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Stage 1 - Financial Solvency

Active Cash Flow > Lifestyle Cost​

Stage 1 happens when someone’s active income can roughly cover their lifestyle expenses.

At Stage 1, you are able to support yourself, but your Savings Rate is still 0%, and as a result you are not extending your Runway.

caution

People at Stage 1 are trapped in an endless cycle of: earn money, spend everything, go back to work, repeat indefinitely.

Being at Stage 1 is better than being at Stage 0, but the lack of Runway leaves people at this stage with still few options.

The only way out of this stage is to increase the gap between cash coming in and cash going out.

danger

Get out of this stage as fast as possible!

Increase your Savings Rate