The 5 Types of Wealth: A Transformative Guide to Design Your Dream Life

by Sahil Bloom

There are five clear and distinct levels to the Financial Wealth journey: Level 1: Baseline needs are met, including food and shelter. Level 2: All baseline needs are exceeded, and modest pleasures become accessible. This includes meals at restaurants, simple vacations, and spending on education. Level 3: Baseline needs are no longer top of mind, and the focus is on saving, investing, and compounding wealth. More significant pleasures, such as multiple vacations, are readily available. More aggressive asset compounding generally begins at this level. Level 4: Most reasonable pleasures are readily available. Asset accumulation accelerates, and assets begin to generate passive income to cover some lifestyle expenses. This is the level of moderate financial independence, as you can reduce your active income and continue to live the same lifestyle. Level 5: All pleasures are available. Asset accumulation reaches escape velocity, and assets generate passive income in excess of all lifestyle expenses. This is the level of complete financial independence, as you can remove all active income and continue to live the same lifestyle.