One way to do that is by building a legacy. And you may be surprised to learn that you don’t have to be wealthy to start the process.
What is a Legacy?
First let’s understand what a legacy is. It’s also called generational wealth, and it’s basically assets that you leave behind for your children, grandchildren, or others. It’s passed on from generation to generation, and if invested wisely, this type of wealth will never be outlived or used up. It’s the gift that keeps on giving.
Your legacy can be made up of real estate, investments, or even financial education. You can take steps today to ensure that your family will have a more secure future.
How to Build a Legacy
Many people think they could never build any kind of personal wealth, let alone leave a legacy for their family. However, it’s easier than you might think.
Here are a few tips to get started:
GET YOUR OWN PLAN IN PLACE – The first step is to make sure your own finances are in order. This can seem overwhelming, but it’s easier than it sounds, and a Genistar rep will be happy to help you with a Financial Game Plan.
SAVE AND INVEST – Make saving and investing a priority. Make a budget and look for things that you can cut out and places where you can free up money to save. You can use the Genistar Fat Finder form to help you with this. One of the key principles to building wealth is: It’s not what you make that counts, but what you keep. So, learn to reprioritise your spending habits and pay yourself first.
TIME VALUE OF MONEY – The time value of money is the concept that a sum of money invested today is worth more than the identical sum received at a later date because of its potential to grow in value. If you invest small amounts regularly when your children are young, the funds can grow along with them.
FAMILY BUSINESS – Look at building a family business. This is an often-overlooked way of passing on a legacy.
LIFE INSURANCE – Have the proper amount of life cover. Life insurance creates an immediate estate in case of your premature death.
FINANCIAL EDUCATION – Make financial education a priority. The best way to empower your family is to equip them with financial knowledge. If you have children, or grandchildren, you can change their future by teaching them solid financial principles. And luckily, the principles of financial freedom are straightforward and easy to learn.
Passing it On
Passing on your legacy to the next generation requires the same thoughtful attention and counsel as it takes to build it. There are experts in this area who can help you make the right plan for the transfer of your accumulated wealth.
Some things to consider:
Estate Plan – Set up an estate plan that covers you today and years into the future. As your wealth builds, revisit this plan to make any needed changes.
Wills and Trusts – Get a will that lays out what your wishes are after death. There are also ways to control how the funds are distributed through a trust. Consider putting your life insurance policies into trust. A good estate planner can give you guidance in this area.
List Your Beneficiaries – Make sure all of the proper beneficiaries are listed on your insurance and any other assets you wish to leave behind. It’s better to settle this now rather than having your heirs or the administrators of your estate guessing at what you wanted done. Clarity is the key to your wishes being carried out.
Make Sure it Lasts with Financial Education
Sadly, many people who inherit money view it like a lottery win and simply spend or waste it. I’m sure you’ve heard stories about people who win the lottery and within a few years they are bankrupt. The best way you can prevent your heirs from squandering your hard-earned legacy, is through financial education.
Ensuring that your family receives a proper financial education and teaching them to be smart with money is one of the best things you can do for them. Learning the basics of how money works and passing that knowledge on to your family is the best way of building a legacy and making sure it lasts.