Monday, October 25, 2021
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Advantage money line

You’ve got to tell your money what to do or it will leave

-Dave Ramsey

We all go through certain stages, beginning from Money Dependence to Money Interdependence. There are many people who are rarely able to step in the Money Interdependence stage and keep struggling for their entire life. Therefore, I have prepared a chart exclusively that can help you in understanding the various stages and attain financial freedom.

In this chapter, I will also explain in detail all the seven stages, followed by the Richness Continuum and the basic ingredients of each stage. So, let’s begin with the chart first.

The 7 Stages of Money Dependence to Money Interdependence are:

Stage 1 is the security of life and health so that you can achieve

your goals. Once you have taken an appropriate Life Insurance plan, you need to look at your three kinds of Health insurances and opt for them as well.

Then stage 2 is the contingency fund. Under the contingency fund, you need to look at whatever money may be required. Hear the contingency fund telling you, “I’m your contingency fund, not disturb your long term investments and savings.” For example, you may have a dental problem, an accident or bereavement in the family. Alternatively something not planned at all! Such unseen circumstances require you to make certain payments immediately, and this is where the contingency fund comes for your rescue.

There are situations when my clients inform me that they need to save a lot of money for a contingency fund. However, I tell them that as financial planners, they should keep the maximum amount in a contingency fund. Rest, they should either invest for long-term goals or go out and enjoy life with that money.

Once this is done, we go to stage 3, where you have children’s education and their marriage. You have to plan for, whatever may be required. It is the money dependent stage because there are people who are dependent on you and the money dependence is still there. So, you have to work for these factors. And once this is done, we go to stage 4.

Stage 4 is your retirement goal. Once you have planned this, you need to go to stage 5, which consists of building your home and planning for vacations. Now stage 4 and 5 have already been taken care of since you started investing for all of these.

Then you can go to stage 6, which is wealth creation, which can also be called as the money independent stage because now you are independent of earning money any further. Instead, now the money is coming to you irrespective of whether you are working or not. To complete this stage, you have to keep in mind three factors:

  1. Your profile
  2. The time Horizon for each goal
  3. The kind of resources that you have which means, Income - Expenses + Past Investments

These factors help you to bridge the gap between the two phases; money dependence and money independence.

Now comes the stage 7, which is the wealth distribution stages since the future tax payable is the least. This phase can also be called as the interdependence stage. In this stage your legal heirs and your dependents are now going to be dependent, on whatever you are going to leave behind for them, as a part of your will.

The best part is that these 7 stages do not have any correlation with the stages of life.

There is a possibility that you could be leading the life of riches, maybe, by mid-thirties. In plain words, the more airtight your financial planning is, the earlier can you step in stage 7.

What comes after stage 7 is what we call as the Richness Continuum; the Continuum of Independence; the Continuum of Interdependence of others on you.

You are like a giant oak that fears no rain now.

Rather happiness should be the primary fuel ingredient during all the stages.


Happiness is something that keeps the wick of your enthusiasm kindled throughout the journey.

These stages are the nectar of steps to attain financial freedom.

And dear reader, this is the right time to set yourself apart from the crowd by trekking to the Richness Continuum that most people long for.

Most people keep wresting throughout their life to get in close quarters to this stage, but most of them are never able to lay their hands on Richness.

However, now since you know the pathway, you have the opportunity to achieve it. It is said that what you can see, you can achieve it.

And now you can see yourself being rich, it is time to lay a blueprint and follow it religiously.

If you wish to seek any assistance or suggestions to fast-track the journey to Interdependence, then the next chapter is for you.

Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are

—James W. Frick



About ADVANTAGE FINANCIAL PLANNERS LLP: The Firm is registered with Government Of India-The Ministry of Company Affairs as a partnership firm. The firm is registered with SEBI (The Securities and Exchange Board of India) as "Registered Investment Advisors (RIA) under the SEBI (Investment Advisers) Regulations, 2013. Registration with SEBI as "Registered Investment Advisors (RIA) brings more formal approach, risk profiling, disclosure, and transparency. While the firm is a fee-based investment advisor, this brings you the opportunity to get unbiased, researched, accurate, transparent and professional advice. The firm is managed by the founder and its Partner, Taresh Bhatia. The company provides financial planning advisory services from its office in Gurgaon, India. The firm specializes in investment planning, retirement planning, tax planning, personal financial planning and wealth management. About Taresh: Taresh Bhatia is CFPCM CERTIFIED FINANCIAL PLANNERCM. He provides fee-only financial planning advice. He has helped over 300 families plan and organizes their economic life so as to move positively towards their financial goals. Taresh is an expert on financial advice and has three decades of industry experience. Among his qualifications, he is a CFPCM CERTIFIED FINANCIAL PLANNERCM and an MBA from IMI, New Delhi. He is also a member of the Financial Planners' Guild, India (FPGI), an association of Practicing Certified Financial Planners. If you have any questions, please email us at

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