How To Promote Financial Values Across Generations

How To Promote Financial Values Across Generations

In a world that’s increasingly driven by emotion rather than reason, it’s important to instill financial values to help individuals make wise decisions with their money. Teaching these values to the young is especially important because they will carry these lessons with them throughout their entire lives. 

These topics are addressed in today’s discussion:

  • Why is generational wealth so important now?
  • What are the benefits of generational wealth?
  • How can wealth financial planning help build it?
  • Wealth management from Scott Marsh Financial

Why Is Generational Wealth So Important Now?

Wealth has always been a source of power and influence, but the concept of generational wealth has become increasingly important in recent years. “Generational wealth” refers to the accumulation of assets and wealth passed down from one generation to the next. 

This is increasingly important because it provides a foundation for those future generations to build upon. When individuals have access to greater financial resources, they can more easily invest in education, entrepreneurship, and other forms of economic activity. We believe plans to retire in Utah should always include this consideration.

This, in turn, can lead to greater prosperity and opportunity for subsequent generations, who can build on the expanded foundation that came before them. Furthermore, generational wealth can provide a safety net for individuals during difficult times, such as economic downturns or in case of unexpected expenses.

What Are the Benefits of Generational Wealth?

One of the most significant benefits of having a family nest egg is financial security. When you have accumulated enough wealth, you may rest assured of meeting basic needs and covering unplanned costs without having to rely on credit or loans. This can potentially foster a sense of stability and peace of mind.

Generational wealth can also help to strengthen family bonds by providing a shared sense of purpose and identity. When everyone works together to build and maintain their family’s wealth, it can create a strong sense of unity that could last for generations. Additionally, passing down wealth can be an opportunity for family members to come together and bond over your shared values and goals.

It can also facilitate opportunities for philanthropy and give back to the community. Families who have accumulated wealth may opt to use it in support of causes they care about. Whether that means donating to charities, funding scholarships, or supporting local businesses, it can create a shared sense of purpose and meaning.

How Can Wealth Financial Planning Help Build It?

When it comes to building long-term wealth, many investors focus on maximizing returns and minimizing risk. While these are certainly important considerations, they are only part of the equation. To truly build generational wealth, you have to take a comprehensive approach to financial planning.

Comprehensive wealth financial planning involves looking at all aspects of your (or your family’s) financial life. This includes your goals, assets, liabilities, income, expenses, and risk tolerance. By taking a holistic view of multiple factors at once, you can identify potential areas of improvement and create a roadmap for achieving your long-term financial objectives.

There are multiple key benefits:

  • Identifying and prioritizing goals. This might include saving for retirement, funding your children’s education, buying a second home, or starting a business. By setting clear and achievable goals, you can create a roadmap for your financial future and potentially make Million-Dollar Choices.
  • Developing a personalized investment strategy. Once you have identified your goals, you can work with a financial planner to assemble a portfolio that aligns with your risk tolerance and time horizon. For example, this might include a mix of stocks, bonds, real estate, and other asset classes.
  • Maximizing tax efficiency. By minimizing your tax burden, you can keep more of your money working for you by reducing the long-term impact of income taxes on your wealth accumulation. This might involve strategies such as tax-loss harvesting, asset location, and maximizing retirement contributions.
  • Protecting your assets. This might include strategies such as insurance, estate planning, and asset protection trusts. By protecting your savings and investments, you can ensure that they are passed on to future generations in a tax-efficient manner.
  • Monitoring and adjusting your plan. Your goals and circumstances may change over time, so your investment strategy may need to be adjusted accordingly. By regularly monitoring your plan and making course corrections, if necessary, you can stay on track for your long-term financial objectives.

Wealth Management from Scott Marsh Financial

benefits of generational wealth

I mentioned “Million-Dollar Choices” earlier. However, it’s important to note that there’s a common thread among them all, regardless of which type you make. In order to qualify, a financial decision has to be capable of growing your savings into a million dollars or more. 

In other words, you don’t just select an asset, for example, that eventually generates steady returns. The secret of making a truly Million-Dollar choice is often reinvesting your profit to potentially fuel further growth. You don’t necessarily have to reinvest in other stocks if, say, you’ve found a savings account with a nice interest rate, but you have to keep putting part of it back into play. 

Some financial industry professionals refer to this as keeping your “money in motion.” This doesn’t have to mean that you never celebrate gains, say, with a nice dinner, but continual reinvestment might be described as a major secret behind ongoing long-term financial success. 

In the simplest terms, it could be considered a sort of shotgun approach: When the majority of your returns are going back into additional assets, the odds of continuing gains somewhere within your portfolio often increase. There are often more sophisticated strategies deployed, as well, but this is something of a bedrock principle. 

Today’s inflation means that there’s also another benefit to reinvestment. Until our economy improves, the purchasing power of the dollar may continue to decline, even within a bank account. The equity you’ve purchased in your portfolio, however, generally remains unaffected. 

Put another way, if your assets aren’t something that loses value due to inflation (such as fixed-rate bonds), the money you’ve invested into your portfolio should retain its value. Even while $1,000 in cash buys less and less, $1,000’s worth of well-chosen investments tends to hold steady. 

Scott Marsh Financial is a CERTIFIED FINANCIAL PLANNER™ in Utah specializing in financial planning for the affluent and affluent-to-be. Contact us to learn more about our retirement planning for high-net-worth individuals and other advisory services. 

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More about the author: Scott Marsh

Scott Marsh has been referred to as America’s Financial Advisor and Educator. He is considered one of the foremost thought leaders in the financial services industry and hopes to share his knowledge with others so they can create a legacy of financial prosperity. He is the founder of Scott Marsh...