When we talk about wealth, it’s often in the context of immediate goals: buying a house, saving for a holiday, or creating financial freedom. But there’s a bigger picture many of us tend to overlook – the legacy we leave behind. I’m not just talking about the dollars in your bank account. I mean the whole package: your values, your money mindset, and the financial habits you pass down to your kids and grandkids.

Let’s face it, nobody wants to be remembered as the one who squandered their wealth, or worse, left a tangle of debts for their family. We all want to be the wise grandparent whose wise words and savvy money moves echo through generations. But how do we get there? How do we ensure that our financial legacy is something to be proud of?

Firstly, let’s debunk a common myth: building a legacy isn’t just for the wealthy. Whether you’re living paycheque to paycheque or sitting on a nest egg, you have the power to set a financial precedent for your family. It’s not about the amount; it’s about the mindset. The truth is, a healthy wealth mindset is the cornerstone of any lasting financial legacy. And guess what? It’s never too late (or too early) to start building one.

A wealth mindset is more than just being positive about money. It’s a deep understanding and respect for the role money plays in our lives. It’s about making informed decisions, being mindful of where your money goes, and understanding the long-term impact of today’s financial choices.

Think about it. What lessons are you passing on to your children when you budget wisely, invest carefully, or even talk openly about finances at the dinner table? You’re teaching them that money isn’t a mysterious force that controls our lives, but a tool that, when used wisely, can provide security, comfort, and opportunities.

But here’s where many of us trip up. We either avoid talking about money because it feels taboo, or we swing the other way and obsess over it.

Now, you might be thinking, “All this sounds great, but where do I start?”

Well, the first step is to take a good, hard look at your own financial habits. Are you living beyond your means? Do you have a plan for your money, or does it just slip through your fingers each month? Are you setting aside anything for the future, or are you just hoping things will work out?

The answers to these questions aren’t just crucial for your financial health; they’re the building blocks of the legacy you’re creating.
And if you don’t like the answers, it’s time to make some changes.

Remember, the goal here is to in-still values and habits that will empower your family for generations to come. It’s about writing a story that you’ll be proud to pass down – a story where money is a force for good, a means to an end, not the end itself.

So, let’s roll up our sleeves and dive into how we can build a financial legacy that’s worth inheriting. It’s not just about securing our future; it’s about shaping the future of those who follow.

1. Defining Your Financial Values: The first step in establishing a legacy is defining what matters most to you. Do you value education, home ownership, or entrepreneurial endeavours? Understanding these priorities is key because they shape how you manage and allocate your resources. Start by jotting down what you want to be remembered for financially. Is it the scholarships you funded, the business you started, or the family home that became a generational asset? It might be a holiday home at the beach that the entire family gathers at every Christmas or it could be a passive income trust that gives the next generation the freedom to choose what work they want to do.

2. Communicating Your Values: Once you’ve defined your financial values, the next step is communication. A legacy is only as strong as the understanding of those who inherit it. Open discussions about money should be a regular part of family conversations. It’s not just about telling your family about your assets but educating them on the values that guided your financial decisions. Whether it’s over dinner or a family meeting, create a safe space for these discussions. This doesn’t only have to happen whilst your children are young, as your children grow up having these conversations are vitally important. At Wealth Mentor we have many parent/children units learning how to invest together, create financial freedom together, fund each others deals and embark on their own unique wealth journeys together.

3. Setting an Example: Actions speak louder than words, and this is especially true when it comes to financial habits. Demonstrate the values you wish to pass on through your actions. If you value frugality, showcase this through smart spending and avoiding unnecessary debts. If investing is important, involve your family in investment decisions or discuss your strategies with them.

4. Estate Planning: It’s never too early to start estate planning. This is where you make legal provisions for distributing your assets according to your wishes. Work with a financial advisor or a lawyer to draft a will, set up trusts, or explore other estate planning tools. Estate planning ensures that your assets are distributed as you intended and reduces the potential for conflict among heirs. Make sure your heirs know what you want to happen with your assets, bring them in on your vision, have them help you work towards that vision whilst you are still alive and encourage them to continue working towards that vision when your time does come.

5. Teaching Financial Skills: A part of legacy building is ensuring your heirs have the necessary skills to manage and grow the wealth they inherit. This might involve teaching them budgeting, investing, or the basics of running a business. Consider setting up savings accounts for younger family members or involving older ones in family investment decisions as a practical learning experience.  Share the resources you are using to learn, the books you are reading, the podcasts you listen to and the trainings you are undertaking. Get them involved in your property deals, ask them to help you find your next property deal and get them to help you with the numbers and due diligence.

6. Charitable Giving and Philanthropy: Your legacy can extend beyond your immediate family. Philanthropy and charitable giving are powerful ways to leave a lasting impact on the community and causes you care about. This might involve setting up a scholarship fund, donating to a charity that resonates with your values, or volunteering your time and expertise. What are you passionate about and what impact are you making during your lifetime, plus how can your estate continue that impact once you pass?

7. Continual Learning and Adaptation: Finally, understand that building a legacy is an ongoing process. Financial markets and laws change, and so might your family’s needs. Stay informed, adapt your strategies, and keep the lines of communication open.

Building a financial legacy is about more than just accumulating wealth; it’s about setting a foundation of values, education, and practices that will benefit your family and community long after you’re gone. It’s a journey that requires thought, planning, and active participation, but the end result is a legacy that enriches the lives of future generations.