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Women, even those from traditional family backgrounds in which men were in charge of the big-ticket decisions about the family, are gradually emerging from the shadows and requiring an equal stake in, for example, decisions about how their family’s finances are disbursed. I know the former is the case for many households, but I also ask myself about the “traditional- appearing households”. You know the ones where women were quietly always a part of the decision-making but to those looking from the outside it appeared as if the man made all the decisions. Of course, there were always matrifocal households long established in Jamaica with women essentially the family’s financial controllers, and these women have always acted accordingly, seeing themselves as better guardians than their spouses in preserving their families’ money set-up.

Still, there’s now an even more acute awareness of the importance of the family’s income not simply just stretching month to month, from one pay cheque to the next. Women are gaining more of an understanding that this is not enough. Money needs to grow; tucking it away in an empty sugar can for rainy-day emergencies, is not enough.

Build generational wealth

Generational wealth is wealth that is passed down from one generation to the next, so that parents will pass on wealth to their children, who in turn pass it on to their children, and so, on and so on. This stands in stark opposition to parents who pass down a legacy of poverty and debt to their children, who in turn pass this on to their grandchildren, and so on. And this is what happens if children are brought up in a household where there is never enough, or just enough to cover only the basic necessities.

Do you know anybody who was unable to get a tertiary education because their parents simply could not afford it? This is often because their parents’ parents could not have afforded to send them to college either. Something as simple as a financial mistake could be traced back a couple generations before; say, a great-great-grandfather accruing a hefty gambling bill one drunken night, which left a financial debt burden that successive generations were unable to clear. Generational wealth is a legacy of not just actual assets but also shared wisdom on how to acquire, maintain and grow those assets.

Eliminate the ‘born as a sufferer’ mentality

Generational wealth, also known as family wealth, or legacy wealth, was once thought to be the exclusive purview of super-wealthy families; the Rockefellers in the States, for example, and the purview of about five family names in Jamaica. People with certain last names are not assumed to be poor because their pedigree assures they are born with the proverbial gold spoons in their mouths. Which, put another way, means they are products of generational wealth or, as we say in Jamaica, “their money can’t finish”. Even this belief is foolish, because it most certainly can finish. It can all be lost if not managed properly. I recently received a whatsapp message from a friend that reiterated this point

I was just watching an exclusive BBC interview with founder of Dubai Sheik Rashid al Maktoum, about Dubai, and one thing that caught my attention was when they asked him about the future of his country and he said, “My father was on a camel, I’m in a Mercedes, my son is in a Land Rover, my grandson is going to be in a Land Rover, but my great grandson will be back on a camel.” When asked why, he replied, “Tough times create strong men, strong men create easy times, easy times create weak men, weak men create tough times.”

I see this very same concept playing out before my eyes daily. But what it really means is an opportunity. It says to me you do not have to succumb to your current circumstances and if you have inherited wealth there is the opportunity to be aware that it goes a lot faster than it comes; take the steps required to build upon that generational legacy of wealth.

But, how to get there? How to ensure that your family has, if not the blueblood status of the super-wealthy but at least good financial standing that guarantees future generations will have the wherewithal to buy a home, pursue higher education, pay for an emergency comfortably if the need arises, and of course have a cushion for their retirement years, which, incidentally, are the issues wealth addresses.

One way to create wealth is through investing. Even for women who don’t yet have children, it’s never too early to start thinking ahead for the time when you do decide to.

Invest for the future

If you’re a woman on a personal finance journey to rid yourself or your family of debt, privation or simply the inability to accrue wealth, understand first that putting money in a bank is really saving. That said, though, a regular savings account by itself, while a good start for fostering a habit of saving, will never achieve your goal of building generational wealth. Sure, owning a passbook is doing a whole lot more than your grandmother did, in terms of saving, when she hid a thread bag of loose coins and notes under her mattress. But, let’s face it, the interest earned on a savings account at the end of the year won’t allow you to achieve all your big financial goals or even beat inflation and devaluation. You simply will not preserve your purchase power.

The kind of investment required here is one much bigger in scope. That is, the buying of an asset from which much more money, also known as dividends/interest/coupon/capital gains, can be made. There are many options such as buying a vehicle to “hustle” for public passenger usage, but that tends to have its own unique set of operational problems in this highly male-dominated field, and is often a short-term outlook, especially if the idea isn’t to gain a fleet.

Buy stocks

A good investment option is the buying of stocks. Don’t worry; it’s really not as complicated as it sounds. And, contrary to what you might think, you don’t have to be rich to buy.

A stock is simply a share of ownership in a company, and the person who buys these shares is known as a shareholder. A shareholder has fractional ownership in the company, proportional to the worth of her share. The company must be a thriving one whose value, and therefore its stocks, will increase over time. When that happens, these stocks can be sold for a profit by the shareholder or held to keep on adding profit long-term. Do you see how buying stocks can lay a foundation for building generational wealth?

Next week: How to buy stocks

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