How to create generational wealth and align it with your family values

We live in a time where it is possible for some of us to create generational wealth if we go about it the right way. It is also a chance to instil family values about money and savings from the generations before us.

Duma Mxenge, head of business and market development at Satrix, points out that the generations before us often shape our financial behaviours and while we may want to honour those views, it is equally crucial to choose a path that reflects our personal goals and aspirations.

“As we approach World Children’s Day, it is a reminder that creating generational wealth is not just about financial prosperity but about nurturing values, knowledge and opportunities that can empower future generations.”

With an estimated $84 trillion expected to transfer from older to younger generations by 2045, building wealth can be one of the most powerful ways to honour both your family and yourself, creating a legacy of financial literacy and resilience for those who come after us, he says.

“Wealth is something we build for ourselves and for our future generations. It becomes part of the legacy we leave behind, interwoven with our values, aspirations and the heritage we carry forward.”

Mxenge shares these practical tips to start making generational wealth part of your family’s heritage:

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How to start your generational wealth journey

“Starting early is key to building a lasting family legacy. The earlier you invest, the more time you have to benefit from the exponential growth of compound interest. This step is especially powerful for younger generations, who can take advantage of long-term market gains and build a habit of investing.”

Starting early is about taking advantage of time as it allows wealth to grow and teaches younger generations the value of patience in investing, Mxenge says.

• Start early: Encourage younger generations to begin investing as early as possible. The earlier you start, the more time compound interest has to work its magic, creating exponential growth over time.
• Prioritise diversification: Spread investments across different asset classes like shares, bonds, property and exchange traded funds (ETFs) to reduce risk and provide a more balanced return. This protects the family’s wealth while still allowing it to grow.
• Educate on financial literacy: Make financial education a core part of family conversations. Teaching children about budgeting, saving and investing helps instil good habits early on, setting the foundation for future financial success.
• Leverage tax-advantaged accounts: Use tax-free savings accounts (TFSAs) or retirement annuities to grow wealth over time without sacrificing gains to taxes. These accounts provide excellent vehicles for building long-term financial security.
• Set clear financial goals: Establish measurable family goals for wealth accumulation, such as saving for education, buying a home, or investing in a family business. Align these goals with long-term investments that secure your family’s future.

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How to preserve and grow your family’s generational wealth

To preserve and grow your existing wealth, it is essential to establish a comprehensive family financial plan, Mxenge says. “Regularly review and update this strategy to ensure alignment with your long-term goals. Reinvesting earnings, such as dividends or interest, back into your portfolio allows the power of compounding to keep working in your favour.”

He says focusing on long-term growth is crucial for maintaining generational wealth. “Invest in assets like property, exchange traded funds and equities that appreciate over time rather than engaging in short-term speculative opportunities such as cryptocurrency. Long-term investments offer stability and growth, allowing wealth to pass on smoothly across generations.”

Mxenge also points out that engaging professional advisers can be a game-changer. “Financial advisers, estate planners and tax professionals provide invaluable expertise to help manage your wealth efficiently and ensure that your legacy is preserved.

“Lastly, passing on financial wisdom to younger generations is just as important as passing down money itself. Teaching them responsible money management creates the foundation for a lasting family legacy.”

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Align your money and investing behaviours with your heritage

Incorporating cultural values into your investment decisions can add an extra layer of meaning to your wealth-building journey, Mxenge says. “If your heritage emphasises community impact, you might consider socially responsible investments that reflect those values. For instance, legacy-building investments like education, land ownership, or businesses that align with your family’s traditions, not only create wealth but also preserve cultural continuity.”

Collective wealth creation is another strategy, he says. Stokvels, family investment groups, or trusts allow families to pool resources for larger investment opportunities, keeping wealth within the family and encouraging collaboration.

“Supporting family businesses that reflect your heritage is another meaningful way to grow your wealth. These businesses can be passed down through generations, creating a financial and cultural legacy.”

Let go of unhelpful financial behaviours

In addition, Mxenge says it is important to let go of limiting beliefs that may have been passed down from earlier generations.

“Challenge ideas like ‘money is hard to come by’ or ‘investing is too risky’ and replace them with more empowering narratives. Challenging old money beliefs opens up new avenues for wealth creation. It is about reframing our thinking to see opportunity rather than limitation.”

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Stop the culture of secrecy around money

He adds that a culture of secrecy around money can hold back wealth creation, while open conversations build trust and foster better decision-making. “And if deep-seated emotions or negative behaviours around money are limiting your progress, consider seeking financial therapy or coaching. Addressing these issues can reshape unhealthy financial habits into positive, growth-oriented behaviours.”

Mxenge says by blending the best of your cultural heritage with your own financial goals, you can create a legacy of generational wealth. Smart investments today benefit you and also set your family up for a prosperous future — one that honours both where you come from and the path you choose for yourself.”