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"Unlocking Generational Wealth: Strategies for Building and Preserving Your Family's Financial Legacy"

 



 

Family day is a time when we take time to appreciate our families. I am grateful to be from a family where I had 6 siblings of which 3 were adopted.  Now with 4 children of my own who all happen to be at home as I write this blog this weekend, I appreciate the blessing but also understand the sacrifices my parents made over the years. I remember my parents sitting at the kitchen table when we were young balancing their check book. Struggling to make ends meet. 

 

Each generation faces similar challenges. 20 years ago, my wife and I had to sell our house that we just built and downsize because the stress of making payments seemed more than ideal. It was tough at the time but now we are so grateful that we went through that time and were able to live in a wonderful neighborhood for the past two decades. As a result of our businesses and opportunities, we have been able to pay off our mortgage and save money for a rainy day.  

 

As you think about building wealth of your own for yourself or for future generations, it is important to have clarity about why you are doing it and how much is enough. Over the years I have talked with many people about why they are investing their time or money in a business or property and each person has different reasons however, some of the key reasons I have come across include: 

 

Financial security - Maslow talked about the need for security as a basic need. The need for people to feel secure in their ability to have enough money for necessities is a motivating factor for many families. Right now, perhaps more than ever, there is a sense of financial insecurity in many families faced with rising costs and higher debt loads. Having the ability to be able to control your income and make enough money to cover costs and get out of debt is a motivating factor for many people. David Ash in his book Simple Wealth discusses how owning a business or a commercial investment can make a huge difference in your ability to get ahead. This sense of security can be a life changing experience for people who constantly worry about having enough money. 

 

Lifestyle:  I have a number of businesses for sale that could be life changing because of their ability to create money year over year but these businesses take money and will take time and effort to understand how they work and learn the rope. Many people think that owning a business is going to enable them to work when they want to take multiple trips per year and enjoy 100 rounds of golf a season. This is very possible but not realistic in the short term. Often building a business is a full-time endeavor until the business is profitable and has staff and systems so that it isn’t reliant on you as the owner. However, as your business or investment is stabilized your ability to live a lifestyle that reflects your dreams becomes a reality. 

 

Social Impact:  Many business owners and investors I know want to make a positive impact in their communities. Despite what many people, especially politicians or government employees might want to believe, the simple truth is that without entrepreneurs our society would fail.  People like you who invest their own money take chances on a business or commercial property and spend money for improvements are the drivers of the economy. You are creating jobs, paying taxes and giving back to society.   Wealth creation enables individuals like you to contribute to causes they care about. Through donations, funding social ventures, or establishing foundations, make a significant impact on their communities and beyond. This social impact cannot be done without profit.  Ensuring that your business and investment properties are profitable is essential to ensuring that you can have a positive social impact. 

 

Family well being and Future Generations. Recently I was talking to a fellow who had a number of businesses who told me that he wasn’t planning on turning over the majority of his wealth to his children. He said that he wanted his children to have to struggle as he believed that through struggle, we grow stronger. Money can provide advantages for our children but it can also prove to be a source of entitlement, dependency, conflict, demotivation for personal achievement. Having a strategy to manage wealth to ensure we avoid these pitfalls for our children can be a problem that might seem distant but could be real. 

 

So How Do We Create Wealth

 

I will not profess to be the fountain of wisdom when it comes to creating wealth, however, "The Richest Man in Babylon," written by George S. Clason offers timeless advice on building wealth through simple and effective principles that you might employ in your life. Here are some of the key strategies for wealth generation and financial success outlined in the book:

 

1. Save at Least 10% of Your Income: One of the foundational principles from the book is the idea of paying yourself first. Before paying any expenses, set aside at least 10% of your earnings for yourself. This savings serves as the cornerstone for building wealth. You might think this is difficult until you actually start doing it.  Putting 10% of your income aside for savings or donations is easy once it becomes a habit.  

 

2. Control Your Expenditures:  The Richest Man in Babylon emphasizes the importance of living within your means. By controlling your expenditures and avoiding unnecessary spending, you can ensure that your savings continue to grow. I know many rich people who are spendthrifts because they know that controlling their spending leads to money in the bank. 

 

3. Invest Wisely: Saving money is just the first step; growing it is next. The book advocates for investing your savings wisely in ventures you understand or seeking advice from knowledgeable individuals. The goal is to make your money work for you, generating additional income. This is where the purchase of investment properties or working with a financial advisor will serve you well. 

 

4. Avoid Debt: I once had a mentor who told me to pay cash for holidays and vehicles and only use debt for sound investments. Clason warns against the dangers of taking on debt that carries high interest rates, which can erode your wealth. Like my mentor, the book advises to live within your means and use your growing wealth to avoid the need for debt.

 

5. Own Your Home: Owning your home is presented as a way to build wealth over time. It not only provides stability but can also be an investment that appreciates in value.

 

6. Ensure a Future Income: Planning for the future is a key theme in the book. This includes investing in insurance and retirement plans to ensure income in your later years, protecting you and your family’s future.

 

7. Increase Your Ability to Earn: The book encourages self-improvement and education as means to increase your earning potential. By learning more and becoming more skilled, you can open up new opportunities for income and wealth generation.

 

8. Protect Your Wealth: Once you've begun to accumulate wealth, it's important to protect it. This means being cautious with your investments and seeking advice to avoid scams and bad investments that can lead to loss. Having lost hundreds of thousands of dollars in bad investments over time, I can assure you that cautious investments make sense. 

 

9. Seek Counsel: The importance of seeking advice from those who are knowledgeable and experienced is highlighted. By learning from others who have successfully grown their wealth, you can avoid common pitfalls and make informed decisions. There is some wisdom in surrounding yourself with people who have traits or skills that you aspire to. Start today by reaching out to someone you would like to know more about and set up a time for a coffee. 

 

Creating generational wealth requires not only strategy but a vision and a clarity about your purpose and use for the wealth. Whether it is to sustain your family, make a difference in the world or have a lifestyle where you can find purpose, your vision is your first step. Once you understand your Why, you start focusing on your How.  

 

Dave Fuller MBA is an Award Winning Business Coach and Commercial Realtor. Dave is the author of the books Profit Yourself Healthy, Pivotal Performance.  Dave is a wealth of knowledge and would love to field your questions. Email dave@businessrealtor.ca

 

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