Generational wealth possible when aligned with family’s needs – expert
“For instance, a recent baseline survey by the FSCA [Financial Sector Conduct Authority] has shown that only 51% of South African adults are financially literate. Without guidance and education, heirs risk making decisions that diminish their inheritance.”
Berry says there are assumptions that wealthy families openly discuss financial matters with their children.
“But studies suggest otherwise. A reluctance to discuss finances can leave heirs unprepared to manage their wealth effectively, making them vulnerable to making poor financial choices. Generational wealth is not self-sustaining; it requires active management, strategic planning and, above all, patience,” says Berry.
“For younger generations, growing up in a digital world provides an opportunity to enhance financial literacy and investment strategies through online platforms, digital financial tools and educational courses on personal finance. By leveraging technology, Gen Z and millennial heirs can gain a better understanding of wealth management and ensure their inheritances last.
“From a macroeconomic perspective, the ongoing wealth transfer could drive economic growth – but only if it is managed effectively. True generational wealth is not just about passing down assets; it’s about passing down the knowledge and discipline needed to sustain them.”
Van Zyl gives tips for building generational wealth:
Understand your cash flow: Change your attitude about budgeting to focus on cash flow. Budgets often bring up feelings of deprivation, but they’re really about being in control of your money. Understanding where your money is going allows you to make informed decisions and take charge of your financial future.
Build strong financial habits: Big goals are achieved through consistent daily habits. Each small action – like tracking your spending, setting a savings routine, or cutting unnecessary expenses – adds up to something far greater. When combined, these habits create a financial foundation that is stronger and more impactful than the sum of its parts.
Start small to stay motivated: Big goals can feel overwhelming, but starting small is the key to success. Whether it’s setting aside a small amount each month or cutting back on one unnecessary expense, these manageable steps help you stay consistent and avoid burnout. Taking on too much at once can lead to frustration and a loss of motivation. Focus on progress, not perfection.
Review and adjust as you build: Plans can change, and that’s okay. Life is unpredictable, and your financial plan should evolve with your circumstances. If something goes wrong or you find yourself off track, don’t panic – take a moment to reassess and make adjustments. Regularly reviewing your plan ensures it remains relevant and aligned with your goals.
Seek guidance from a financial adviser: The best time to start planning was 10 ears ago. The second-best time is now. Consulting with a financial adviser today can help you take the first steps towards a secure and prosperous future. A financial adviser acts as both a coach and a sounding board, helping you clarify your goals, stay accountable and make confident decisions when facing challenges.
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