Just to quickly recap, in Chapter 3, I wrote about the need to save for payment of school fees. I explained how payment of school fees should never be an emergency as the due dates for payment of fees are determinable from the date a child is conceived. I concluded that saving for education, when started on time, should not be difficult. Once one starts saving for education (or anything for that matter) at the right time, one can avoid financial strain and the challenge becomes that of maintaining the savings discipline over an extended period of time.
Creating a lasting financial legacy means leaving wealth behind to serve as a foundation on which the next generation (typically your children or loved ones) can build on and sustain their financial future. Saving for this purpose, however, needs to be buttressed by appropriate financial education on the part of those for whom the savings are being made. I am sure we are all too familiar with how inheritances, especially the most liquid, like cash and bank balances, have been squandered by the beneficiaries. This is always heart breaking considering the sacrifices that would have been made by those who would have worked hard to build the savings. This is why, in some instances, some savers may eventually opt to invest in physical assets which are more difficult to liquidate.
Building a financial legacy is indeed a long-term strategy that is aimed at building financial assets that outlive the saver. Contrary to common perceptions, creating a financial legacy is not the preserve of the rich. With enough discipline and focus, it is possible to build financial resources for future generations even for people who do not consider themselves well to do.
Building a financial legacy should be a priority for people who are concerned about the quality of life of their loved ones that may not have the capacity to look after themselves due to challenges such as disability or long-term medical conditions. The ability to build long term financial resources for these purposes gives the saver peace of mind knowing that their loved ones will continue enjoying good quality lives when they are no longer there to fend for them. It also eases the burden on those that will look after such persons.
I am not sure whether you have realised that opportunities normally present themselves to people who are perceived to have made it already. One salesman justified his fancy car because he found out that people were willing to listen to him once they realised what car he drove. According to him the better the car you drive the bigger the deals that you are invited to participate in. This is the same with people that have built large savings for the future. Great ideas or opportunities are offered to them first to consider before they are shared publicly. This is why wealthy people have found it easier to make the next million even when they may not be the ideal partners for the project at hand. By creating a financial legacy, you are empowering future generations for more opportunities.
Think about the many stories about wealthy people who left large financial resources to support charitable endeavours. Yes, there are many wealthy people that have already donated as much as 99% of their wealth to support charities such as orphanages and research on certain types of diseases so that future generations may leave a more comfortable life. There have also been donations to initiatives that save the environment for the benefit of future generations. These new areas have become a big motivation for saving for future generations.
While this is a great and noble idea, savers are also warned about the risk of ignoring themselves while focusing on the next generation. Sceptics are adamant that future generations have their own lives to live! I am sure this is a never-ending debate, after all that is what makes mankind fascinating. However, there is no doubt that building generational wealth is not a bad idea for those that want and are able to do so as it allows the next generation to focus on wealth expansion which is much easier than wealth origination.
In summary, there are many reasons why one should aim to create a financial legacy. Here are 5 key ones;
1. Living a quality life when retired
2. Creating financial stability for your family and loved ones
3. Creating a sense of pride for your family and those around you
4. Giving the next generation a financial advantage.
5. Building resources for social responsibility initiatives that support humanity
Most of us desire to be remembered well into the future and building a financial legacy is one way of achieving that.
I end this chapter with a quote by Robert Kiyosaki who said “It is not how much money you make but how much money you keep, how hard it works for you, and how many generations you keep it for”
Talk to your banker or financial consultant today on how to create a financial legacy.
Author: Ralph Watungwa
BAZ President
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