Financial Freedom – Part 4: Mind Your Money To Transfer Wealth

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Ok Keepers. I’m hoping that by now you all are a lot wealthier than when we first started this journey together four weeks ago – if not yet in your bank account, then most definitely in knowledge and resources. We’ve since incorporated a few “wealthy words” – as I like to refer to them, into our vocabulary: declaration, discipline, leverage, diversification and patience; and if you are just joining us on this road to financial freedom take a look back at the last three blogs to learn how to best incorporate these principles into your personal wealth building strategy.

This week we are going to consider the concept of mindfulness and intention as it pertains to your own financial freedom and how it ultimately creates a path of transfer and inheritance for future generations.

Initially, when I hear terms such as mindfulness or intention I drift towards an idea of individual practice. I envision myself in a space with the clear opportunity to achieve, receive, and distribute to others what has been given to me, with the understanding that although I would like to think of myself as awesome enough to become immortal, that in reality our days on this earth are in fact numbered. I know, I know – you’re probably thinking that I’m such a killjoy. That I’ve built you up with all of this excitement and anticipation about positioning yourself to possibly grace the cover of Forbes magazine one day, just to only bring you to a point of discussing the morbid side of wealth management.

And I’ll be honest, after working in this industry for nearly fifteen years, it is still apparent that the majority of us do not like to plan for our lives coming to an end. Believe it or not, 30% of high net worth individuals (avg. net worth of $4.5 million or more) do not have a wealth transfer plan. But, the intentionality behind transferring wealth is less about death and more about securing your family wealth for more than one generation; it’s an act of selflessness. Done properly your grandchildren’s children will eat fruit from the trees planted with your seeds.

A wealth transfer plan consists of two sides of the same coin – determining the funding to satisfy your lifestyle requirements and preparing the next generation. You may be wondering why your lifestyle requirements would be considered in a wealth transfer plan; well, simply because these plans are dynamic and can only be created by you while you are living, not to mention you should be able to enjoy the fruits of your own labor – we don’t want a Moses situation going on where you can only get a glimpse into the Promise Land. And as I’m typing this I’m thinking perhaps that wasn’t the most spiritually couth example to use, that maybe I should’ve just referenced MLK’s speech “I’ve been to the Mountaintop” – but, point blank, it would suck not to be able to enjoy the fruits of your own labor, while simultaneously securing the financial freedom for your lineage through proactive dialogue and education.

Whew, enough of that rant.

So what was that I was saying about being intentional? The most important thing to remember during this process is that at each decision point you encounter will consist of someone else’s voice or opinion that could potentially derail you. Redirecting your focus back to your long-term wealth transfer plans will serve both you and your family well and should include the following:

Intentional communication and dialogue – secures the transfer of values

Intentional education – secures the sustainability of wealth

Intentional planning – secures the foundation that your wealth was built upon; failing to plan is planning to fail

Intentional revisiting of your plans – secures current desires are upheld; over time people and desires change

Intentional relationships with advisors – secures the continuity of reaching goals

Keepers, to sum it up, the lack of mindfulness when it comes to wealth transfer ensues a boat load of problems; not to mention family discourse and the effect of sudden wealth syndrome – a very fancy term for how we like to put it “You came up”. Just imagine the scenes in Next Friday after Uncle Elroy and his family won the lotto, moved to Rancho Cucamonga and splurged on everything. Basically, sudden wealth syndrome leads you down a straight path to sudden broke syndrome. Ok, the latter is not an actual financial concept, but you get the point. It’s inevitable.

According to Forbes, over 70% of family wealth is lost by the second generation, and over 90% of family wealth is lost by the third generation. Don’t let that be you and yours. Let’s get to the promise land and stay there.

Comment below on how you’ve been intentional in your wealth transfer strategies.



Photo Source: Pexels

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