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How to Create Wealth That Lasts Generations

How to Create Wealth That Lasts Generations

Take a step-by-step approach to understanding and planning the various considerations to make this achievable.

When South Africans are not looking for means to provide for themselves and their families, they are looking for ways to create generational wealth to ensure a brighter future for their children and grandchildren.

However, it can become overwhelming for someone to figure out how to create generational wealth that will sustain future generations.

Haydn Johns, Head of PSG Life, PSG Invest and PSG Wealth offers advice on how South Africans can create generational wealth.

He says we need to take a step-by-step approach to understanding and planning the various considerations to make it achievable.

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Start with a plan to create wealth

Creating intergenerational wealth starts with a thorough and robust financial plan, Johns says.

He says that asset allocation planning can ensure that your classes and allocations of assets match your risk tolerance and long-term goals. The plan must include retirement income planning as this will build a sufficient asset base from which you can draw an income in your retirement years.

“Being able to receive that income in a tax-efficient way is crucial.”

Another important thing to consider in estate planning is to consider how your assets are protected. and how they will be delivered to your beneficiaries. in a way that minimizes real estate costs and tax liabilities.

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The right products for your needs. of generational wealth

“After establishing a financial plan that includes the vital elements discussed above, matching those goals with the right product and service offering is critical.”

Johns says it’s important to consider a range of mutual funds that will give you consistent performance and help you reach your savings goals.

He advises people to choose mutual funds that offer benefits such as greater diversification across asset classes, regions and investment styles; reduced risk due to diversification; a larger team of dedicated asset allocation experts managing your funds; and access to a wider universe of investments.

READ ALSO: Unlocking the potential of stocks as a way to build generational wealth

The range of products

“You may want to add to your product portfolio over time or consider investing in a variety of different products right away. Check if your provider has a strong enough product offering to meet your needs as they change over time.”

Johns adds that the flexibility of offshore asset allocations allowed under these products must also be considered. Investigate whether there are limits on offshore asset allocations within the products you are considering.

“While such limits may not be an issue in the short term, markets go through cycles where sentiment towards local and offshore asset allocations changes.

“Limits on offshore asset allocation can reduce an investor’s flexibility to switch between local and offshore asset allocation over the long term, which can be important as part of a long-term plan to build intergenerational wealth.”

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