Leaving a financial legacy that can help you and your family create and sustain wealth hinges on one crucial factor - Financial knowledge.
Did you know that 30% of generational wealth is due to families having a mission statement and a plan on how to accomplish it? Starting with small financial lessons that can be shared with your loved ones, can help build and maintain a financial legacy long after you have died. Here is where to start.
Start planning
Having a plan is telling your money where to go. It is also a good way to track what is working and needs to change. Think of long and short-term goals, be specific and realistic, especially when it comes to what happens to your assets after you die. Financial planning is essential for anyone looking to start and sustain a financial legacy. You can use an estate planner or financial advisor to help you map out a sustainable plan.
Communicate
The thought of discussing finances with family is something most people skirt around or find distasteful. Financial mistakes have been made due to this, especially when it comes to the managing of finances.
A staggering 70% of wealthy families lose their wealth in the second generation. This percentage increased in the third generation with most families having lost it all. One of the reasons for this is the lack of sharing financial knowledge with their families.
Teaching children the financial basics of handling money can help them when they are adults. Gradually bringing them into concepts such as saving, budgeting, investing, and managing debt are some of the ways you can teach children and family members to build financial wellness that is beneficial towards a lasting legacy. You can find practical tips on managing finances with your family from our financial blogs.
Understand family dynamics
We all have money personalities that control how we see and handle our finances. The same goes for our loved ones. It can also cause problems and fights if there is no set plan in terms of who manages what and who has access to certain finances. Therefore, delegate according to each person's strengths. Having a legally recognised will can also prevent any fights over your assets or how an inheritance should be used. MiWayLife offers Wills that are legally recognised and can help give you peace of mind knowing that your legacy will be protected.
Money management 101
Financial literacy will be a handy tool in your arsenal when it comes to helping you and your family build and maintain financial literacy. Speaking to a financial advisor will give you a tailor-made solution that is suitable to your situation. Knowing how to grow and protect a financial legacy will rely on the financial knowledge that is shared with loved ones. It can also reduce the chances of you or your loved ones making financial decisions that could put you or them in the red.
