Which Type of Income is the Most Dangerous?

Among the five income levels in your financial journey, which is the most dangerous?

After I took that assessment by Chinkee Tan about two weeks ago, which I also wrote about, I learned about the most dangerous type of income.

Before I tell you about it, let me share with you the levels of income that he shared in his video (link at the bottom of this post).

Types of income

Level 1

It’s all about your survival if you’re at this level of your financial journey.

You’ll strive to get a job, even just for today, to survive until tomorrow. Because if you don’t get paid today, how will you make it tomorrow?

And tomorrow is going to be another day.

Level 2

If you are at this level of your financial journey, you would typically worry about surviving next week if you don’t get to work enough for this week.

You’ll still be striving because, this time, you’re always thinking about paying off the bills.

Level 3

You are at this level if you usually get paid once or twice a month for a month’s work as a full-time employee.

At this level, you are comfortable. You can pay off your monthly bills and buy what you need. You would worry about not getting fired.

Level 4

If you are at this level of your financial journey, you already have an annual reserve.

This means you have an emergency fund, and even if you don’t work for a year, you’ll survive.

Level 5

You’re already at this level if you have a decade or more of wealth. Even if you don’t work for a decade, you’ll be okay!

Do you think you’d still worry when you’re at this level of your financial journey?

Of course.

And that would be about your legacy. How will you maintain your wealth so that your posterity will benefit from it, generation by generation?

For example, Chinkee Tan shared about the Ayala family, which is among the wealthiest families in the Philippines.

Why would they lease their properties for more or less than 50 years instead of selling them? No, they’re not worrying about being unable to take their money to heaven like you and me. What they worry about is getting their properties back for the next generation.

So, which among these levels of income is the most dangerous?

It’s when you’re living comfortably with an income coming in each month. That’s the most dangerous level of income.

Why?

At levels 1 and 2, you’ll strive to work harder because you have to. You have to survive.

But at level 3, you are in danger of not reaching levels 4 and 5 of income because of complacency.

You are satisfied.

And when you lose your job, you are in danger of getting level 2 and, worse, level 1.

At what level of income are you right now?

Your neighbor,

Wam

Here is the link to my previous post about this topic:

Here’s the link to Chinkee Tan’s video on YouTube: