it put things rather simply.