By Carol Mazaka
We all have those traditions that have been part of your family heritage for as long as you can remember - Sunday lunches, bonding over that secret recipe that has been in your family for generations, or even the annual gathering that has been around for years on end - these are treasured moments that form a significant part of your identity – your heritage.
In fact, heritage is an important foundation of family units, passed down and continued through generations. But what happens if you – as the custodian of the family heritage – were no longer around? Have you considered the impact of financial heritage, and what it would look like to create generational wealth and leave a lasting financial legacy for your family?
If so, you’re not alone! In fact, a recent 1Life survey indicated that 91% of SA consumers consider creating generational wealth important and, similarly, 84% mentioned that they are expected to create it. But what do you do if you don’t know where to start? And where can you turn for help?
For starters, we need to understand what generational wealth is – it is the ability to transfer financial and other valuable assets to your children and their future generations.
Why? To ensure that future generations have a better financial start in life in order to break the cycle of poverty and high levels in indebtedness, ensuring they are financially savvy and comfortable, and are able to pass their own wealth down to their future families.
This is the essence of creating a lasting financial heritage, and the most important starting point is financial literacy.
Being financially savvy empowers you to make smart money decisions now that will benefit your future generations. In fact, to truly know where to start and how to make your money work for you, it is important to get financial education. 69% of consumers are optimistic about creating wealth, but we have to shift our mindsets – creating generational wealth starts with me!
Through free financial literacy programmes for example, consumers are able to truly educate themselves on good financial management, getting out of debt and how best to manage their estate, as well as ensuring they have a will in place – all part of sound financial management.
It gives consumers valuable insight into building generational wealth, regardless of where they are starting from. Once you understand the basics, the rest can – and will – follow!
Beyond financial literacy, there are 5 other key pillars to building generational wealth – while a fundamental part, it is more than land and businesses being passed down, other ways include: investing in the stock market, investing in a child’s education and taking out life insurance.
Getting a financial education and taking up a life insurance policy are two of the easiest ways to set your family on a generational wealth path. In fact, imagine the impact a simple R250 life cover monthly premium, for example, may have on future generations.
It may only be R250 to you, but it could become a million rand in your family’s hands when you are no longer around. And there’s no telling what property, businesses, and even educational achievements they can attain through your simple step – thereby continuing the journey of wealth creation.
The smallest of actions can make the biggest change. As custodians of our families’ financial heritage, we should aim to create future generations that are further empowered, financially savvy and, simultaneously, drive down poverty and inequality over years to come.
So, spend some time this Heritage Month, not only celebrating your family heritage but also putting measures in place to help ensure that your family heritage will live on long after you are no longer around.
Carol Mazaka, consumer director at 1Life Insurance.
*The views expressed here are not necessarily those of IOL or of title sites.
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