By: Laurencia Prinzonsky

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 well being.

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 requires 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.

 

Start saving

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.

 

Laurencia Prinzonsky is the Marketing and Communications Manager at Sanlam