I recently had the opportunity to sit down with a sixth-generation business owner. During our conversation, we talked about their legacy and what they hoped to leave to the next generation.
Many people feel they are not rich enough or have enough assets to develop a lasting legacy. The truth is, the legacy is about passing on so much more than just about money and assets.
Take my own mother as an example. At 90 years old, she wrote a letter to each of her children, detailing what she felt about each child, some of her fondest memories, and how she feels about their individual accomplishments.
These letters are to be handed to my siblings and opened upon her death. As it happens, I’m the child she entrusted these letters to.
In many respects, these letters are a representation of her legacy. Part of her legacy was being our mother and it’s her way of keeping that legacy alive after she’s gone. I have no doubt we will cherish these letters.
Many of my own clients don’t have millions of dollars saved or tucked away in their retirement accounts. They are conservative investors who work hard to save money over time. When you don’t have significant savings, you may feel you won’t have much left to pass on to the next generation.
If this is a concern, there are a few things to consider. For instance, $250,000 can be turned into a significant sum later on. With $250,000 in an IRA with 5 percent return, you can set yourself up to leave your children or grandchildren some money.
Here’s a possible example: If you only take out the required minimum distributions (RMDs) after age 70 1/2, you would be left with approximately $1.3 million to leave to the next generation, assuming you started with $250,000.
Then the next generation does the same, and so on and so forth. They continue the legacy even after you’re gone, and while this approach isn’t going to make any single family member wealthy, it gives the current generation something significant to pass on. It’s an approach that encompasses the “pay it forward” attitude.
When my wife and I were recently in Florida, we experienced that attitude firsthand. We pulled in line at a drive-thru, and as we arrived, I let another car in ahead of us. When we got to the window, the cashier told us the person in the car ahead had paid our bill in full.
Not wanting to have the courtesy end with me, I chose to pay for the car behind me. I have no idea where it stopped, but I do know there were a lot of happy people that day — myself included. I left the drive-thru with a smile on my face.
When it comes down to our legacy, the greatest gift we have to give is ourselves and our actions. It’s more than just money, property, or other assets. It’s our memories and the example we set for our kids, grandkids, and those yet to come.
As you go forward, think about what you intend to leave the next generation and those you love most. Even as you go about your day, think about the people behind you in line or in traffic. What kind of legacy do you want to leave behind?