How to Protect Generational Wealth

It usually takes decades of hard work and dedication to build wealth to ensure your children have the financial stability they need to pursue their goals. Unfortunately, while the initial wealth of a family may be inherited, the next generation may not be able to carry on the same financial practices.

Various resources can help investors build wealth, but fewer resources can help protect it. Here are three steps that you can take to protect your generational wealth.

Have Conversations

Getting the proper financial conversations with your family can be challenging, especially since money can vary from person to person. This makes it even harder to transfer wealth to the next generation.

Begin the process by intentionally building a deeper understanding of your family. This will allow you to discuss the various aspects of money, such as the value of money, family principles, and budgeting. Having conversations about money should not be a one-time occurrence. It’s important to talk about money with your family regularly.

Start Educating Everyone

Financial literacy is one of the most critical factors when planning a successful wealth transfer. According to a study, the generation that inherited wealth is more likely to spend it freely than the one that earned it. This is why you must educate your family on the proper financial practices.

It is not necessary for everyone in the family to attend business school to learn about financial matters. Instead, focus on providing straightforward education that is relevant to the topic. You can offer various financial education materials, such as videos and books, for your family to use.

Begin Funding

One of the most critical factors you should consider when planning a successful wealth transfer is encouraging your family members to actively participate in managing their wealth. This can involve participating in multiple family ventures and investing in financial markets.

Many people who receive significant wealth do not know how to invest it properly. This is because they tend to approach their investments conservatively. This usually involves large portions of their assets in cash and bonds. Since what they have inherited is often more than they had previously, they don’t want to take on too much risk.

According to experts, advisers can help inheritors build a stronger financial foundation by providing them with the necessary tools and resources to manage their assets.

About Saagar Gupta

Saagar Gupta is the founding partner and fund manager of SG3 Capital, a private investment firm located in Puerto Rico. Since inception in 2015, SG3 Capital has focused on taking a proactive approach to asset management. One of the firm’s greatest strengths is its ability to form strategic partnerships with other firms and individuals who share a passion for finance and helping others achieve their financial goals.

After graduating from high school in Oakland, California, Saagar Gupta got his first exposure to finance at the hedge fund Ascend Capital as an intern. Although he had already enrolled at the Massachusetts Institute of Technology (MIT), Saagar loved the experience so much that he briefly considered skipping MIT and working at the hedge fund full-time. After graduating from MIT with a degree in Electrical Engineering and Computer Science, Saagar worked at Susquehanna International Group where he learned a lot about the finance industry and how to effectively manage capital. In 2010, Saagar moved from Philadelphia to New York City to become a quantitative trader at HAP Capital.

After about four years at HAP Capital, Saagar decided to spend a few months travelling to Europe with his young but growing family. He had several new opportunities he was considering, but the idea to start SG3 Capital came to him while he was in a small town in Italy, and the freedom of working for himself has been life-changing.