Legacy can be defined as: 1) Law: a gift of property, especially personal property, as money, by will; or 2) Anything handed down from the past, as from an ancestor or predecessor. However, neither of those definitions encompasses the extent of what it means to leave a legacy, either of money or of more intangible lessons and values.
The preservation of legacies is a complicated subject. But to get you started, here are a few of our tips about building a family legacy through wealth planning and communicating family values.
How to Preserve Your Financial Legacy
#1: Start saving early – and teach your children to do the same.
Saving is the first step down the path to wise investment. Financial advisors agree that the earlier you start saving, the easier it will be to reach financial security and be able to pass money on to your children and grandchildren. This is why it is important to teach your children the value of saving their money early on in their lives.
As part of this step, you will also need to learn to control your own spending. In today’s culture, many people’s lifestyles extend beyond their budget and income. Be countercultural, and let your children see your thriftiness.
#2: Invest in your financial education.
No one starts out as a great financial investor, but everyone has to start learning somewhere. Begin taking courses, reading books, and researching financial topics now. The earlier you start learning, the less your learning will cost you, because you will be able to learn based on small investment decisions, rather than large ones.
#3: Diversify your investments, and minimize your trading.
Whenever you start investing, be sure to diversify your investments, because despite the many claims out there, no one can know for sure which companies and stocks will do better. Minimizing your trading is also a good idea, in order to minimize costs and taxes and to ensure that you are making thoughtful investments. Warren Buffett recommends viewing your investments like a punch card – every time you make an investment, your card is punched. What if you had a lifetime allotment of 20 punches? How would your investment decisions change?
#4: Find the best long-term investment program for you.
You are a unique individual, and your family is a unique family. The investment program that is right for someone else may not be right for you. Take time at the beginning of your financial investment process to get to know yourself financially. Consider your financial resources, your spending objectives, the number of years you will likely have to invest, etc. Then make a plan for how to best use your resources and time.
How to Preserve Your Legacy of Values
#1: Walk the walk, and talk the talk.
Living your values out in your daily life is an important step in imparting those values to your children. Values that you only talk about will never stick. However, don’t underestimate the benefits of talking with your children about your beliefs and values either. Putting words to the reasons you act the way you do will help solidify those lessons for your family.
At FamilyArc, we believe one of the best ways to share those lessons and values with your children is through telling your stories. A 2013 article from the New York Times presented evidence for the idea that children from families with strong family narratives are more resilient and have a strong “intergenerational self.” Children who know their family stories realize that “they belong to something greater than themselves.” Start sharing your stories with your children now to help them grow in their awareness of your legacy.
#2: Involve your family in your giving.
If generosity is an important value to you, then involve your children in your giving process. Share stories about how generosity and giving have changed your life. Allow them to help you choose which organizations to give money to. When they are old enough to accept the responsibility, set up donor-advised funds in their names and allow them to begin giving to various causes and organizations for themselves.
#3: Encourage your children to ask questions.
If your children or grandchildren are still young, they won’t understand everything about your finances or values right now. But keep the lines of communication open by encouraging them to ask questions. Look for ways to explain processes through examples that will make sense to them. Take the appropriate opportunities to sit down with them and begin explaining your finances or your passion for certain values. And if they aren’t ready to hear it yet, wait a few years and try again. Or better yet, write them a letter or series of letters explaining these things.
#4: Live your life.
Make a plan for passing on your finances and values and act on that plan, but then live your life in the here and now instead of worrying about the future. Get adequate sleep, proper nutrition, and regular exercise. Do something fun with your family. Invest in your spouse, children, friends, and business associates. In the end, providing your children with an example of a life well-lived will be the most powerful tool for preserving your legacy.
Wealth planning is a huge part of building your legacy. But we believe it’s about so much more than financial inheritance. It’s your beliefs, your values, your traditions, and heritage. It’s the memories your children and grandchildren will treasure for generations to come.
FamilyArc works with families (like this one) to ensure the preservation of everything that makes up their legacy. Our team of professional archivists provide a range of services, including photography, videography, photo digitizing, photo organizing and storytelling. Fill out the form below to speak to a FamilyArc representative, and learn more about how we can help you too.