I decided to review my progress on the Wealth Pyramid (formally called my Financial Pyramid) that I created below. You can also view the pyramid as levels, and if you come in from the sides, it a step to each higher level.
So far, I’m still at the “Action Plans” level! While I have some of the elements automated (401k, Life Insurance, etc), I’m still working on the non-retirement wealth accumulation part. I’ve been waiting for my tax return to be deposited in my checking account before I start this piece, but that has happened this past weekend. Now I need to focus on where to put that money. Hopefully, I’ll blog about my decision by the end of the month.
Once I get the “Action Plans” level running, it will be a short jump to the Snowball phase, when unfortunately, I’ll be stuck for years. After a few year, I’ll probably start the the Upper Middle Class phase, depending on how well I’m going at the Snowball level.
I don’t expect to get to the Financial Independence level for at least 10 years, and that’s if everything goes well.
Realistically, I don’t even expect to get to the top two levels (Gates and Wealthy), but the picture wouldn’t be complete without them, so I added them just to be complete.
The original post explained each level in greater detail and can be viewer by clicking here.
Below is my Wealth Pyramid, yours might be different!
| G A T E S |
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| Wealthy | ||||||||||||||||||||||
| Rich | ||||||||||||||||||||||
| Financial Independence Break Even Point |
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| Solid Upper Middle Class Life Style Small increase in lifestyle, but Asset accumulation continues |
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| Snowball Effect (or Money Tree(s) growth) of asset accumulation, Interest & Dividends from Financial Assets are crutial! | ||||||||||||||||||||||
| Action Plans for Funding for Retirement, College, Life Insurance, and other financial needs. Increase contributions to financial assets each year |
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| House Paid off, or shelter needs satisfied for lifetime Start of the accumulations of key assets (401k, Roth, etc) |
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| Enough money to provide food, clothes in an emergency Living very, very frugally |
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I like to think of things from different angles, it helps me get a more three dimensional feel for abstract thoughts.
-MR
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I was just looking at your pyramid and I was just curious about something. Are you looking to pay off your house completely before funding retirement/college, or am I misunderstanding?
Kris
Actually I did all at the same time, although my mortgage has recently been paid off…
First I started the bottom one, then I did the next 2 at the same time. Now I’m solidly working on layers 3 & 4.
Hmm, looking at the lower levels, I could have done a better job explaining them… Maybe I’ll add an update trying to explain at least that bottom level a bit better!
Thx!