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What is your House of Wealth? and how can you build it?

I first put the concept of the House of Wealth together in the 90s to give a visual idea of where everything fits in to secure your financial future. It shows the foundations required to take control of your financial life, whether you’re looking to pay off debts or invest.

You need the basics in place, because if you start building wealth without the foundations in place and something goes wrong, it can all come crashing down. The reason they’re there is that things happen in life; in the house analogy, if a hurricane strikes, strong foundations can keep things standing. In real terms, if you’re struck down by illness and unable to work, with a solid base in place you’re not going to be destroyed because you have reserves and insurances in place to handle that situation.

the house of wealth will help you plan your finances


Not everybody needs all seven foundations; you can carry some risk yourself, or transfer it to an insurance company for example. But some are universal, and you should put them in place as soon as you’re able to; an emergency cash reserve, a will and a lasting power of attorney are in that category.

The others are up to you, based on your personal circumstances (for example, if you’re single with no children and no debt, you don’t need life assurance; and you may or may not want private medical care if you become seriously ill).

How long it takes you to put foundations in place is entirely up to you – you can sit down and do all of them at once, or you can take months or even years to do it.


Financial security is when you’ve paid off all unsecured debts; and have your emergency reserve in place, which is anywhere from three to 12 months of expenses saved. This is when you start to move forwards and truly move towards the next stages of your own House of Wealth.


I define financial independence as having passive income from various sources that covers your basic living costs (from your mortgage to food to taxes). That might seem a long way off depending on your particular situation, but with the right foundations and security in place, you will get there.

This level is all about building wealth for your future. I’ve focused before on the strategy to achieve this – save 12.5% of your income every month, which means the first hour of an eight-hour working day: pay yourself first!

Using this money to either invest, or overpaying on secured debts such as your mortgage, will move you towards the next level – where your choices are very much your own.


To be financially free – not having to work again, replacing income through investments and covering all lifestyle costs from travel to living as you wish – is where most people dream of being.

But by starting with your foundations, moving up through the levels and building your own House of Wealth, that financial freedom is achievable. Put your compelling vision in place and start your journey today.

How long it takes to reach independence, security and freedom is personal to you. I’ve seen someone go from absolutely nothing to security within 3 years, but that’s extreme and he is one of the most frugal people I’ve met!

The reality is, it doesn’t matter how long it takes you – it matters that you take the first step.

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