The X-Curve is a helpful financial concept because it correlates age (time), wealth (money), and responsibility in a single picture.

Imagine two curves. The first curve starts from a lower point and moves upward - this is the wealth curve. The second curve starts from a higher point and moves downward - the responsibility curve. At their intersection is the crossover point, which we'll call the Wealth-Responsibility Crossover.

Through this illustration, we can imagine how our wealth and responsibility change over time.

The Responsibility Curve

The Responsibility Curve shows that our responsibilities are greater when we are younger and gradually decrease over time.

It's like how our responsibility can be greater once we enter the workforce due to the weight of familial obligations. Then, once you start your family, the responsibility will remain high. However, the responsibility curve starts gliding down as your family responsibilities are shared and your children become independent.

However, different families can have different responsibilities, so this curve will not look the same for everyone.

The Wealth Curve

The Wealth Curve shows that our financial capacity and stability are lower when we are younger and gradually increase over time.

For instance, fresh graduates in entry-level jobs will earn less while having more responsibilities. However, as you get promoted or increase your income, savings, and investments, the wealth curve starts moving upward over time.

You'll know you made it once your investments start working for you.

The Wealth-Responsibility Crossover

There will be a point in time when your Responsibility and Wealth Curve intersect, which we'll call "The Crossover."

The idea is that your responsibility will be less relative to your wealth at some point in the future. Or, to put it another way, your wealth is much more than your responsibilities. So, we must achieve this point as early as possible.

The sad part about this crossover is that not everyone has reached this point. Many older people never reach a financial status where their responsibility decreases so they can live comfortably, like when they continue supporting their adult children.

One strategy to achieve this crossover is to find ways to improve your Wealth Curve while younger to compensate for your increasing responsibilities.