{"id":351491,"date":"2026-04-20T05:54:55","date_gmt":"2026-04-20T10:54:55","guid":{"rendered":"https:\/\/www.etrafficlane.com\/60dollarmiracle\/the-secret-to-investing-wisely-understand-the-investment-pyramid"},"modified":"2026-04-20T05:55:00","modified_gmt":"2026-04-20T10:55:00","slug":"the-secret-to-investing-wisely-understand-the-investment-pyramid","status":"publish","type":"post","link":"https:\/\/www.etrafficlane.com\/60dollarmiracle\/the-secret-to-investing-wisely-understand-the-investment-pyramid","title":{"rendered":"The Secret to Investing Correctly\u2013Perceive the Funding Pyramid"},"content":{"rendered":"

<\/p>\n

\"accountant\"<\/p>\n

Let me introduce you to the Investment Pyramid.<\/strong>\u00a0Understanding this pyramid was a game changer for me.<\/p>\n

Decades ago, a wealthy family friend urged me to invest in a Limited Partnership<\/strong>, calling it a \u201can exciting opportunity.\u201d<\/p>\n

I didn\u2019t know that a Limited Partnership was illiquid<\/strong>\u00a0and I couldn\u2019t sell my shares, even as I watched the company go bust.<\/p>\n

When I told my accountant this story, he drew a triangle<\/strong>, divided it into 4 levels, explaining this represented the whole world of investing. My mistake was starting at the top.<\/span><\/p>\n

\"Extra<\/p>\n

He then drew an upside down triangle, resting on it\u2019s wobbly tip.<\/strong>\u00a0\u201cSee what happens when you start at the top,\u201d he explained. \u201cYour portfolio is not very stable is it?\u201d<\/p>\n

My accountant had just given me the secret to investing wisely:<\/strong> start at the bottom and work your way up, level by level.<\/p>\n

Level #1: Cash or cash equivalents<\/b>\u00a0(CDs, treasuries, money market funds, basic bank accounts)<\/strong>. This is\"International\u00a0your safety net. You\u2019ve got cash to cover the unexpected, without slipping into debt. There\u2019s little volatility<\/a>, so you\u2019re not likely to lose sleep worrying.\u00a0The risk: inflation<\/i>.<\/p>\n

Level #2: Conservative stocks and bonds<\/b>\u00a0(solid companies, high-rated bonds, funds with good track records.)<\/strong>\u00a0This level fluctuates more than, say, treasuries, but is very liquid and the returns are high enough to offset inflation.\u00a0The risk: needing to sell in a down market<\/i><\/p>\n

Level #3: More Volatile Investments<\/b>\u00a0(Emerging Markets, Foreign Funds, Junk bonds).<\/strong>\u00a0Appropriate for a small portion of your portfolio, since price swings can be extreme but sure can ratchet up your returns. However, you\u2019ll need a strong stomach and a longer time frame.\u00a0The risk: severe volatility<\/i><\/p>\n

Level #4: Riskiest Investments<\/b>\u00a0(Limited Partnerships, Venture Capital, Hedge Funds, Options, Commodities).<\/strong>\u00a0Gains here can be enormous, but so can the losses, leading to huge fortunes or sudden bankruptcy.\u00a0The risk: ultra high.<\/i><\/p>\n

Entrepreneurs, guess where your business fits?<\/strong>\u00a0At the very top. I worry when women tell me their largest, and sometimes their sole, investment is in their own company.<\/p>\n

I urge everyone to make sure they have a solid foundation of cash in the bank and a healthy retirement fund\u00a0before<\/i>\u00a0they plough capital into their own companies.<\/strong><\/p>\n

How do your investments stack up? Are you on stable ground or do you need to reassess? Share your thoughts in a comment below.<\/em><\/p>\n

\n
\n
\"journalist\"<\/div>\n
Barbara Huson<\/span><\/a><\/div>\n
\n
\n
Barbara Huson is the leading authority on women, wealth and power. As a bestselling author, financial therapist, teacher & wealth coach, Barbara has helped millions take charge of their finances and their lives. Barbara\u2019s background in business, her years as a journalist, her Master\u2019s Degree in Counseling Psychology, her extensive research, and her personal experience with money give her a unique perspective and makes her the foremost expert on empowering women to live up to their financial and personal potential.<\/div>\n
<\/div>\n
Barbara is the author of 7 books, her newest, Rewire for Wealth, was published in 2021. You can learn more about Barbara and her work at www.Barbara-Huson.com<\/a>.<\/div>\n<\/div>\n<\/div>\n
www.barbara-huson.com\/<\/a><\/div>\n
<\/div>\n
<\/span><\/a><\/span><\/a><\/span><\/a><\/span><\/a><\/div>\n<\/div>\n<\/div>\n