I have found that there are 4 Financial Stations on the road to Wealth.  They are Pay Cheque to Pay Cheque, Security, Comfort, and Independence.  The thing about these Financial Stations are that they are NOT tied to a specific amount of money.  They are LIFE STYLE dependent.  This means that Pay Cheque to Pay Cheque is NOT from $0 to $20,000.00 a month in income.  The amount of money doesn’t matter.

The stations ARE dependent on your monthly expenses versus your monthly income.  For example; if your monthly expenses match your monthly income you are in the Pay Cheque to Pay Cheque Station.  Regardless of whether your expenses are $800 a month or $50,000 a month.

Pay Cheque to Pay Cheque visual

If what goes into the tank is the same as what flows out, life is scary. This is normally the situation of most EMPLOYEEs.  The only income they have is either from one or two pay cheques.  At this station, people are only one or two missed pays away from a big Life Style change.  The problem is, that this is the situation of about 70% of people.  Regardless of how much they make!!!

The longer someone has been in this situation, the longer it will take them to get out.   Why?  Because we get accustomed to a certain LIFE STYLE.  Moving to the next Station often means a change (hopefully a small one) in what we normally do.


The Security Visual

If you have no money left from your Pay Cheque at the end of the month, BUT, you have put $500.00 a month into Savings (investments) and run a profitable part time business that brings in some money every month, you are at the next Station.  The Security Station.  Here there is more money going into the tank than the monthly Expenses take out.  We have some Reserves we can draw on if one of the income Streams is lost.  At this level, if we have a loss or reduction of one of the income streams, we could last a few months before we would have to make a Life Style change.



The Comfort Station Visual

As we use our Savings to buy more investments we actually generate more and more streams of income.  None of these streams are huge, but because we have so many they fill the tank far more than our monthly expenses use.  This is the Comfort Station.  At this point the multiple streams generate enough income to fill the tank far above your monthly expenses (how ever much that might be).   At the Comfort station you are not totally dependent on a pay cheque.  At this station, it could take many months before we would have to change our LIFE STYLE because of the loss of one income stream.  This generation of multiple small streams of income is the key to accumulating wealth.


The Independence Visual

Eventually the multiple streams of Income generate enough income to cover your monthly expenses.(how ever much that might be)  These Income streams also generate enough money to buy more investments that generate even more streams of Income.  You are now FINANCIALLY INDEPENDENT. You work for a pay cheque only if you want to, not because you have to.

It is at this point that your problems turn from not having enough money to having too much.  Sounds like a good place to be.