Have you ever heard about trust funds? Here’s a popular definition, money set aside for your future kids to use when they are of age for whatever they want to. In all actuality, trust funds are more than that, they are not limited to investing for kids and not all of them allow your kids to use the money kept how they please, trust funds are a great way to set aside non-taxable income to ensure generational wealth.
Another myth that follows the knowledge of trust funds is that only rich people can do it. Then I ask, how will you build generational wealth therefore improving the livelihood of your children and grandchildren if you believe that you only need to have money to better their chances at a wealth that grows?
Elon Musk, Tesla CEO, Billionaire, business mogul, yes, I know you know this guy, many people do. But do you know the child who was bullied? Who was born in South Africa and lived with his dad whom he didn’t really like after his parent’s divorce? Elon said, “I think it is possible for ordinary people to be extraordinary” and this is precisely because he was. To move from the ordinary man with constant financial hold ups to the extraordinary, you need to first build determination that you can.
You cannot build wealth and continue to grow it, not just for yourself but for the future generations if you do not envision it. First you need to see that it is a possibility. Next you need to make moves to make this possibility possible.
Here is an amazing way — INVESTING.
Investing over a long period of time accrues great interests in the form of compound interest. Compound interests works this way; interest accrues on interests. It’s not very easy to explain finances in the simplest of words but everybody deserves a good knowledge of finance to master money and not vice versa.
Below is a simple breakdown of compound interest for an investment of N120,000 (N10,000 monthly) over 11 years. You will notice that the balance after the duration (11 years) is N2,408,509.97. Now your 11 year old is a millionaire, imagine your 18 year old? Just from a N120,000 investment every year!
Investments are a wiser way to save money for the future knowing that cash that does not grow is bound to lose value overtime so make sure your money is doing the walk alongside you. For yourself and for your family to come. You are working hard, you do not have to be doing so all your life every single day. Treat money like a game that you have already won. Invest now.
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