Leaving a legacy is about more than money
I COME from a family which experienced generations of poverty – financial and a lack of education. My great-grandparents lived far below the poverty line and could not read or write. Neither could their children, my grandparents. Each generation worked hard to improve the circumstances and opportunities of the next, largely by prioritising education. This has started to pay off, with all the children in my generation matriculating. But we still have a way to go - I am the only one who was able to get a tertiary education and a driver’s license. Generational wealth for us means knowledge and education. I’m determined to safeguard this wealth and build on it.
Traditionally, generational wealth refers to the transfer of financial assets such as investments, stocks, real estate and businesses, from one generation to the next. It is estimated that 70% of wealthy families will lose their wealth by the second generation, often because the next generation is not equipped to manage their inheritance, let alone continue to build on it. Those that can leave a financial legacy must ensure they also transfer the necessary financial knowledge and skills to protect it.
If we only consider generational wealth as the transfer of assets with a financial value, the concept is out of reach for most South Africans. I believe we need to expand the idea of generational wealth to a more holistic definition that goes beyond leaving a financial legacy to include the transfer of the knowledge, values and skills that we have learned in our lifetime. We can use these skills to help future generations safeguard the legacy we accrue. For families like my own, it may take a few generations to see significant progress, but small steps in the right direction are significant and should be celebrated.
Through my family’s experiences and the lessons shared, I inherited invaluable nuggets of generational wealth which we can all learn from.
Your history does not determine the path forward
Our history helps us understand the limitations experienced and challenges faced in the past, empowering us to learn from these mistakes instead of repeating them. The small steps taken by each generation before me ensured that the next generation was better off in terms of education and subsequently, finances. This shaped my values and the steps I take today to pave the way for future generations.
Take responsibility for growing your own knowledge and skills
My grandmother was determined to contribute towards the financial wellbeing of her family, despite a lack of formal education. She refused to be a victim of circumstance, teaching herself skills that could be monetised such as sewing and altering clothes by learning from those around her. She also taught herself to read so that she could understand basics like rental contracts. Through her example, I learnt to continuously expand my personal and professional development. Hard work pays off.
Goal-directed financial behaviour is key, regardless of your financial position
Despite never having much money, my grandparents showed me the importance of planning and being intentional with my finances.
They would ration what little money they had, somehow managing to cater for the needs of their children and grandchildren. This taught me the wealth mindset of being diligent with small amounts of money, understanding that this will pay off in the long term. It’s important to have a plan in place that works toward practical goals like:
Saving enough for retirement, so you don’t have to depend on your dependents one day.
Creating a will, with enough liquidity in your estate, so your beneficiaries don’t have any debt to deal with.
Having an antenuptial contract in place to safeguard and build wealth together.
If we consider this holistic definition of generational wealth, everyone has the opportunity to pursue self-mastery and positive habits that will change the course of their lives – and, possibly, future generations as well.
African News Agency