In the hustle and bustle of life it’s easy to forget why we we work so hard to make ends meet. If you really think about it though, deep down, isn’t all our hard work dedicated to making sure that our children will have a better future? Isn’t it true that we’re really fighting so that our kids will have a better life than we did?
But, I challenge you to take a minute and ask yourself, are you really doing all that it takes to make sure your children will have a better life than you? Will they know the sweet delight of living life debt free? Or, will they be burdened with the weight of living paycheck to paycheck? Will they have to rob Peter to pay Paul or flinch when their phone rings knowing that a bill collector is on the other end of the line?
The truth of the matter is that in order to free our children, grandchildren, and great grandchildren from the financial burdens that are crushing the spirits of most Americans, we must build a financial legacy that will last.
Our greatest legacy is not our accomplishments in life, it’s what we can do to help the next generation – President Jimmy Carter
Simply put, creating a lasting financial legacy consists of three things: Leaving wealth behind to serve as a foundation on which your progeny can build their financial futures; leaving behind the legacy of knowledge so that your children understand how the game of money is played and won; and finally, leaving behind a history of good financial habits that your children can emulate in order to achieve financial success.
Leave the legacy of wealth.
Before you can leave wealth for future generations, it’s important to truly understand what is wealth. You see wealth has nothing to do with income. Income is the money we earn and use to pay the bills and maintain our lifestyles. You can make a $100,000 income, but if you spend $100,000 you’re not wealthy at all.
Wealth, on the other hand, works for us. Wealth is the money and assets that create even more money and assets. The truly wonderful thing about wealth is that anyone can create it, regardless the size of their paycheck.
Wealth can be something as simple as the money earning interest in a savings account or the money invested in a 401K account. Wealth can include income generating real estate such as rental housing units, well located duplexes, or office/warehouse rental units.
It may take the form of stocks which, over the long term, produce income though dividends or appreciation. Wealth may be the intellectual property that we create or acquire like music, scripts, patents, and other proprietary products.
Finally, wealth may come from the small businesses that we create or invest in. In short, wealth is any asset that creates more money or assets.
So how do you acquire wealth building assets? The key is to use a budget to live below your means. Spend less than you earn. Use the remaining money to pay off debt and invest in wealth building assets.
This formula not only creates financial freedom in this life, but will allow you to pass off an inheritance of wealth to future generations.
Leave the legacy of knowledge.
Knowledge is power. It’s what separates those who struggle from those who enjoy unfathomable success. You must know the rules of the financial game in order to win, but unfortunately too many of us are left in the dark.
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Ask yourself, do you know what compound interest is and how it can keep you in perpetual debt? Do you understand what a stock or bond is and how they help create wealth? Do you know how your credit score is derived and why it may be the reason you’re wasting money on everything from your home loan to automobile insurance?
Here’s the truly wonderful thing. You can build a financial legacy simply by taking the time to become fiancially literate, and then passing that financial knowledge onto your children.
Leave the legacy of sound financial habits.
The truth is that we are the sum of our habits. Good financial habits make us, while bad financial habits destroy us. Our children are small sponges, soaking up everything we do. They’ll inevitably inherit our financial habits.
Be honest with yourself. Are you acting as a good financial role model? Do your children see you give in to impulse purchases? Do they watch as you pile more debt onto your credit card? If so make today the day you start builidng your financial legacy by developing the sound financial habits that your children will inherit in the future.
Understand that previous generations worked and sacrificed to provide you with many of the advantages you enjoy today. You owe it to future generations to do the same. Build a financial legacy by leaving your descendants the gifts of wealth, financial knowledge, and sound financial habits.
BMWK, Are you leaving a financial legacy?
Chris Mckenzie says
This is some really good information on creating a family legacy., especially in the black and brown community. Thanks for creating. Chris M