Leaving behind a legacy, not just for your children, but for future generations, is a serious concern–especially when it comes time to balance your finances and determine your next steps. Legacy wealth is about everything from retirement contributions and education accounts to purchases like a Rolex that can be handed down for generations.

Look at your legacy building like a pyramid. Each block that goes into the foundation and construction of that pyramid is a short-term goal that becomes part of the greater overall whole. On its own, each little decision might not seem as though it will make a huge difference. Long-term, however, your wealth management decisions can be the difference between a large, detailed pyramid and a much smaller one. Some stones are larger than others. Some go on the inside, where it might be harder to see their impact immediately. Ultimately, however, the goal is effective, well-thought-out planning so that you can keep your foundation straight and the stones uniform. That is, make effective wealth management decisions that will help you achieve your long-term goals for the future. 

The right wealth management decisions for you–and your plans for your legacy–could be different from someone else’s. As you consider your wealth management goals, you should carefully determine your objectives and how they fit your vital “foundation” for the future. 

  1. Rolex vs. Savings: Is the Heirloom Important?

Having a Rolex–or another heirloom item–is very important to many families. A Rolex is something that can be passed down and worn with pride. It’s an amazing object to pass from father to son or otherwise incorporate into a larger family legacy. Years from now, your child may remember you wearing that Rolex during some of their most memorable moments, from high school graduation to their wedding–and they’ll look forward to the opportunity to do it themselves.

Sometimes, that heirloom is more important than immediate savings. You may find that the money you can set aside in savings will not have as much long-term impact on your family wealth. Other times, however, you may want to consider how you want to manage those long-term savings–and which immediate decision will have a greater impact on the legacy you want to build.

  1. 6 Months’ Savings and Its Growth Value

Most financial planners will note that you should have at least six months’ expenses set aside in savings in case of disaster. That money should be readily accessible so that you can draw it out quickly in the event of an emergency. That six months’ expenses in savings, however, is worth so much more than that. It can compound into the seed for a much larger legacy. 

  1. Savings on Your Taxes Can Impact the Future

Depending on your annual income, the IRS may require that you pay a large percentage of that income each year. Making decisions that allow for tax savings, however, can increase the seed of your legacy and ultimately put you in a better position to set your heirs up for success. 

  1. Building Your Business: A Legacy for the Future

Investing in your business, whether small or large, is an amazing way to build your family’s legacy. While it may leave you with less disposable income in the short term, building your business now means a larger income over time. It helps you seal your legacy, whether you choose to sell it in the future or pass it down to your heirs so that they can enjoy the benefits of all the work you have put into the business over the years.

  1. Buying Life Insurance Offers Protection for Your Heirs

Life insurance is a critical way to protect your family in case something happens to you. If you’re relying on your income for the next twenty or thirty years–or your input in a business–to protect and grow your family’s legacy, if you die unexpectedly, your family may not have the funds they need to maintain that legacy. Life insurance helps protect your family and your future, setting them up for success financially even if you aren’t there to help.

  1. Creating an Estate Plan is a Structure for Your Legacy

An estate plan helps designate what will happen to your estate after your death. It helps provide for your heirs, from setting up trusts that minor children can access as adults–or that can help funnel assets to the future–to ensuring that your assets get distributed according to your wishes. Set out a clear plan to structure and execute your legacy, avoid conflict, and help your heirs in the future.

  1. Creating a Roth Account for the Kids can Mean Setting Them Up for Success

Setting up a Roth account for the kids can help set them up for future success. In many cases, they can end up as millionaires by the time they’re forty. This simple choice is an incredible way to set up a legacy that will have your children prepared for the future. With a Roth account, they may be able to retire earlier or know that they have money to fall back on when they retire. Since children have so much time for interest to grow in those accounts, even minor contributions now can make a huge difference for their future.

  1. Buying Life Insurance for the Kids: Personal Family Financing

Buying life insurance for your kids helps ensure that you are financially protected if something happens to them, but it can also help set them up for success. It can help ensure that they can get the life insurance they need to protect their families in the future and, for many policies, build actual cash value that will pay out in the future. Make sure you talk to an accountant about the right policy for your family.

Setting up your legacy is so much more than bringing in a high income for your family. It’s also about the smaller financial choices that you make every day. Do you want to learn more about how to protect your family’s legacy, including saving on your taxes? Contact us today for more information.