💎What is the financial pyramid or the "financial triangle"?

💎 the financial pyramid, or the "financial triangle," and why is it important?

The Financial Pyramid is the basic concept of personal financial planning used around the world. The core is to "build a solid foundation first and then climb to higher risk and return goals."

The last point is to "pass on wealth to the people we love" firmly and sustainably.

🧩 Step 1: Manage liquidity - the most stable foundation

Is an emergency reserve that allows us to continue living despite unforeseen occurrences such as loss of work, illness or accident. Should have a reserve of 3-6 months (or more) calculated from

Expenditure per month × number of months required reserve

💵 expenditure per month = regular expenditure + non-regular expenditure (estimated as close as possible)

Store them in easy-to-access sources, e.g.

• Savings account

• Money market mutual funds or short-term fixed income funds

🛡️ Step 2: Risk Transfer - Prevent Before Sickness

Start by assessing the potential risks and decide whether to

• Take the risk yourself (pay yourself in all cases when unforeseen events occur)

• Transfer risk to others (e.g. insurers)

📌 formula: risk = chance of occurrence × size of damage.

If "the chance of birth is small but the impact is high," e.g.

Accidents, serious diseases or medical expenses should transfer risks with insurance, e.g.

• Accident insurance

• Fatal disease insurance (end pay or multiple end pay)

• Health insurance (medical expenses paid)

• Life insurance (pass on lump sum to family)

Don't forget, "corporate welfare is on the table, not welfare."

When we leave work, we may no longer have the same guarantees.

🎯 Step 3: Plan for the goal.

Once stable, "targeted savings" should be clearly separated from regular spending.

And choose a saving tool to suit the period:

• Short-term: fixed deposits, debt securities

• Medium term: mutual funds, good basic stocks, savings insurance

• Long-term: pension insurance, retirement funds

It should always be checked whether the money available today will be enough to reach future goals.

📈 Step 4: Plan an Investment - Give Us Work Money Instead

Once the financial base is strong, the money is "risk-ready."

It can be extended by investments such as stocks, mutual funds, real estate, gold, oil or collectibles.

💝 Step 5: Forward wealth

For people who are pillars of the family, planning forward property, e.g.

• Life insurance

• Will

• Heritage or trust

Keeps the people behind stable even when we're gone.

💰 On-the-way tax administration.

Every step of the financial pyramid can "tax plan" along the way.

Using tax deductions, such as

• Life insurance / pension insurance

• SSF Fund, RMF

To reinvest and save more tax money.

⚠️ And why do many people break down because of "upside down"?

Many people start with "invest first, discipline later."

But when emergencies, such as sick or unemployed, there is no reserve.

You need to sell your assets and lose or stop investing.

On the other hand, if we start from the foundation (steps 1-3),

Despite the crisis, finances were stable and ready to stand back sooner.

"A stable financial pyramid must start from the base, not from the top."

# NoteAIA