It is often said that the natural state of motherhood is unselfishness. If you are a mother, this statement may resonate with you, because you truly understand the distance you are willing to go to give your children the very best. As you watch your children grow and find their places in the world, it is only natural for a mom to worry about the struggles, financially and otherwise, awaiting their kids in the future. If you have come from a background where money was scarce and you witnessed your parents’ sacrifices to secure your future, you may be mulling the question — how can I ensure that my children do not endure the same financial worries my parents faced?

The concept of generational wealth may have been unfamiliar to you before or you may have associated it exclusively with wealthy families like the Rockefellers, royalty or perhaps an affluent local family from your school. You may have observed that some classmates never had to worry about student loans, accommodations, books, or lunch money. They may even have had impromptu weekend escapes to the north coast, something you might have only dreamed about. Now that you are a working mom or soon-to-be mom, you might be wondering how you can build generational wealth, starting right now, regardless of your current financial situation.

Here are three things to think about to get you started:

Mindset

You have probably already seen the benefits of generational wealth at work in other families. While seeing is believing, it is also important to have the right mindset and believe it is also attainable for your family. Start by cultivating an abundance mindset, rather than one of scarcity. Don’t talk yourself out of believing you can achieve financial security for your family. Remember that many wealthy families started with little to no money. For example, the Rockefellers, a name synonymous with generational wealth, had humble beginnings. John D Rockefeller Sr started as an assistant bookkeeper at the age of 16. But he had an abundance mindset. He had a vision for improving his financial situation. He built business relationships and eventually, the Standard Oil Company in 1870, making him one of the world’s first billionaires! If you have a big idea, like starting a new business or buying real estate, do not be afraid to pursue it. Remember, wealth begins in the mind, so give your idea the attention and nurturing it needs to grow.

Financial Literacy

There is a saying that ‘What you don’t know won’t hurt you.’ But when the “what” is how to manage money and the principles of building wealth, it absolutely can hurt you. If you lack knowledge about personal finance, it can be detrimental to you and your family’s financial well-being. However, the good news is you can learn the principles of building wealth and successfully implement them. Developing a habit of saving and investing, and passing these down to your kids, will give you a foundation to build a solid financial future. You can start by consulting a licensed financial advisor, reading books and finance sections of newspapers, and other resources. Additionally, when the opportunity arises, you can seek information from people who have built generational wealth. For example, Warren Buffett, Michael Lee-Chin, and other successful investors have shared their wealth-building frameworks on
YouTube and other platforms accessible to the public.

If you are not a “numbers person”, or your personal finances are out of control, it will be essential to learn the correct use of money as it empowers you to make money work for you. Financial literacy gives you the ability and confidence to budget, save, invest, and manage and use debt prudently. These skills will help you avoid financial pitfalls and create generational wealth.

Invest, Invest, Invest!

Investing is extremely important for building generational wealth. Saving alone will yield very little (currently, the interest rate on a regular savings account is less than one per cent). The value of the Jamaican dollar has decreased over time, and it is likely to continue doing so when your children come of age. Therefore, to protect the value of your hard-earned money and grow it even more, you need to invest! You invest when you buy financial assets, like stocks and bonds, real assets like land and houses, or by starting a business. These assets, particularly real assets and businesses, often significantly increase the chance of building generational wealth that can be passed on to your children. Although investing can be daunting, its strength lies in the power of compounding which exponentially grows returns on initial investments as they are reinvested, leading to significant growth in wealth over time. These assets can be turned over to your children at significantly higher values than the purchase price. The risks of not investing in your financial security far outweigh the inherent risks in investing, making it a worthwhile pursuit. Therefore, it is necessary to learn how to invest to inflation-proof your finances and build a firm foundation for your children’s future.

In addition to investing in financial and real assets, most moms understand that investing in a solid education is also crucial for their children’s financial well-being and is an essential part of building generational wealth. Investing in education boosts earning potential, fosters financial literacy, and empowers individuals to make wise financial decisions. However, investing in education is becoming more expensive over time. Therefore, one of the best things to do is to start a college fund for them as soon as possible. For example, OMNI Educator, by NCB Insurance Agency & Fund Managers Limited (“NCBIA”), is an excellent investment tool for parents and guardians, allowing them to set aside funds for their child’s education. It is tax-free and awards a grant that can go towards school-related expenses like tuition.

Ultimately, there are several ways to build generational wealth for your kids. Moms wield a profound influence in shaping the financial future of their families. As you embark on this journey of financial empowerment, remember that your efforts today will ripple through generations, leaving a legacy of security and opportunity for your family. By harnessing the power of mindset, financial literacy, and strategic investing; you can lay the groundwork for generational wealth. Seeking guidance from an NCBCM wealth advisor can help you create a customised plan from a pool of several investment options that best fit your risk tolerance, age, and time horizon to get you started on your wealth creation journey.

Kimberley Martin – Assistant Vice President, Corporate Solutions, NCB Capital Markets Limited