Financial Pyramid: Provision for a Steady Life
How familiar are you with financial planning?
Financial planning and financial planning may often appear in our conversations. if I work in a profession related to the financial sector. Therefore, financial planning is needed by all people. financial planning and can help us set priorities or realize short-term or long-term financial goals.
Our financial planning can seem like a daunting activity but it needs to be done to help me prepare for a more prosperous financial future. How to start formulating a financial plan?
Financial Planning Pyramid to Achieve Financial Goals
Tips on how to help you secure your future finances are called financial planning pyramids. Financial Planning Pyramid is a process that will help formulate financial plans and determine priorities. by adapting to my lifestyle I can build a solid foundation and overcome uncertainty.
Pyramid because by way of the concept of the pyramid as the strongest architectural building that is increasingly conical to the top. with the main rule is to build a solid financial foundation from the bottom, and slowly getting up or conical upwards. Maslow's hierarchy of needs theory, that I must meet basic needs and meet higher-level needs. for financial planning is to build a solid foundation and slowly rise to the top.
There are several levels or levels of the Financial Planning Pyramid, but in general it can be divided into 3 levels, namely:
1. Wealth Protection
Wealth Protection is the foundation part and the most basic level in the financial planning pyramid. It has the largest share because it is allocated to safeguard the welfare of our family against the risks of life. Wealth protection consists of 2 components that should not be missed, namely cash flow and insurance.
cash flow level, I ensure that my cash flow is positive as the basis for a solid financial foundation. we also have to set up a priority emergency fund to deal with future risks.
You need insurance as protection against your own and anticipate things that are not desirable. Insurance in the form of health insurance and life insurance. You already have one of these protections, so you can climb to the higher part of the pyramid.
2. Wealth Accumulation
have a strong foundation, the next stage is the creation of Wealth or Wealth Accumulation is in the middle. This section covers financial goals, namely, regular savings and diversification of investments, at this stage I can increase my wealth by making investments such as precious metals, or stocks in the form of bonds or mutual funds.
maximizing my investment workforce can plan for retirement or create passive income.
3. Wealth Distribution
The highest level of the financial planning pyramid is the distribution of wealth and Wealth Distribution. the tip of the pyramid is planning for the distribution of assets or giving inheritance/grants after my death. The division of inheritance is planned so that there is no dispute between the families left behind. You can consult a notary to start preparing for writing a will.
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