107 . How to create a Legacy Wealth...!! and Medici Family of Florence , Italy.

Updated: Oct 28, 2021

Why Money is needed in Human Society ?

Often times, people say that they can live without money. They define money as just one of the tools that enhances peoples living environment. However, in real life, money is a very important matter in peoples lives.

Although the people in history might have lived through the exchange of goods or Barter System and not relying to the value of money itself. Today's modern society could not function without money. Money plays a huge role in the society in variety of ways such as meeting Basic Needs, Wants , Shelter , Taking Care of Education and Health Care Needs etc.

Money allows the people to maintain harmonous relations in Society as Human Relations are economical in nature Money helps people to achieve a better quality of Life and Living Standards , Peaceful Life , Better Education, larger chances of Business Success etc

Money is important because it can help eliminate material wants and suffering – by enabling you to take control of your life, care for your loved ones, and give back to your community.

One Way or Other , Money plays a Central Role in Modern Society and One cannot imagine Modern Life Without Money.

Besides this, Financial Independence is key to Peaceful and Purposeful Life.

What is wealth creation ?

Wealth creation is the process of Saving and Investing in different asset classes where the investments will help in fulfilling key needs. These investments should also be self-contained that can generate a stable source of income, helping one to fulfil their needs and aspirations.

The wealth creation process will be most effective if started early. Starting investments during the early stages of life will give a head start for achieving goals. It also helps in generating higher growth in the long term. This is due to the power of compounding. Power of compounding is a concept that will help in building a considerable corpus in the future. The concept of compounding revolves around reinvesting the returns back into the fund to earn higher growth. Therefore, the longer one stays invested, the higher will be the gain in Wealth.

Lets Deep Dive into Legacy Wealth Creation...!!

For instance, you might be focused on getting out of debt, saving money, or pursuing other financial goals. It may be that creating generational wealth is not on your immediate priority list while you tackle your current finances. But with that being said, you can still build it into your long-term financial goals.

Not quite sure what Legacy or Generational wealth means exactly? Lets discuss exactly what it is and how to build it for your family.

I. What is Legacy or Generational Wealth?

Generational wealth is wealth ( Cash, Stocks, Real Estate, precious metals such as Gold and Silver , Enterprises , Companies , Artifacts and Antique Items etc.) that is passed down through a family for generations. It creates a distinct financial advantage to those that inherit it. However, it tends to dwindle from generation to generation as family members deplete the wealth without replacing or increasing it.

Statistics show that after the second generation, 70% of wealth is depleted, and after the third generation, that increases to 90%. So the lesson here is that not only should you pass down assets, you should also pass down the knowledge and habits that preserve those assets from generation to generation.

If you are able to leave something behind for your children or grandchildren, then you are contributing to the growth of legacy wealth in your family and If every Generation adds to that Wealth One Way or Other and It keeps on Increasing day by day and giving distinct advantage to that Family in Society.

Of course, you may leave many things such as good memories and healthy genetics behind for your family. However, We are specifically referring to the financial resources that you are able to leave behind.

This wealth can come in many forms such as real estate assets, stock market investments, Precious Metals , Artifacts and Antique Items or a financial education to carry forward into the future.

Why is Legacy Wealth important?

If you are starting from scratch with your finances or starting out with a large debt burden, then you should realize the importance of generational wealth.

What if your parents had the ability to fund your college education? This single action could have a tremendous effect on your financial future. Instead of playing catch up to pay down your student loan debt, you could be saving for your first home or your future retirement.

As you continue your personal finance journey, you have likely discovered that it is not always easy to recover from your financial mistakes. What if your parents had been able to offer solid financial guidance as you stumbled your way through ? It could have prevented spending beyond your means or started you on a budgeting habit much sooner.

The more you think about your own financial life, the more you realize how important legacy wealth can be. If you have kids or plan to have kids, then you may start to think about how their financial futures will play out. Imagine how differently things could turn out if you take the time to educate them on personal finance and set up vehicles to add security to their financial future now.

II. How to create and build Legacy Wealth ?

The concept of building Legacy Wealth is easy.

You simply have to acquire assets or save cash that you don’t intend to spend in retirement. Then you pass those assets along to your children when you pass away.

This sounds easy in concept but can be difficult to put into practice. If you are struggling to build your savings, then saving for the next generation can sound overwhelming. And that is completely understandable!

It is critically important to nail down your own retirement savings plan and other financial goals before you start to save for generational wealth. Once you have a handle on your current finances to fund your golden years, then it is time to start saving beyond that.

How should you start to save for generational wealth ?

Here are some of the best ways to start preparing to leave a legacy of wealth behind for your children and grandchildren.

1. Invest in the stock market

The stock market can be a great way to build wealth over the long-term. If you are aiming to build generational wealth, then it is a great option because it has the potential to continue growing for decades.

Investing in the stock market might sound scary if you’ve never tried it. However, it is an important way to build wealth in your lifetime and beyond.

As a stock market beginner, the best place to start is with low-cost index funds. These funds can offer low fees and long-term growth.

You can consider in Investing in Mutual Funds such as Multicap, Midcap and Bluechip Funds etc.

Before investing in Stocks or Mutual Funds, basic research is very important as to how to buy and sell Stocks and Role of Brokerage Firms etc are also critical.

If you are looking for Low Risk and Moderate Returns on Investments, You can consider Mutual Fund Investments.

2. Invest in real estate

Real estate is another major way to build wealth for the long-term. With the potential for steady cash flows in addition to increasing values over time, real estate can be a reliable path to wealth.

The idea of building a real estate empire can be intimidating. But it doesn’t have to be ! You may have already waded into the world of real estate through the purchase of your first home. If you continue to buy properties one at a time throughout your life, then you might be surprised at how quickly your real estate portfolio can grow.

Consider this as an option for building wealth for your kids.

3. Build a business to pass down

Family businesses have the potential for great success. More than 30% of family-owned businesses transition to the second generation. Imagine being able to hand over the keys of a successful business to your children.

Although not all family businesses make it to the second generation, it is possible that yours can. If your interests and abilities align with your children’s, then it is very possible they will want to take over the business you build.

For a great chance of a successful transition, you should include your child in the business from a young age. They need to know how the business operates and how to successfully continue in this business.

Don’t expect them to take over if they show no interest in the business you’ve built. If they are unable or unwilling to take over the operations, then you could consider selling the business to fund generational wealth in another form.

4. Take advantage of life insurance

Life insurance provides the opportunity to protect your family in the event of your untimely death. Without your income, your children might be forced into less than ideal financial circumstances.

If you make the effort to invest in life insurance now, then it could prevent financial tragedy for your children. Plus, they will already have enough to cope with if they lose you.

Particularly, Term Policies in Life insurance can be considered as they will cover only Life of the Main Earning Member / Family Head in the Family and In case of Untimely Death or Any Eventuality, you can use this financial tool to safeguard your family’s financial future.

5. Invest in your child’s education

In many cases, education can provide a way for your children to support themselves. With a college Degree or Masters Degrees or Doctorates , many frequently have the opportunity to pursue high paying jobs that can help them navigate their own finances.

Anyone with better education will always have edge in the Job Market. Although other things in life can come and go, no one can take away your education. If you have the ability to help your children make it through college without any debt, then you are helping to set them up for a brighter financial future than many of their peers.<