The Financial Pyramid is a visual aid to help understand the necessarily steps to pursuing financial freedom, just like a pyramid it has several layers starting from the base to the tip. If you climb the financial pyramid in the specific order and one level at a time you should have a sound financial plan and be able to weather short periods of financial hardship without jeopardizing long term goals.
Protection
This crucial stage in planning will provide you with a cushion, in case of an unexpected event causing you to dig into your savings or jeopardize your long-term financial goals.
- Life & Disability Insurance
- Will & Power of Attorney’s
- Debt Reduction
- Emergency Funds
Savings
This is the stage most people start their financial plan to gain financial freedom. The purpose here is to build your wealth and diversity of investments.
- Retirement Planning
- Home Ownership
- Mutual & Segregated Funds
- Regular Reserves
Growth
As an extension to the second level, you can start building non-registered investment portfolios and detailed investment strategies for growth.
We will consider;
- Tax-Free Savings Accounts
- Stocks & Bonds
- Mortgage Paydown
Risk
This phase is addressed once you have reached a level where your debt is low or zero, you have enough retirement funds and wealth accumulated in your investments.
- Real Estate