Your Financial Journey in 7 Stages: Which Wealth Level Are You Actually At?

Think of building wealth like progressing through a video game—except there’s no reset button and the stakes are real. Financial educator Vincent Chan recently outlined a compelling framework that breaks down wealth into seven distinct stages. Rather than measuring success purely by income, his model focuses on “time wealth”—how long your resources can sustain you without additional earnings. Let’s explore where you might fall on this spectrum.

Stage One: Making It Through the Month

Chan calls this the clarity phase, where your time wealth extends barely beyond 30 days. You’re familiar with this level if you live paycheck to paycheck, constantly juggling bills and anxious about unexpected expenses. It’s survival mode, and the priority is simple: slash expenses wherever possible. Meal planning and inventory management (knowing what’s actually in your fridge) become powerful tools. The goal? Build enough cushion to reach the next phase.

Stage Two: A Few Months of Security

At this second level of wealth, you can cover two to three months of living expenses. Chan himself spent his college years here, learning crucial habits like cooking at home, limiting nights out, and keeping credit cards locked away. The breakthrough came when he built what he calls “a real financial cushion”—essentially, a six-month emergency fund in a high-yield savings account. For most people, that’s roughly $33,000 set aside for unexpected costs.

Stage Three: The Comfort Zone (And Its Danger)

Now we’re talking about breathing room. With three to six months of expenses covered, you can finally exhale. Dining out doesn’t trigger panic. A small purchase doesn’t keep you up at night. But here’s the warning: this is where many people get stuck. It’s too comfortable to leave, yet not comfortable enough to feel truly secure. To break through, consider increasing your income through additional credentials, a side venture, or an entrepreneurial project.

Stage Four: When Stability Feels Real

At this checkpoint, you’ve accumulated six months to a year of time wealth. Money stress diminishes considerably. But Chan points to an important next step: prioritize acquiring assets over liabilities. Drawing from “Rich Dad Poor Dad” concepts, assets generate income while liabilities drain it. This is where savvy investment decisions—stocks, bonds, real estate—matter more than luxury purchases. Channel unexpected windfalls (bonuses, gifts) into sound investments rather than consumption.

Stage Five: Doors Begin Opening

Moving into the fifth level of wealth means you could sustain yourself for one to two years. This is where financial security transforms into financial opportunity. The focus shifts to tax optimization through 401(k)s, Roth IRAs, and HSAs—then reinvesting those savings. You’re no longer simply protecting; you’re actively building.

Stage Six: Your Money Works Harder Than You Do

Financial independence arrives at level six, with 30 to 60 years of time wealth on the horizon. Your investments, rental properties, and passive income streams now genuinely cover your living expenses. Work becomes optional. Philanthropy becomes possible. Here’s where debt strategy changes—the wealthy use leverage strategically, taking loans to acquire income-producing assets while deploying cash elsewhere. Think of how billionaires operate: they borrow for office complexes, apartments, and business ventures, using that borrowed capital to amplify wealth creation.

Stage Seven: Generational Wealth and Beyond

At the pinnacle, abundant wealth means you don’t just secure your own future—you create a legacy. Your options become nearly limitless. Your money transcends personal comfort and can generate meaningful, lasting positive impact. This is where wealth becomes truly transformational.

The question isn’t whether these seven levels of wealth apply to you—they do. The real question is: which stage resonates with where you are now, and what’s your next intentional move?