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The Best Strategy for Preserving Wealth

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How did you learn to manage money and understand the value of investing? Did your parents relay to you what they knew about money or did you read books on budgeting and investing in figuring it out yourself? The reality is that many of us did learn through trial and error. An alarming statistic is that in the US only 14 states require a class in personal finance and 20 states require a class in economics to graduate from high school. If you aren’t teaching your family about money management and investing, they aren’t getting it. One of the ways families maintain wealth and pass it to future generations is through financial literacy. Financial education will preserve the wealth of the current generation and onward if you adopt it as part of your family’s legacy.

If you don’t consider yourself an expert in financial literacy, we would like to help take some pressure off of you. Understanding how money works and learning to resist the temptation of spending more than one earns should start at an early age. Even children at a young age understand their purse or wallet being empty and not being able to buy a treat when they go to the store. Not giving in when they have no money and purchasing it anyway doesn’t teach them anything. Even in a crowded store with your child throwing a temper tantrum, some lessons will last their entire life, if you take the time to teach them.

How do you start the conversation with children? By asking them what they think investing is, naming types of investments, and what they want to learn about money and investing. Teaching concepts and terms related to investing, its importance, and managing their money is part of the conversation. If you think about it, this is very similar to how we start the discussion with adults after our initial meeting; what do you know about investing, why is it important to you, and how should we invest so that you can live a more fulfilled life?

Focusing on the importance of math, giving the next generation a look into the world of investing starts with basic Finance 101; the bank accounts for spending and saving, brokerage accounts, and the ‘why’ behind investing. Children don’t always equate that an investment can be anything from a house to a brokerage account being used to save for retirement. If we give our children the basics of money management, we help them develop the best strategy to preserve their wealth, the wealth of their children, and so on. There’s no better strategy to preserve wealth than financial education for this and the next generation.

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.

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