There’s something about wrapping a geometrical shape around a complicated subject that makes it more manageable. So it is with financial planning, and the triangle in which its complex dimensions are so neatly contained is the Financial Planning Pyramid.

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The Financial Planning Pyramid is a navigational tool designed to help individuals create sensible personal financial plans. It acknowledges that smart financial planning needs to consider the big picture and not just individual parts in isolation. So while retirement in the sun might be a person’s long-term goal teetering at the top of the pyramid, they first need to navigate a progressive path of shorter-term plans that logically ascend toward it.

In other words, you can’t advance to the next stage until you have fulfilled the one before it.

The pyramid’s hierarchical structure illustrates the maxim that the greater the risk, the greater the opportunity for reward. The higher up you travel, the less firm is the footing, but also the bigger is the potential return.

There are various iterations of the Financial Planning Pyramid on offer, but they all espouse a common philosophy of financial preparedness. As one’s financial life advances and grows in sophistication, income protection diminishes in priority, and wealth accumulation takes its place.

The tool’s useful, too, for the way its logic can be extended across a range of personal circumstances. So whether you are the penny pincher on the city bus or the spendthrift in the Aston Martin, there’s application for your scenario inside the pyramid’s bounds.

Approach the Pyramid from the bottom up.

The Base Level: Debt

A good financial plan builds upon a solid foundation that appreciates the importance of having the basics covered before launching a charge toward the pursuit of grander financial goals.

And so this first level is all about a clearing of the trees for a fresh harvest. In other words: getting rid of debt.

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We’re talking the extraordinary kind of debt, like crippling credit card bills and massive student loans — the kind of dragging liabilities that see folks with subterranean credit ratings struggling to even cover their minimum monthly payments.

And so emergency funds and vacation savings be damned, individuals dwelling at this level of the pyramid need to get a handle on the B word — budget — before they can even fathom advancing to the next. The basics of budgeting are well explained on a whack of sites, and some offer smart, free money-mastery courses — see and — but the essential trick requires establishing how much you have got coming in and making sure it exceeds how much you have got going out.

Next Comes “Protection.”

The guy who’s reached this level of the pyramid may well still have the odd debt to his name, but it’s manageable stuff. And he’s gotten a handle on his expenses-versus-earnings ratio. In other words, he’s above water, but still just one big wave away from crashing into a sea of troubles.

It’s here that preemptive action kicks in to guard against potentially bank-busting calamities. Think death, illness, accidents, job loss and other of life’s uncertainties that can rack up massive out-of-pocket expenses. By undertaking some basic defensive financial actions, individuals can protect themselves against their economic hits.

Yanking yourself above this level requires prudent forethought. Here, investors are reminded of the importance of maintaining a savings reserve; taking out life, liability, health and disability insurance; amassing emergency funds (financial advisors recommend saving between three and six months worth of expenses); creating a will; and continuing along your debt-reduction path. The concept of cash flow is critical at the protection level, so don’t lose sight of your budget.

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The Next Step Up is “Wealth Accumulation.”

Here, having secured a certain amount of security by way of preemptive financial moves, investors can begin to consider a financial future that extends beyond the basics. The person who’s reached this level has more than enough money to deal with his debts, has covered all his emergency needs and now has extra income enough to start investing.

This is the most important layer of your pyramid.

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The individuals at the wealth-accumulation level aren’t as concerned with saving for retirement — outside of IRAs and 401ks — as they are with building a diversified portfolio, assessing their risk tolerance and establishing their investing goals. Here’s where you’d do well to score yourself some investing education, like the concepts of behavioral finance, the principle of compound interest and how to choose a broker. Acquiring this kind of knowledge fortification reassures a newbie investor with an appreciation for the long-range growth of the markets, and furnishes him with the confidence to invest assertively.

The various vehicles in which that investment might take place include savings, retirement funds, education savings, bonds, shares, mutual funds and exchange traded funds (ETFs).

At the Top is “Wealth Distribution.”

At this, the top tier of the Financial Planning Pyramid, we have moved into the surplus-and-succession stage. Here, the efforts an individual has put into accruing wealth during the lower tiers of the pyramid get to be joyfully played out. Having built their wealth to a level that sustains their desired lifestyle, it’s at this pinnacle point that investors consider the particulars of how to most effectively and satisfyingly expend it. Perhaps they’ll buy a new car or a condo. Maybe they’ll start a business or travel the world. Or they might dedicate their fortune to their children, either via college funds or through establishing trust funds whose proceeds might be distributed upon their demise.

For individuals who own their own businesses, succession plans should also be spelled out now.

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And while tax and estate planning need to be considered at every step up your orderly ascent of the pyramid — taxes are facts of life, after all, and their reach is long enough to cast a shadow throughout — they’re particularly critical now, as individuals consider transferring it to the next generation through these means.

At the least, this is when these well prepared investors can start planning their retirement with more intent, and start living their lives without having to suffer the crushing burden of money anxiety.

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