It takes financial fortitude and expertise to create an enduring family legacy, but maintaining it can be even more of a challenge. Despite obstacles, it is possible to increase and retain wealth across generations. Simply stated, it takes more than just family financial awareness. This article from Fortune provides tried-and-true strategies used by wealthy families to preserve their wealth.
Here are some important principles to consider:
Cultivate a Business Mindset
Applying sound business principles to manage family wealth is crucial to achieving long-term financial goals. When using a business mindset, family members function both as investors and beneficiaries.
Take a business-minded approach to managing income, assets, expenses, risks, and strategic investments. Though individual family members may have specific functional roles, make sure to keep other family members informed.
Promote Financial Education
As presented in Fortune, data shows ‘that 70% of wealthy families lose that wealth by the next generation.’ It shouldn’t be a surprise… Educating children and youth is crucial to maintain and grow the family’s generational wealth.
Talk about finances with children and youth. Give them opportunities to practice sound financial principles of saving, investing, spending, and giving on a scale appropriate to their age. Provide them with other educational resources that align with family goals. This will help them grow into the future wealth managers that they need to be.
Commit to Future Investments
Creating and preserving multi-generational wealth requires foresight. If wealth is not growing, it’s likely declining. Combat the factors of expenses, inflation, and taxation, with passive income, proactive tax planning, appreciation, interest.
Actively growing family investments toward larger goals fuels the fire and helps overcome potential smothering dangers. Appreciation and potential cash flow make real estate a strong investment within your estate plan. There are always bigger real-estate deals for your growing investments down the road.
Foster Open Communication
When it comes to family investments and achieving financial objectives, it’s difficult to over-emphasize the importance of open and clear communication.
Schedule family discussions about assets and finances to avoid misunderstandings and disputes that could undermine financial stability. Encourage each family member to share their ideas and goals to promote positive dialogue and a sound culture of saving and investing.
Nurturing Family Prosperity
Creating a multi-generational financial legacy requires deliberate investments and coordinated effort. With careful planning and the right partners, you can provide the foundation of stability and growth that will bless your family for generations. We would love to help.
Contact Real Property Management Northern Utah to learn more about earning a passive income and achieving financial freedom through real estate investments. Our team works to keep things simple so you can focus on what matters most. Call us today at 801-546-1770.
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