Investing for their Future
generational what?
One of the numerous things parents think about is their children’s future. They work on how they would feed, clothe, educate and train their children to be good members of society. Some go beyond that and try to ensure their children have a financial head start by investing in their future before they are born.
How do you invest for them?
The greatest legacy one can leave their children is a good education. Ultimately, your child should benefit from a good education within and outside the formal setting of schools and other learning institutions.
Beyond education, setting up investment vehicles for them will help them in the future. This should also not be without teaching them financial education because the nest egg will only get squandered without it.
Investments like stocks, real estate, educational trusts etc are ways to invest for children.
It always pleases me when I read about parents planning their wards’ investments before they are born. To begin with, it doesn't have to be a large amount; it only needs consistency and cautious management. This is to ensure that the benefits of compounding work and that the money is not invested in “assets” that are not sound.
Another way beyond buying investment assets is to let your children learn about your business if you have one. Let them understand how the business is run. Giving them hands-on experience in working and managing the business is a way to prepare them to manage the business without you.
How you go about investing for your children differs from person to person. However, parents and young adults who intend to have kids should consider investing for their children, too, as this is how generational wealth is built.
One amazing way to protect your wealth and have the people you want to benefit from the wealth you leave behind is through estate planning.
Estate planning is planning how one’s assets are managed and distributed in an orderly and profitable manner. Estate planning will be discussed extensively in a future issue. Before then, you can listen to this pod episode on estate planning.
Readings
Understanding Stocks — minus the maths
I love this, absolutely correct, that why the Chinese are able to conserve family wealth. Participation of the children in thei family business.
Great piece!