1. The Wealth Pyramid

1. The Wealth Pyramid

This guide is the direct sequel to the Fundamentals: Managing Personal Finances For Life. In my view, one's financial success should be measured by how much of what I call the Wealth Pyramid that person completed rather than the amount of money they accumulated. If a person became rich by winning a lottery, I don't consider that financial success.

The Wealth Pyramid consists of three layers: Beta, Beta Plus, and Alpha. These are nothing but risk-reward categorisation, and each of your investment initiatives will fall under one of them. Beta is the lowest risk with the lowest returns and Alpha is the highest risk with the highest returns. The size of the layers depicted in the pyramid doesn't represent the amount of money invested in each layer. Meaning the Beta does not have to hold the most amount of wealth. However, it does define the priorities you should have. I am a risk-averse person and hold a significant portion of my wealth in the Beta layer.


Beta is the safest, the least rewarding and also the most passive. This layer is the safety net, the permanent storage, and is entirely self-growing at a slow pace. The investing guidelines mentioned in the Fundamentals: Managing Personal Finances For Life guide are for building this layer. For example, one of the ETFs said in the guide was FTSE All-World High Dividend Yield UCITS ETF (VHYL). As you can see from the linked page, it is an ETF that is massively diversified across

  • 1,776 companies worldwide
  • Across multiple continents / regions
  • Across many countries
  • Across many industries

Whenever you experience some successes in any upper layers, you should always take some of their profits and transfer them into the Beta layer to store and forget.

Beta Plus

Beta Plus has two semantic parts: Beta and Plus. This is because it is still passively managed investments (Beta) with some active effort at the start and during the maintenance (Plus). This guide focuses mainly on my investments and experiences in this layer. This layer is also where it will start to differ for each individual based on their interests, expertise and investing philosophy.

Beta Plus is the second in the prioritisation after Beta, and its size should be well balanced with Beta depending on your risk appetite. I started with a balance of roughly 80% Beta and 20% Beta Plus. However, since the Beta Plus generally returns more, it has outgrown my Beta over the years. I plan to rebalance this by selling some of Beta Plus and transferring more to Beta in the coming years.


Alpha is the layer where you are truly challenging yourself with very risky investments to gain exponential returns. Even if the investments are passive, if they are inherently very risky assets like Cryptocurrency, they would be considered Alpha. Following are some examples of investments that could be regarded as Alpha.

  • Cryptocurrency
  • NFT
  • Day trading
  • Hand-picking individual stocks
  • Starting your own business

As mentioned previously, in this guide, I will only cover the Beta Plus layer.

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