Levels of FIRE

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 FIRE cannot be achieved in a single day. It takes years or even a decade to reach to this stage. FIRE journey can be classified into these 7 levels. A person's ability to reach FIRE quickly is determined by how well he was able to understand his current situation(at which level he is in) and planned to reach the next level. Below are the levels of FIRE.

1. Financially Insolvent:

This is the rock bottom in the levels of FIRE. Every human being starts with this stage. In this stage the individual is dependent on others(usually parents in India) to meet his financial needs. All the people who can't earn for themselves fall under this category.


Also this stage will have people who were once earning and were in better position in past. But, due to their financial decisions they fell in to this category. This kind of people are known as broke after declaring bankruptcy.Ex: Anil Ambani received all this wealth from his father Dhirubhai Ambani. He couldn't manage to keep his wealth. Took away huge leverage, dragged to court by banks and made to declared bankrupt.

2. Breaking Even:

In this level of FIRE, you are able to meet the end's meet on your own. You will have ability to pay your house rent, Utility bills, food, transport, EMI's etc. Mathematically Speaking, This is the situation where Income = Expenses. 

In this level, if the person is struck for long, we can say he is in the rat race. Living payday to payday.

3. Debt Free:

When an Individual has zero obligations to pay to bank, he is considered as Debt free. By reaching this Zero debt, you will eliminate your EMI's and interest payments that pull you down. From this level, You will be budget surplus.

4. Security:

You have made lot of efforts to reach the debt free. Imagine, you have met with an accident(God forbid) and can no longer earn until you are fully recovered. You will be dragged to level 3, then level 2, then level 1. Hence, Protecting all your efforts matter. This is done by having

  • Emergency Fund
  • Health Insurance
  • Life Insurance
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 5. Investing:

This level we are able to start to build our retirement corpus. We need to know how much will be sufficient to retire. Every individual situation will be different. So, amount of retirement will also be different. In this state, we will be working along with our money working for us.

Detailed explanation about investments are mentioned in this post.

6. Financial Independence:

Attaining this level is the ultimate goal of this blog. In this stage, your investments must be able to pay off your current lifestyle and you can safely quit your Job. 

7. Abundance:

The level in which your investments not only help meet your day's meet but can also satisfy a luxurious lifestyle and one doesn't need to think of money before they spend is the Financial abundance.


Achieving FIRE is a journey. Reaching destination is as important as enjoying the journey.   

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