One of the best tools in building your wealth is learning and understanding how Financial Planning works. And one of the simplest ways to do so is through the use of The Wealth Triangle.
Here is BBW’s Millennial Guide on Learn & Use The Wealth Triangle In Your Financial Planning as a #pictureblog.
We’ve broken down and simplified The Wealth Triangle into three (3) parts:
- Wealth Protection
- Wealth Build Up
- Wealth Distribution
Get the details and know more about each level of The Wealth Triangle as shown on each picture blogs.
You can also set a meeting with us for a Wealth Blueprint Session for free. Just click the BOOK NOW button on our home page here.
Keep living the Brighter Life, Millennial Millionaire! #BeyondBuildingWealth 😎
The Wealth Triangle
To ensure that your wealth will be built strong, start building the foundation while working your way to the top. ☝🏻✨ It’s similar to building a house. 🏠 Make sense, right? 😉
Start With Wealth Protection 👈🏻✨
The foundation of any wealth will start with proper protection. Protection against life’s uncertainties, emergencies, illnesses, disasters and untimely death.
Here are the financial items to get you started with your Wealth Protection:
1️⃣ IMPROVE CASHFLOW:
These means your INCOME less your EXPENSES will your CASHFLOW. (The frequency on how you compute this depends on you, but we usually take the monthly frequency.)
🎯 The goal is to ensure that your income is NOT SPENT on expenses and lifestyle alone and have ENOUGH (or even more than enough) cash flow for you to invest and purchase sound financial products.
“You need to diversify and plan where your income will go, instead of wondering where it went.”
2️⃣ ELIMINATE DEBT:
This pretty much self-explanatory. You have to protect yourself from sinking by stopping the leaks on your ship. Meaning debts are leakages in your finance that stops you from building your wealth.
🎯 The goal here is to PAY UP all your debts ‘strategically’ and bring the balance to ZERO. Take note of the word strategically. 😉
3️⃣ HEALTH INSURANCE:
Have you ever met someone who’s never been sick or ill in their lifetime? None, right? (And no, hindi included dito si Luffie! LOL) Health insurance acts as your blanket when you get critically ill, your investments & savings will not lessen.
🎯 The goal here is for you to get yourself an HMO (these are your Maxicare, Intellicare, PhilCare etc.) and et insured with a Health Insurance policy from a life insurance company.
Usually, your life insurance already has health insurance in the form of riders called Critical Illness Benefit (CIB) and Hospital Income Benefit (HIB).
😉✨ Ask your financial adviser about it! If it’s not included in your current policy, you can always avail of a new policy with solely health insurance benefit.
4️⃣ LIFE INSURANCE:
“When a breadwinner of a family passes away, it takes 10 years for that same family to get back on their feet.”
One of the most important people that you should protect (besides yourself) is your loved ones, your family. You can’t protect them from the heartache and emotional pain but at the very least you can relieve them from financial burden.
🎯 The goal here is for you to get insured so that when your untimely death comes, your family will continue on living without financial burdens just as if you are still there providing for them.
😉✨ Ask your financial adviser about the right amount of life insurance coverage that you should avail based on your needs and goals!
5️⃣ DISABILITY INSURANCE:
Accidents can happen whenever and wherever, that’s for certain. But are you certain that you and your family are prepared for the cost and financial needs when accidents do happen?
In such a tragic event, a person may become disabled which translates to losing or reducing their capacity to work, earn a living and even losing some or all abilities to enjoy daily activities.
🎯 Disability insurance gives you the financial assistance that you and your family needs in such events.
Usually, your life insurance policy already has disability insurance in the form of riders called Accidental Death Benefit (ADB) and Accidental Death, Dismemberment, and Disablement Benefit (ADDD).
😉✨ Ask your financial adviser about it! If it’s not included in your current policy, you can always add or avail of a new policy with disability insurance benefits.
6️⃣ EMERGENCY FUND:
As self-explanatory as it is, this is your fund that is purposed for emergency situations only.
Emergency situations include but not limited to job loss, loss of income, natural calamities (e.g.floods or fires destroying your home), unexpected medical bills, a flat/broken tire, etc.
Mall sales and discounts from online shops ARE NOT EMERGENCIES! Just so we are all clear and on the same page.
🎯 The goal here is for you to start and finish building your recommended emergency fund and put it safely in a bank where it is secured and liquid for you to access.
The recommended Emergency Fund varies from person to person, and as a rule of thumb, your needed Emergency Fund here in the Philippines should be 2 to 3 months worth of your monthly expenses.
If your Emergency Fund surpasses what is recommended, then the excess is HIGHLY recommended to be put in investment vehicles where it will grow and give you profit.
Next Your Wealth Build Up 👈🏻👈🏻✨
When you’ve found your strong wealth protection as your base, you can now move up in building up and accumulating wealth. This simply translates to INVESTMENTS.
🛠⚒ Investments are just tools in growing your income and money, BUT what really matters are your GOALS.
“Money without purpose and goals is money soon gone.” 💸💸💸
You can set up your investment for your Retirement Fund, Education Fund, Personal Fund and even Life Milestones such as international travels, putting up a business or even getting your very own house.
Whatever your goals may be, make sure you define them SMART-ly: Specific, Measurable, Attainable, Realistic and Time-Bound.
A goal is not a goal if it doesn’t have a:
- NAME: What is it?
- PRICE TAGE: How much do you need for it?
- FINISH LINE: a.k.a. DEADLINE. When do you need it?
“Don’t just invest for investing sake, have goals, be specific and set finish lines. If not, they’re not goals, they’re just dreams.” 🎯🎯🎯
Finally Your Wealth Distribution 👈🏻👈🏻👈🏻✨
This is the peak of your life which we would like to call the Golden Years. 👵🏻🧓🏻
This is where you are now enjoying your retirement years using the wealth you’ve built up during your younger years.
And as you reach your passing away age, the plan is to transfer and distribute what’s left of your wealth to the next generation.
“A good man leaves an inheritance to his children’s children,
but the sinner’s wealth is laid up for the righteous.”
— Proverbs 13:22 ESV (English Standard Version)
👨👩👧👨👩👧👦 Wouldn’t it be great to give your children, and your children’s children and so on the BEST CHANCE at life as early as they can?
That’s the goal of Wealth Distribution.
When that time is nearing to transfer your wealth, talk to your financial adviser about creating your Estate Plan!
“Many are the plans in the mind of a man,
but it is the purpose of the Lord that will stand.”
— Proverbs 19:21 ESV (English Standard Version)
We can build kingdoms with our talents, wisdom and wealth, but it is only with God’s plan and purpose can we build empires that will never crumble and will forever last.
Wealth is a great tool to achieve goals and dreams, but never the end goal. For there are far more important valuable things and goals that are beyond building wealth.
Keep living the Brighter Life! 😎✨ #BeyondBuildingWealth