Financial security is the feeling of being able to meet life’s necessities. Financial stability is when there are few financial worries, even if you have a sudden expense. Financial freedom is the point at which your income exceeds your expenses, and you can invest, save or purchase what you want without worrying about money. And finally, financial independence relates to how much wealth someone has built up. It means that they don’t need to work anymore because their passive income (from investments) covers all their needs and desires.
Table of Contents
Financial Security, Stability, Freedom & Independence

Journey to Financial Freedom:
Stability, Security, Independence,
And Ultimately, Freedom!
These are all stages of a financial journey that begins with poverty or financial dependence and progresses to financial independence. Here is the of all the stages of the financial journey.
1- Poverty or financially dependent
2- Financial Stability
3- Financial Security
4- Financial Independence
6- Financial Freedom
Our list of Free Money apps will help you with money at any of the above stages.
Poverty or financially dependent

At this stage, a person does not have enough money to meet their needs and is dependent on others for financial support. They are dependent on others who may or may not be willing to help them. It’s tough being in this low stage.
At this stage, you should try to think about the reasons that have eventually led to this phase. The reasons can be anything like your bad habits, mistakes in handling money, or anything else.
After looking at the heart of the issues, you may correct each one. One idea is to enhance your skillset so that you may compete better and make more money. You’ll be able to get yourself out of this situation in that case.
Financial stability

When you are financially stable, it means that there is little financial stress in your life, and no sudden unexpected events (like layoffs or accidents) would put you on the streets immediately. This stage of financial security comes when someone has enough savings to cover them 24-36 months of living without an income.
This stage is the first step towards financial freedom because it gives you enough time to create your passive income streams, whether business or investment-related. Also, this stage allows for significant wealth creation since now there are no immediate financial concerns, and you can start investing in assets that generate cash flow (in today’s market real estate).
This stage is also a great time to re-evaluate your financial priorities because you have the breathing room.
Financial Security

At this point, one can meet their daily expenses, but there are still worries about saving for retirement and other long-term goals. But now, they won’t ask others for money or borrow unnecessarily. Instead, they will save a little money and invest in financial assets that generate income.
People at this stage can take care of themselves even if there is a sudden layoff or accident. They have the financial freedom to fulfill their dreams and desires while still saving for retirement, children’s college education, etc.
To enhance your financial security, you should consider these budgeting tips for young adults, couples, and low-income families so you always remain within your spending limits.
Financial Independence

At this point, you’ve built enough passive income streams that cover your expenses completely, so you don’t need to work anymore. You can sleep well at night knowing that your financial future is taken care of, whether you live another 30 years or not.
You may still take on projects if they are interesting and will add value to your life but the main source of income (and time) comes from passive investments like real estate, stock market, or business.
This is the stage of the financial journey, where you can do whatever you want without worrying about money because your passive income covers all expenses.
One way to grow your wealth and earn passive income is to buy a vacation rental property. This post will help you get started: Top 7 Things to Know Before Buying a Vacation Rental Property.
Financial Freedom:

This is the final stage of financial independence. At this point, you have enough passive income to cover your expenses, so you don’t need to work anymore and can do whatever you want with your life. This is also called Financial Independency or Semi-Retirement (or early retirement). Of course, you still will take on some projects and also travel around the world.
Financial freedom is a stage where you feel free to do whatever you want because your passive income covers all expenses, so there are no financial constraints on what you can achieve in life. You may take up new adventures or hobbies that interest you, such as sailing, cooking, etc., without worrying about money. You will also have the freedom to pursue any passions, including starting new businesses, investing in real estate, etc.
This is also a great time to give back and ‘pay it forward by helping others who are just beginning their journey towards financial independence or through philanthropic activities like supporting charities.
If you want to achieve financial freedom, then you should check this post on Wealth: 10 Rules to Attract Wealth in Your Life!
Conclusion:

Stability, security, independence, and freedom are steps to a financial journey. And the journey starts from a single step.
The main difference between these stages of financial security vs. stability vs. freedom & independence is the financial stress level. In each stage, you have enough money to survive and cover your expenses but at different comfort levels based on how much savings one has accumulated in their bank account (liquid assets).
The other difference between these stages is that once someone gets financially stable and becomes financially free, they will be able to pursue any activities they want without worrying about financial constraints. However, financially secure or those on their way to financial stability may not have that luxury because there is still some pressure for them to continue working and make money (at least a little bit).