Three sides of the wealth pyramid
I was once asked what we can do to create a pyramid of money or wealth pyramid. On deeper introspection on how I created my own wealth pyramid and how I helped my clients to create theirs, I found that a pyramid can be created if you focus equally on three sides of the pyramid. In the case of the wealth pyramid, the three sides denote Necessity, Pleasure (that includes Charity) and Savings (or money saved for a rainy day).
If you have not focused on any of them, the wealth pyramid cannot be created. When you have focused on each of these and have created the walls of the pyramid, then comes the time to fill the pyramid with investment money.
When you know you have enough money for a rainy day (typically 3-6 months of the expenses on a minimum side and 3-6 years of expenses on the maximum side), then you feel confident of taking calculated risks and feel ready to making investments that can yield appropriate returns in the short and long run to achieve your financial goals. You are also better prepared to emotionally handle any economic situation or adverse affect on your investment in this case.
When you are taking care of necessities for yourself and your family, then spending some amount of your pleasure (a dream holiday or a dream car or a donation to a charity) can help you to feel satisfied and fulfilled in life, which drives you to create more wealth. If you spend some money on yourself to please yourself, you start associating positive emotions with money and hence earning money feels more joyful in that case.
Many times, we have beliefs from our past, which are not aligned to create the wealth pyramid. In this case, most likely, one is too focused on one side of the wealth pyramid - earning for necessity, saving for rainy days or spending on pleasure; that the pyramid does not get created. If you are too focused on earning for necessities, start keeping some money for the savings portion before spending for necessities. If you are starting out, the focus is on the formation of the habit, and not the amount of money kept for savings. Similarly, if you are focused on saving too much for a rainy day, start spending a small amount for activities that provide pleasure and contentment. Again, the amount is not important, but the habit is. In this way, you can balance your pyramid and when the right balance is achieved, your money starts to grow creating a big wealth pyramid that supports you continually for necessity, savings and pleasure.
If you want to know how to create this wealth pyramid for yourself, I invite you to attend my LIVE masterclass the coming week. Register for a free ticket here. Or if you want to schedule a call with me to discuss how I can help you grow your wealth, please email me on [email protected].
