What is a financial planning pyramid?

1 min readLast updated February 23, 2024by Unbiased team

A financial planning pyramid can help you organize and prioritize your monetary goals and needs. Discover more about the tool here.


  • Financial planning pyramids organize and prioritize monetary goals and can help you reduce and eliminate debt. 

  • The pyramid is made up of different layers, starting with the most fundamental needs and gradually working up to supplementary needs.

  • Understanding financial planning pyramids can help you create a comprehensive and personalized financial plan.

  • A financial advisor can help you to build your pyramid successfully.  

What is a financial planning pyramid?  

A financial planning pyramid is a conceptual tool used in the finance industry to organize and prioritize a set of monetary goals and needs. The pyramid serves as a visual cue for understanding the hierarchical nature of financial priorities, making it easier to reach financial goals and targets.   

Want to get better at financial planning?

A financial advisor can help you build a financial plan that works.

Creating a personal financial planning pyramid is a great way to get your financial affairs in order. It also empowers you to follow a more consistent and informed trajectory of financial growth.  

There are several layers to building a financial planning pyramid, starting with the most fundamental needs at the base layer (such as emergency funds) and gradually working up to supplementary needs, such as investments.

This guide focuses on the following layers:  

  • Protection and insurance  

  • Debt management  

  • Stable, low-risk investments  

  • High-risk, high-yield investments  

By understanding more about financial planning pyramids and how to use them, you can construct a comprehensive financial plan that’s tailored to your exact needs, budget, and personal goals

A financial advisor is best placed to help you create an all-inclusive financial plan. They can help you navigate the financial pyramid and put a plan in place to help you meet your financial goals. Connect with an advisor with Unbiased.

What are the different layers of the financial pyramid? 

There are four main levels to a financial planning pyramid.

Each one represents a different tier of financial progress or growth, starting with foundational tiers that secure your baseline financial needs and progressing upwards to speculative activities that facilitate growth on a larger scale.  

The idea behind a personal financial planning pyramid is that it illustrates which financial matters you should focus on most, working through your needs one by one in order of priority.  

As you ascend the pyramid, your debt reduces, and your assets grow, helping you to accumulate wealth more consistently and stably.  

Layer 1: Protection

The first and most foundational layer of a strong personal financial planning pyramid pertains to basic financial security.

Every sound financial plan should be rooted firmly in accessible liquidity and protection against unexpected crises or damages.  

  • Emergency funds for a sudden loss of income, unexpected repairs, medical emergencies, etc. 

  • Insurance for health, auto, property, life, disability, long-term care, retirement 

Before you can focus on growing your wealth, you need basic financial security, and that is what these protective varieties of insurance and emergency funds can provide.  

Layer 2: Debt management

Over 340 million Americans carry some form of debt, many of whom won’t be able to pay it off in their lifetimes.

However, by taking personal debt management seriously and committing to a robust repayment plan, you can achieve financial freedom. 

Addressing the following common debts is a core element of any functional financial planning pyramid:  

  • Mortgages  

  • Student loans  

  • Credit cards  

  • Auto loans  

  • Personal loans  

Even the most insurmountable debt can be eliminated with a personally tailored repayment plan and a clearer understanding of your finances.

Both of these are made easier through the use of a personal financial planning pyramid.  

Layer 3: Investments for financial stability 

Investments for financial stability, also known as core investments, are low-risk investments that focus on stable outcomes and diversification for the sake of consistent wealth generation over time.

Looking into safe investment options is a great way to ascertain more financial security. Some options include: 

  • Real estate 

  • Bonds  

  • Fixed deposits  

For those who are new to investments or want to exercise more financial caution, a low-risk investment is always a good place to start.  

Layer 4: Speculative investments 

A speculative investment is an investment that carries a high level of risk and a high potential for reward.

Once you have achieved a sound level of financial security, you will be in a better position to make high-risk, high-reward investments that offer greater potential returns, such as:  

  • Cryptocurrency 

  • Commodities 

  • Venture capital 

  • Foreign exchange (Forex) trading 

  • Emerging market stocks  

While they are an excellent addition to your portfolio, speculative investments are reserved for the pinnacle of the financial planning pyramid because they are only viable when you have a robust financial cushion to fall back on.

The more experience you gain with high-risk investments, the more financially savvy and prosperous you can become.  

How can I build my financial planning pyramid?

Building a financial pyramid for financial planning can be stressful, but only when you go at it alone.

Obtaining the help and guidance of a financial advisor is one of the best ways to create a personalized financial plan that works for your budget, income, and projected financial targets.  

Working with an SEC-regulated, qualified financial advisor is crucial for effective financial planning. Get matched with an advisor from Unbiased today to start building your pyramid and expedite your financial growth trajectory.

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Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.

Want to get better at financial planning?

A financial advisor can help you build a financial plan that works.