Generational wealth: Simple strategies for securing your family’s financial future
By Laurencia Prinzonsky, Sanlam’s Marketing and Communications Manager.
We all strive to give our children the best we can, and building generational wealth is one way to help them on their journey to financial wellbeing. Generational wealth means making smart choices with our money in a way that gives the next generation a stronger financial footing. For many, this is no simple feat – and is often easier said than done. While it’s certainly not impossible, doing so does require forward thinking, many sacrifices along the way, investing wisely and getting the right financial advice.
Some of the small, but powerful, actions that may get you ahead, are to:
Take out a retirement annuity;
Consider investing in a retirement annuity (RA) as a long-term savings vehicle. RAs offer cost-effectiveness and tax efficiency, allowing you to grow your savings over time. In addition, by securing your own retirement savings, you alleviate the financial burden on your children, enabling them to focus on building their own wealth.
Begin setting aside small amounts of money regularly. Even modest contributions can accumulate significantly over time, especially when considering the power of compound interest.
Get an emergency fund;
Building an emergency fund serves as a safety net, preventing you from dipping into your children’s inheritance in times of financial crisis.
Instil financial responsibility;
Teach your children the importance of financial literacy and responsible money management from a young age. By equipping them with financial knowledge and skills, you empower them to make informed decisions and continue building wealth beyond their own generation.
Develop a comprehensive estate plan;
Ensure you get credible advice to better enable you to transfer wealth seamlessly to future generations, minimising tax issues and legal complexities.
Improve your financial knowledge;
Building generational wealth requires more than just accumulating financial assets. It is essential to develop a strong understanding of personal finance and budgeting. Seek out reputable sources of financial information and consider consulting with a financial adviser for guidance tailored to your specific goals.
Remember, consistency and prudent decision-making are key to achieving your generational wealth goals.