This marks the First milestone of this sharing in Personal Finance Fundamental - the solution !
Since the post of "now Finance Planning starts ...", there is a wealth pyramid built. I want to re-emphasize that everyone's should build their own pyramid. And everyone may use different material to build it.
And I also talk about Life Line - a simple drawing of your life and what you like to do with it. The right shows a person who likes travelling.
I also mention none of the single finance tools, insurance, mutual fund etc are the solutions.
What we want to do is to build a pyramid that help us achieve what we want to do with our lives. Since what we need may change over time, the pyramid we built should be flexible enough to cater for all needs as well.
As such, what you need is your own portfolio - a set of different distribution to different finance tool at a specific point of time. Below is an example.
Whatever your choices are, different finance tool will bring you different return. Depending on your current situation and your need in life, there is a gap. Bigger gap requires bigger tool to cover it, as long as the tool is NOT TOO BIG until you cann't handle it.
This portfolio changes from time to time, if needed. For example, a young man who started working has not much commitment yet so he saves most of his money. Then he wants to buy a house or car, so he increase the return of his portfolio by taking up mutual fund, stocks etc. Below is a snapshot of what I had ...
After that I started my own businesses and the portfolio would look very different than ordinary. Business goes up and down. I was lucky that I started my personal finance planning early so that during the down time of my business, I was able to 'borrow' money from my portfolio to assist my business cash flow challenges.
So I am still alive today :D