4 Strategies of protecting family wealth for generations.

Currently, there are so many court cases of family inheritance. However, family wealth has made relatives become criminals. They are committing all sorts of crimes in order to have a share of the family wealth. In addition, it is quite usual to hear that a brother murdered his brother to have a greater share or to have access to family wealth. It hurts when you realize that your hard work will not be passed into the right hands. Worse things happen, like auctioning properties of great families, or court cases over sharing assets. Obviously, no parents would wish this to happen. However, here is a guide on how to protect your wealth for generations.4 Strategies of protecting family wealth for generations.

1.Education.

Education does not necessarily mean taking your children to schools of the affluent and earning several degrees. Charity begins at home. Children tend to learn practical examples from their parents. Definitely, due to the struggles of making more money, maybe you are rarely at home or you are just absent parents. What your kids learn is that money is bad, because money deprived them of having their parents around. Additionally, education includes:

INTRODUCE money to your children at an early stage

If your children make money, let them be accountable for every cent used. Moreover, this knowledge will prove to your kids that money is not easy to earn. Also, they will work towards being better. You can also check; How to teach children on money management.

Reading financial books

If your children love books introduce them to financial books very early. This will help them not to make huge financial mistakes when they get into the field. Reading will prepare them for future business. Clearly, experience is the best teacher, but they will be confident because they know what is happening.

Being an example

Children can be taught many things. But practicing what is heard is not easy. They particularly tend to emulate those who are raising them from what they see. If you are a spendthrift, and your children don’t change their mindset they are likely to be spendthrifts too without a doubt.Unless, by good luck, they learn from your mistakes.

2. Good financial planning

Good financial planning is very effective in running a family business. It helps in carrying out business operations within the family. You can easily account for your total earnings.

Importance of Financial Planning

Financial planning is essential for the success of any business enterprise. Its need is felt because of the following reasons:

It helps avoid wastage of funds

Financial planning estimates the precise requirement of funds which means to avoid wastage and over-capitalization situations.

It Helps in Fixing the Most Appropriate Capital Structure

Funds can be arranged from various sources and are used for long term, medium term and short term. Financial planning is necessary for tapping appropriate sources at appropriate time as long term funds.

Helps in Investing Finance in Right Projects:

Financial plan suggests how the funds are to be allocated for various purposes by comparing various investment proposals.

Helps in Operational Activities

The success or failure of the production and distribution function of a family business depends upon the financial decisions as the right decision ensures a smooth flow of finance and smooth operation of production and distribution.

Base for Financial Control

Financial planning acts as basis for checking the financial activities by comparing the actual revenue with estimated revenue and actual cost with estimated cost.

3. Invest in assets

For family wealth to last for decades you should focus on investing on assets. Assets are things or investments that will add value to your business.

Useful assets to invest in

Rental Properties

Millionaires have been made through owning rental properties and real estate. People continue to build their wealth through ownership of property as well. A lot of risk and money is involved in this venture. If you want to maintain your properties for centuries ensure they are maintained often. Repair them and implement modern technologies to make them up to date.

By owning rental properties, each month you can collect a nice rent check that pays down your mortgage.

You can buy apartments, duplexes, houses, vacation homes, and use services like Airbnb to make money off your property. This will be a nice inheritance for generations to come.

2. Owning a business

Well-known businesses were started by individuals, it can be a restaurant, a clothesline, a factory, an online store, or just any other business that you can open branches all over the world. If one mentions, Amazon, Cocola, or Mac Donalds everyone can tell what it is. As long as you guide your children on how to operate your business, it will run for centuries.

3.Real Estate Assets

This consists of purchasing a home or multi-unit property and marketing to tenants to earn rental income over time. Rental properties can be included here, because they offer the opportunity to generate steady rental income over long periods of time. By hiring the right property manager, you can ensure your rental property runs smoothly—without a high level of involvement on your behalf.

Real estate can be in the form of land, residential housing, air space, mineral, water or fishing rights, commercial or industrial properties. What makes real estate such a special asset class is that it has all the markers for a generational wealth asset. It’s hard for real estate to be affected by inflation.

Other assets that can serve your family are collectibles like vintage, vehicles, wines, antique furniture, farm, timber and precious metals like silver and gold.

4.Insurance

Life insurance can help minimize estate, gift, and income taxes when your assets are transferred to your heirs while providing a lump sum of cash to your beneficiaries when you die. Additionally, other forms of insurance, such as property, casualty, and liability, offer protection against many legal challenges. If you’re in a profession that tends to be highly exposed to liability and frivolous lawsuits, ensuring that you’re properly covered can be a prudent first line of defense.

Both friends and thieves welcome the opportunity to spend someone else’s money. Someone who earns their wealth is much more likely to protect it than someone who inherits it. Teach your children not to flaunt wealth. Read 4 Strategies of protecting family wealth for generations.