The idea with the Wealth Pyramid is for you to get a clear picture of what Wealth means to you and how you can use the different levels of the pyramid in order to make it happen for you. By laying a great foundation, making it robust and seeing it grow you will be inspired to take it to the next level.
The ultimate goal of the Wealth Pyramid is for you to have a money machine (or several) working for you passively so that you have time to do what you want, knowing that money is always flowing into your account!
This is not the first step towards wealth but I would recommend that you make the Wealth Pyramid a clear part of your goals so that you know where you are going!
The four levels of the Wealth Pyramid
As with any pyramid, the foundation is the most important. By having the base in place, you will not have to worry about money as you know you are standing on a solid foundation (how great would that not make you feel?!)
The wealth pyramid, will unfortunately not happen over night but that is why we call it the wealth pyramid. To reach the first level, I would recommend you to work with our bucket system and make sure that you automate as much as you can, always keeping these steps in your mind. By knowing why you are doing what you are doing and always thinking of different ways of making passive income, you will reach these levels so much faster.
The below picture is from one of our Wealth Sessions which gives you an overview of the four different levels of financial wealth. Read on and we’ll explain the wealth pyramid step by step.
When you have financial security, you have enough PASSIVE income to pay for your basics: rent, food, utilities and transportation for the rest of your life!
Yes, you read it correctly, for the rest of your life!
What does this mean to you? I would suggest you check your accounts now and add up the monthly expenses you and your family have every month. When you have that number in front of you, you know how much money you need every month to be Financially Secure.
When you know this number you can take action because now you know what you want. You want to work on creating different passive income streams which equal that amount you need! You should not focus on working every month to get a salary, spend it all and then work to spend it all again. With this pattern, things will most likely never change!
By knowing how much money you need, you should now spend your time and energy figuring out different ways of how you can start making passive income for you. You might start small with a savings account and that is great, it is a start! The more different streams of income you add up, the more money you will get! The key thing is to start changing the way you currently think into a way which will serve you. If you always do what you have always done, you will always get what you have always gotten… time for a change?
An example would be if you do your numbers and you come up with 2,000 USD per month, then you know that is what you need to cover your basics every month and it equals 24,000 USD per year.
How would you feel if you knew you had a passive income of 2,000 USD coming in every month, never again would you have to worry about rent, food and transportation. I bet that would feel pretty amazing!
So, the questions is what you can do to start building different ways of getting that passive income every month? One is a start but might not be enough and you might have to turn creative but imagine what it would do for you and your family once you get there…
If you could manage to own a property that paid you 2,000 USD after tax every month, that would be one such thing but there are so many more. Check out our Side Hustle Section and post on What Side Hustles are and how to make the most out of them!, as well as our posts on Passive income and why you must care! and Are you making money whilst sleeping?.
When you have reached this level, it will be easier to get to the next one because you will continue with the same habits you have created during this step. The only difference really will be the that the numbers are higher. Your way of thinking and acting as well as your habits will all be the same, you will just scale it up. The more you do it, the easier it becomes and the better results you will have. Still, it is one step at the time but the first one will not be very different to the ones you will take later on. It will be just another step and when you look back, you will realize that your single steps have generated a long path of steps.
Financial Independence is when you have enough PASSIVE income to pay for all your current expenditures for the rest of your life! That would be pretty cool right? You could live the way you are currently living, knowing that passive income would flow in every month to cover your expenses.
I would suggest you do your numbers here as well. The clearer we are with our numbers, the easier it will be to focus on them, ingrain them in our brain, make our subconscious mind and reticular activating system work for us.
Knowledge is partial power but when we take action, that’s when magic happens. I am confident that once you get started and gain some momentum, you will know what you need to do next to reach the next level.
Just imagine what it would be like when you know you don’t have work for a salary any longer. You have enough money to continue living your current lifestyle and if you choose to, you could do nothing else than spending time with your family if that is what you wanted.
I am pretty sure though, that once you get going and realize that this actually works, you will not want to stop. You want to create more passive income but you will become more and more restrictive in terms of how you make that money. You will focus more on the things you truly enjoy so that you can spend your time as you please since money is no longer the primary driver.
Financial Freedom is when you have enough PASSIVE income to pay for all your current expenditures and some extra luxury items for the rest of your life!
That would be pretty amazing, right? Your current lifestyle, plus you add some luxuries every year (you define what that means to you). Again, we are not changing what you do. You just continue doing what you have already started, you just do more and at a slightly bigger scale.
If we were to use the rental property example again. You would maybe go from single unit to multi unit. Basically the same thing but slightly bigger, that’s it. There is no magic recipe, it is just about doing more of those great and successful habits you have created! On that topic, check out this post if you have not read it yet Habits of the Successful and just copy those too!
Financial Abundance is when you have enough PASSIVE income to pay for everything you need and anything you want! Maybe this is your ultimate goal and that is completely up to you. On this level too, I want you to know your number. Some might throw out some monstrous numbers but if you think about it, most billionaires would never spend those amounts of money even if they have the money.
Let me give you an example: Say you want your very own jet and it might be 20 million USD. Most wealthy people don’t own their own jets as they know what they actually cost, not only to buy but to own and run. Many join different clubs so that when they need to fly, they have a jet waiting for them but they pay only for those trips they actually make. This kind of traveling will offer them the same comfort but they might only need 500,000 USD per year to afford this luxury versus maybe an expense of 20 million initially and then 500k – 1 million USD per year to own and run their own jet. Or maybe they own it but then sublet it to others when they are not using it themselves (so it actually pays for itself).
What is my point?
That most of the stuff we think we want, can be achieved in different ways and if we think about those, our number for Financial Abundance will most likely be lower than our original number. The above example could be linked to owning five houses, of which you most likely will use only one for about 80% of the time whilst the others just stand idle and cost you money. Instead you could rent very nice places every time you want to visit those locations. You would still be able to enjoy the same luxuries but that Financial Abundance number would be much lower and hence easier attainable.
Financial Abundance is personal and what it means to you is what is important and you should know your number as well as the others and remember that every step you take will become a path, your path in life!
How to start implementing the Wealth Pyramid into your life
I would actually suggest that you print out the Wealth Pyramid, put it on your vision board and write your numbers on each step. One of these numbers you might want to write on a check and put up there on your vision board too! The clearer we get with what we want, the faster we will get there! A burning desire is the most important principle for success according to Napoleon Hill and his classic book “Think and Grow Rich”.
Your numbers should of course also be part of your goals and be written down in your goal sheet. In this sheet, you can clearly break down the numbers which make them easier to reach. You could start with 10 USD during the first month, just make it obtainable for you but once you clearly see that you are making progress you are starting to gain momentum and then you just keep on going!
Actions to take:
- Make sure you know your numbers for the above levels of the wealth pyramid
- Use our Visions & Goals Section to implement the initial steps
- Read A Burning Desire – so that you know your WHY
- Get a Side Hustle – check out our dedicated section
- Read all our posts on Passive Income
- Indulge in our Wealth Section
- Transform your mind by using our book Money Mindset “Hacks” (get it for free from our Wealth Section)
- Create a winning mindset