THE X-CURVE CONCEPT

Law of building wealth

Law of decreasing responsibilities

Big Big
Income=Temporary Living on Interest
Resp. Savings
FOOD EDUCATION FOOD EDUCATION

SHELTER HEALTH SHELTER HEALTH

CLOTHING DEBTS/LOANS CLOTHING DEBT FREE

INCOME (ACTIVE) INCOME(PASSIVE)

You work hard for the money Money works for you.

No No
Savings Resp.

b. Live Too Long c. Get Sick

PROTECT YOUR PROTECT PROTECT

FAMILY YOURSELF YOUR MONEY

(Life Insurance/Money) (Investments) (HEALTHCARE)

Income replacement Living on Interests Avoid debts

YOUNGER OLDER

a. Die Too Soon

 The X-Curve Concept

This concept basically simplifies our personal financial plan. The law of building
wealth and the law of decreasing responsibilities. It tells us that we must take care of our
responsibilities while building our wealth. A person’s responsibilities generally decrease and
wealth generally increases over time.

X-curve involves 2 lines that run to opposite directions. The left side is our younger
years and the right side is our older years. During our younger years which probably is where
we are right now, this is the time where we usually have big responsibilities and also the
time that we need to work hard to earn money. Our income usually goes to our basic needs
such as food, shelter, clothing, and this is also the time that people usually get married so we
have to take care of our children’s education, health care and sometimes we get to have
debts or loans. The red curve as shown at the left side is our responsibility line which should
be decreasing as we get older. Our responsibility should have been fulfilled by the time that
we grow older. During our younger years usually we have no savings and our income is only
enough to cover our responsibilities. The blue curve as shown at the right side is our money
line and we should have big savings at this point and money should be working for us,
meaning we are living on interest. Our income is passive and we don’t have to work for it,
our money is working hard for us. This should be big enough to cover our food, shelter,
clothing, education, health and our loans.

Another problem while in the process of building wealth is facing the 3 ifs in life.
What if we die too soon? We are not only building our wealth for us but for those that
matter to us. In that sense, we should be thinking of our protection or life insurance. The
insurance