People who could build their wealth from the ground up have so much to lose. One bad investment, one wrong financial move, and everything they built can come crumbling down. Unless they are Bill Gates or Mark Zuckerberg, no one is exempt from potentially losing everything. Successful business people and investors also have so much they need to protect if they have children.
If you could build a level of wealth that you would want to safely pass on to your children and their children, hence turning it into generational wealth, here are some steps you can take to protect and preserve it as early as possible.
Establish an estate plan
Employ the services of attorneys who specialize in this specific area—an estate planning attorney and a real estate lawyer. They can help you draw up plans for the following:
- Drafting a proper will, which puts in black and white which member of the family inherits what property or amount.
- Setting up trusts and naming certain guardians to steward minor children and grandchildren.
- Listing down beneficiaries on insurance policies, pension funds, and other retirement annuities.
- Organize your estate so that everything you own is properly protected and preserved for the upcoming generations. One example is setting up a trust and moving your assets to it so that your heirs and heiresses can earn and benefit from whatever income those assets create, but without having access to the capital.
- A clear exit strategy should you desire to retire from the company, or how the business would be handed in the event of your incapacity or death.
Having all these details sorted out as early as possible will also help your children and their children manage their expectations should the unthinkable—your death—happen.
Keep growing your wealth
No matter how big you think your accumulated wealth is now, you and your family will still benefit from employing strategies that can still preserve it and make it grow. When it comes to growing your wealth, stagnation is a myth. You are either growing your money or burning through it—there is no in-between.
If you genuinely want your wealth to last for more generations, you need to employ the following financial strategies:
- Manage your money well by consulting with wealth managers who can help you understand the ebbs and flows of the financial world and how you can navigate it, especially as we live in a post-pandemic, post-recession world.
- Maintain your assets by keeping every property you own in good condition. If you don’t maintain your properties now, they will decrease in value in the long term.
- Ensure that your businesses remain profitable and have a proper succession plan so that the company remains in the family no matter what happens.
- Make smart investment decisions so that wherever you invest your money will yield better results than inflation.
- Reinvest whatever income your capital generates as long as it is possible.
- Save and keep your income from your assets, and only try to live on them once you retire.
Teach your kids the value of what you’re passing on
If you genuinely want to protect and preserve your generational wealth, then think of your children as the future stewards of everything you have built. You can’t just expect them to be good at financial management and stewarding what you have built; you need to be intentional in teaching them and guiding them towards good wealth management and practices. Here are some ways to teach your kids how to value the money your family has:
- Start them young. Teach them the value of hard work by giving them incentives and rewards when they help around the house or when they get good grades in school.
- Let them know the value of creating generational wealth and the blood, sweat, and tears it took you to get here. Teach them how investing and insurance work and your own philosophies and values when handling money. Don’t hesitate to share the mistakes you have made with them, so they know that there is room for failure as long as they don’t give up.
- As they grow up, invite them to help round the company or business through small tasks like writing notes or helping your employees.
At the end of the day, our greatest legacy is our children, and money is just a way to help secure their futures. When it comes to protecting and preserving your generational wealth, put your kids’ highest good at the center of your goals, and you will never go wrong.