Watchman Nee discusses the three stages of a believer's life following regeneration: the stage of the flesh, the stage of the soul, and the stage of the spirit. He explains that after being regenerated, believers may still struggle with sin and doubt their salvation, not realizing they are still in the flesh. As they grow, they may feel joy and engage in spiritual practices, mistakenly believing they are spiritual, yet they remain governed by their emotions. True spirituality is achieved when the Holy Spirit takes control, allowing believers to live in accordance with the spirit rather than their flesh or soul. This progression emphasizes the importance of spiritual maturity in the Christian journey.