The Four Stages

Note: I wrote this article as I was just beginning my writing for The Great Office Escape. Since then, this has evolved into the 5 stages of Professional Development. It is still interesting to see where various ideas come from!

There are four levels of social and economic freedom that each individual chooses (or does not choose) to reach.

1. Dependence

2. Employment

3. Self Employment

4. Financial Freedom

We are born into the first stage. Our parents support and take care of us as kids. This is a common thread that most families in the civilized world share. Children are, obviously, not capable of earning their own income and supporting themselves until a certain age. And I am not talking about historic times of slavery when the farms were filled with ten-year olds performing child labor, but the modern, civilized world. This stage can last for eternity for the developmentally disabled, the homeless, and the incapacitated, who can never care for themselves.

A very high percentage of adults are in the second stage, which is a place that many of us are conditioned to reach. It is the stage where we financially support ourselves by earning a paycheck. We earn an income from a job, or career and work for our living. Nobody is there to provide food, shelter and clothing. We go to work 40 hours per week, make money, then spend it on our livelihood. Our boss now dictates our time instead of our parents. We live on the watch of our employer, graciously accepting the weekly (or bi-weekly, monthly etc.) check that keeps us going, like a hungry dog. We are so grateful for the two weeks of vacation time a year and chant in unison “TGIF!” with our fellow hard-workers. It can take young people considerable amounts of time to wean themselves off the first stage “allowance” check their mom and dad send every now and then to help out. Once we have cut the cord though, we are genuine stage two workforce additions. Plug us in. This is where many of us have ended up, thinking that we have made it. But have we?

There is a third stage. It is difficult, but not impossible to reach as millions have done so. Here, we are no longer working for someone else at an income-generating stage, but we are our own masters. We set our own hours, come to work when we wish, and our income is directly tied into the talent, quality of output and skill we have in our particular field. Here, we create our own source of livelihood. Entrepreneurs are very free, but, in the end, even they have to kowtow to somebody. Instead of a parent or a boss, it is a client. They still have to deal with their vendors, their buyers, their prospects, and they still have to work, often much harder than people stuck in stage two. Stage three takes much growth, sacrifice, and hard work to reach, and once there, the hard work tends to continue. The elimination of this NEED to work is what brings us further, to the final stage.

The final stage, stage four, is financial freedom. And I know what you are thinking. It’s another word for being rich, or being retired. Not so. This is simply the stage where we no longer have to work for our income. It CAN be retirement, and it USUALLY happens alongside wealth, but this is not what defines the stage. The fourth stage is simply the time when the link between work and income is severed. It is a wonderful place to be. Now, we work when we feel like it, and we naturally gravitate towards things we enjoy and work we enjoy. We can be the most true to ourselves. Unfortunately, many people only reach this stage when they are so old that their energy stages are depleted to the point where all they want to do is lie around. This is because they’ve spent their whole lives in stage two. It doesn’t have to be this way. The fastest way to reach this stage at a young age (30′s or 40′s) is to create passive income. If you can make money while you sleep, play etc. and you could reasonably expect to do so for the rest of you life, or at least a very long time, then congratulations! You have arrived, and you are economically free.

I firmly believe that those who make the greatest contributions are the ones who are not motivated by money. Those with economic freedom are more likely to contribute to the world in a better way, because they have the time and energy to naturally gravitate toward things they enjoy, and things they are good at.

There are those who would think, “Why would someone in stage 4 contribute to society or be productive when they can do whatever they want?” My answer to this question is that nobody who reaches this stage is going to sit around and do nothing productive. Why? Because it takes a certain kind of person to get there! The true lazy bums of society are stuck in stage 1. To reach stage 4 you have to be willing to work hard. You must be intelligent, have a goal, and a passion. It takes a rare kind of drive and ambition. So for those who have made it, have they stopped doing what they love? No way. Many stage 4 people continue doing what they love and are making many contributions to society.

One final thought: One does not have to progress through the stages in order! I’d be hard-pressed to find someone who jumps from stage 1 to 4 though, unless they win the lottery. And even then, would they even know what to do with it all?

 

Did you like this article? You also might enjoy some of my other(s) below!

     2 replies to The Four Stages

  1. Victoria's Gravatar Victoria
    July 27, 2007 at 9:23 am | Permalink

    Regarding stage 4 – How would you clasify an individual who has inherited a large sum of money? Pick up any magazine and you can read a story about some heir or heiress squandering their money. In fact, how do you make the connection between financial freedom and productivity? Sure someone could work hard to reach stage 4, but in no way would that suggest that they would continue to work hard and pursue their passions. In fact, they might just sit back and spend all their money on exotic cocktails, name brand merchandise, and large mansions. They may just become consumed with higher society and keeping their status at the potential cost of others…

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