A simple and proven financial strategy to success - Part 3 "The X-Curve"

If you missed my article last week regarding financial disaster, I am finally giving the answer to my question. This will definitely clarify things for you if you are looking for a simple and yet effective way to solve your financial problems.

The X – Curve concept of wealth and responsibility



This concept theorizes that a person’s responsibilities generally decrease and wealth generally increases over time.


The figure is comprised of two curves, one from low to high and the other one from high to low. The one from low to high is called the law of building your wealth, which means that when you are young, you have low savings and investments. You have to build up your wealth. As you build it up over the years, hopefully, you have higher savings and investments so that you can retire comfortably.

On the other hand, when you are young, you have bigger responsibility. But this responsibility may go down overtime, if you build the wealth curve. The faster you build your wealth, the faster you can reduce your responsibility. What type of responsibilities do you have when you are young? You may have children to raise, you may be renting a house, or paying off debts. But you can bring your line of responsibility down, if you know how to bring your savings up.

But according to surveys, for most Filipinos, our responsibilities grow instead as we grow older. Many of us start having numerous responsibilities at a very young age (early marriages, acquired debts, several dependents, etc.). As a result, the need to work harder for adequate or higher savings becomes essential as we grow older.

Right now, all our responsibilities and obligations are being provided for because we are working for money. We rely on our income. But we should ask ourselves, is our income temporary or permanent?

How about our needs? If we don’t have money, or if we stop earning money, can we do without food, shelter and clothing? Can we do without providing for our children’s education? Of course not! When our children finish their studies and can already earn a living for themselves, our responsibilities will decrease. When they do not get a job of their own, even our grandchildren will be our responsibility.

It is the same with health. When we retire, even if we have saved a lot of money, health insurances would no longer accept us. It is therefore wise to have savings for when we get old. The problem is that most of our retirees have no long-term healthcare savings and
they end up selling their properties and their savings consumed. It is a fact that in the Philippines, it is hard to find hospitals that will treat you for free if you are not covered by health insurance. Most of us do not plan to fail. We just fail to plan.

We should remember that as we build wealth, we should also take care of our responsibilities. But how do we bring down our responsibilities? How do we work on getting our savings line up? If you want to know more about the X-curve and other concepts related to financial management, financial planning and passive income sources, please feel free to email me at mdvidaure@yahoo.com, or call or text me through mobile no.: 0917-9535265. I will be happy to share to you the ways you can make money work for you.

Part 1: The Problem

Part 2: The Financial Disaster

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