The Wealth Legacy - Children Challenge
Generational wealth is about preserving your family name. To build generational wealth occurs over many lifetimes. If you were asked, "What is your great great grandfather's name?" many of us would say, "I do not know". The reason is because they did not pass on a family legacy. The reason they could not pass on a family legacy is that they either did not think generationally, or their hearts were not turned to their children and vice versa. When there is a disconnect within families and generationally the inheritance stop flowing and the curse of poverty begins to flow from one generation to another. To build wealth is about building on the financial success of the past generations. That is why it is so important to have families speaking as one and fathers hearts being turned to their children and childrens hearts turned to their fathers so that the blessing and the inheritance can flow from one generation to another. The Medici‖s, Rothchilds, Rockefellers, Kennedys, Marriotts, Rupperts, Oppenheimers and Hiltons (known as old family money) are examples of how generational wealth is passed on. These multigenerational families have passed on several successful businesses known as dynasties. Generational Wealth begins when you erase the poverty mentality thinking and replace it with the financial education of the wealthy elite. This information has been hidden for decades. In the battle against multi-generational poverty, growing evidence has supported asset building as an increasingly important means to provide upward financial mobility and pathways to passing on wealth for a positive economic future.
The Paradigm shift in our nation will take place when we begin to teach our children and youth about generational wealth, becoming rich, what it takes to become rich; teach them about money, credit, debts, savings, investing and generosity. This will give them a head start in life and they will have an unfair advantage in life. We have a choice as parents to ensure that our children will be on the ruling side or on the slavery side being subject to lenders. Most of our young people are heading that way and we can change all that. As a family, we have wealth education sessions, camps and Friday nights dinners with our children where we talk about purpose, destiny and wealth. We teach our children about money from an early age. We also have been running a number of financial literacy talks, seminars, conferences, and coaching as the Mahlobo Foundation. Our focus has been children and young people in Primary, Secondary and High Schools. We provide them with financial coaching and mentoring from an early age.
Here are some of the financial concepts we teach children and youth during these wealth education sessions:
1. Income (Ordinary, Portfolio, and Passive)
2. Expense: Expenses, or Liabilities, take money from your pocket. The number one expense for most people is taxes. Other typical expenses are housing, food, clothing, medical aid, education and entertainment,
3. Assets: Assets put money in your pocket. and there are four basic assets or asset classes:
● Business
● Real estate
● Paper Assets
● Commodities
4. Liabilities: Simply said, liabilities, such as a mortgage, school loan, credit card debts, and car payments, take money from your pocket on a regular basis.
5. Debt: Debt can be a Liability. Debt can also be an Asset. If you lend someone R10 at 5 percent interest, that debt is your asset and the borrowers liability.
6. Capital Gains: Capital gains occur when the value of an asset increases in value. For example, if a share you purchased for R10 a share is trading at R15 a share when you sell it; there is a capital gain of R5 per share, which is taxed at the capital gains tax rate.
7. Cash flow: According to rich dad education, the words Cash and Flow are the most important financial words of all. Until you learn to see cash flowing on a financial statement, you may have a difficult time determining assets from liabilities, and expenses from income.
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