When you’re trying to plan for your financial future, you’re going to get a lot of advice from people who may not be in the same place as you. Figure out which stage of planning you need to focus on with the above Maslow-like pyramid.
As finance blog Money Under 30 explains, every stage of your long-term financial planning is built on the previous one. Without cash flow, you can’t very well do much investing. Building your future is all about starting with a solid foundation:
Proper financial planning takes into account the whole picture and not just a piece. Saving for retirement might be your current goal, but if you don’t have a plan for emergencies, that goal can get derailed in a second and and kill any dreams of sipping margaritas on the beach.
Enter the Financial Planning Pyramid. As you work on your finances, think of building your wealth as a pyramid. A good financial plan builds upon a solid foundation and enables you to reach your goals even in the face of life’s uncertainties.
As with just about any pyramid model of priorities, you don’t necessarily have to focus on just one level (you can have insurance while still having a low cash flow), but the stability of each layer should probably come before the one above it. Read more about the individual levels at the source link below.
On the Road from $US0 to a Million, This Simple Pyramid is Your Map; What Level Are You On? [Money Under 30 via Rockstar Finance]
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