The Wealth Triangle: A Simple Way to Build Your Wealth (Like I Did)

Why I Created the Money Triangle

Let me tell you a story. A few years ago, I was sitting at my desk, staring at a spreadsheet filled with numbers. Should I keep my money in the bank? Invest it in stocks? Buy crypto? The options felt endless, and the lack of clarity was overwhelming. Should I keep it all in the bank? Invest it in stocks? Buy crypto? It was overwhelming. That's when I came up with a simple system: the Money Triangle.

Not all money is equal: Having money in a bank account is different from money tied up in real estate. Liquidity refers to how quickly assets can be converted to cash without significant loss in value, while risk represents the potential for financial loss. Understanding these dimensions is critical in financial planning because it influences how prepared you are for emergencies and how much flexibility you have to seize new opportunities.

Many homeowners "feel" poor: If they have to pay $30.000 for a new heater, they can't "simply sell" parts of the house - they need cash in order to pay the bills. This is why many people advise you to have at least 3 to 6 months of monthly income as cash in your bank account. Nobody wants to sell his return investment to pay a bill. That simply isn't fun.

The Money Triangle has three tiers:

• The Foundation
• Growth Zone
• Opportunity Zone

The Money Triangle tries to satisfy all needs when it comes to money: Security & Growth & FOMO (Fear of Missing Out). We all want security, but how much security is necessary depends heavily on the type of person.

The Foundation

It's the safe harbor for us to pay the bills and manage life in front of us. It helps to keep us calm and gives us freedom. Having money in the Foundation Zone empowers you to choose which customers to serve (if you are self-employed) or even quit your job if you are treated unfairly.

A buffer of 3-6 months provides peace of mind and prepares you for sudden expenses - like a broken washing machine or an unexpected tax payment. Here, 5-10% of your wealth should be parked. Low return, low risk, low volatility. Save.

The Growth Zone

The second tier of the Wealth Triangle is the Growh Zone: Here we want to make sure our money grows with reasonable risk with reasonable returns. Usually, that's an MSCI World or equal ETF. Investing in an ETF like this will never make you brag on a party about how you got a new Ferarri.

But it also won't make you bankrupt. The growth zone makes sure you feel safe and prepare for your future and retirement. It also focuses on building the house you have always dreamed about. You shouldn't expect high returns here (usually 5-8% p.a. the last 50 years) - but this means your money roughly doubles every 10 - 14 years. This should make something about 50 - 85 % of your money, depending on your risk tolerance.

The Opportunity Zone

The Opportunity Zone is the "fun" and "dangerous" place. This is the money you put into Bitcoin, your friend's company, and high-risk stocks - it equals going to the casino. This money should be considered gone the second you invest it. Not because you will always pick the wrong asset, but to make sure you never invest the money you need. Again, Consider it gone. Usually, 15 - 45% of your money should be allocated here.

The Money Triangle is highly personal: What suits me won't suit you. Over time ,I discovered for that my triangle is:

3% Foundation 82% Growth 15% Opportunity

This means at all times, I am prepared to lose 15% of my wealth in an instant. I wouldn't be happy, but I wouldn't be devastated. I learned this the hard way: I invested 40.000 EUR into a friend's company. They went bankrupt 4 years later. I never got any money back. I never regretted my investment because it was part of my danger zone. This money is treated differently.

Breaking Down My 3-82-15 Approach

The Foundation: Safety First (3%)

Think of this as the bedrock of your financial plan—the portion that lets you sleep soundly, knowing you're prepared for emergencies. For me, it's 3%, but your number might be different, and that's perfectly fine.

This is my "sleep well at night" money. It's cash I can access quickly when I need it. For me, that's 3% of my wealth, but here's the thing—your number might be totally different. That's perfectly okay!

What goes here:

• Emergency fund
• Monthly expenses
• Short-term savings goals
• Insurance premiums

The Middle Layer: Growth Zone (82%)

This is where most of my money goes—into steady, long-term investments. I call it my "set and forget" money. It's not exciting, but it works. Think index funds, reliable dividend stocks, and other investments that don't need daily attention.

What goes here:

• Index funds
• ETFs
• Blue-chip stocks
• Retirement accounts
• Real estate investments

The Top: Opportunity Zone (15%)

This is my "excitement" money—where I take bigger risks for potentially bigger rewards. But here's the important part: I only put money here that I could lose without ruining my sleep.

What goes here:

• High-growth stocks
• Crypto investments
• Start-up investments
• Alternative investments

How to Find Your Own Numbers

Your perfect split might look completely different from mine, and that's exactly how it should be. Ask yourself:

• How much cash do you need to feel secure?
• What are your life goals?
• How much risk can you handle before losing sleep?
• Do you have kids? A mortgage? Other responsibilities?

The Sleep-Well Test

I have a simple rule: if your money setup keeps you up at night, it's wrong for you. Period. It doesn't matter what any expert says—your peace of mind comes first.

Here's my personal sleep-well checklist—a set of principles inspired by lessons I've learned and insights from financial legends:

Can I cover 6 months of expenses with my safety money? This is an important safety net. Having this set right will take you through any market down turn. The famous Benjamin Franklin once said: "I am not concerned with market fluctuations. My peace of mind comes from knowing that my investments are based on sound principles and not borrowed money."

Are my growth investments diversified enough? - I once had a client who invested 600.000 EUR into one investment. What accounted for roughly 75% of the entire inherited sum. Not of my taste, to say the least!

Is my opportunity money truly "optional"? In light of FOMO people start to tend to underestimate their financial needs for a long time. Can your REALLY spare those $50,000 for 3 years?

Making It Work for You

Remember, this isn't about copying my numbers. It's about crafting YOUR own perfect balance that matches your unique situation, goals, and temperament. Your financial journey is as personal as your fingerprint.

A friend of mine earned $1,200,000 through exiting his company. His risk tolerance is much higher than mine. He nearly invested 60% into high-risk investments - and it paid out. He is 5x his investment in 4 years. I honestly admire him for his patience and risk tolerance, but I know this wouldn't fit me. Investing isn't about the highest possible profit; it's also about safety. Otherwise you could easily go to the Casino: High returns, high risk. Would you bet 50% of your money on red? Maybe you need 10% in cash to feel secure. Maybe you want 50% in growth investments. That's all good!

Your Next Steps

1. Calculate your total assets
2. Decide on your safety number (months of expenses × monthly costs)
3. Choose your growth strategy (index funds, real estate, etc.)
4. Set your risk tolerance for opportunities
5. Review and adjust quarterly

The Bottom Line

The Money Triangle isn't rocket science—and that's exactly the point. It's about organizing your money in a way that makes sense for YOU.

Want to know the best part? You can adjust it anytime. Modern tools make this easier than ever—from budgeting apps like YNAB or Mint to robo-advisors that automate portfolio rebalancing. Flexibility is the cornerstone of financial peace of mind. The good thing is that modern apps, banks, and strategies allow one to adept over time:

• You can start with 70% in moneymarket ETF (like a daily money account)
• Later, you can go more into risk and invest 80% into an all-world ETF like the Vanguard All-World
• As your life changes, your triangle can change too

Your Turn

What's your ideal money split? Have you tried something similar? I'd love to hear your thoughts and experiences in the comments below.

Disclaimer: This article is based on personal experience and should not be considered financial advice. Always consult with a qualified financial advisor before making investment decisions.