Why Should We Understand the Financial Pyramid Before Investing?

[Suba]

A financial pyramid is a financial planning model structured according to priorities, needs, and risk levels, resembling a pyramid. The financial planning model is structured based on a systematic concept, starting from the bottom to the top of financial goals.

The pyramid model can be structured into several layers as needed, but in general, we can divide the pyramid into five layers:
1. The first or bottom layer is maintaining a balanced cash flow, emergency funds, and managing loans.
2. Increasing income, risk management, and asset protection (insurance).
3. Medium-term financial goals, such as buying a house, car, children's education, etc.
4. Retirement planning and creating passive income sources.
5. The final layer, at the top, is wealth distribution, whether through donations or inheritance. The goal is to ensure that our wealth can be enjoyed by future generations.

 

[gwolf666]

Hi, I find the explanation of the financial pyramid model very interesting. I think it's a very visual and practical way to understand how to organize our financial goals and priorities. What caught my attention most is the importance of starting with a solid foundation, such as maintaining a balanced cash flow and having emergency funds, as this provides short-term stability. Then, moving towards asset protection and income growth seems fundamental to ensuring healthy growth. I also like that the model includes medium- and long-term goals, such as buying a house or planning for retirement, because it helps us have a defined direction. Finally, the top layer of wealth distribution seems very valuable for thinking about the legacy we leave behind. In short, I find this approach very comprehensive and useful for planning a stable and prosperous financial life.