Legacy Planning 101: Steps to Ensure Your Wealth Multiplies

Do you have a family and loved ones? Are you a parent? If the answers to these questions are an obvious yes, then you’ll have to think about legacy planning at some point in life. This is a must, considering how you should fulfill your responsibilities towards your family, which includes securing them financially in the future (even when you are not around). In this context, there are a few steps that you can take in order to multiply and grow your wealth considerably in the long haul. 

How to Grow Long-Term Wealth- Some Vital Steps

A vital part of legacy planning is accumulating sufficient wealth to leave behind to future generations. Here are some tips on how to accomplish the same. 

  • Work out your investment budget first. List your necessary and unavoidable expenditures before deducting them from your income. The money that remains is your budget for investments after factoring in all other needs. 
  • Segment short, mid, and long-term goals—The next step is to list family goals for the short, mid, and long term. This will help you allocate investments accordingly for each of these investment buckets. 
  • Secure your family’s financial future first- Get life insurance with sizable coverage. This should include future inflation, your family’s future household costs, the higher education of children, other goals, and the repayment of your liabilities. This will ensure that they are safeguarded in the event of your unfortunate demise. 
  • Get proper health insurance- Obtaining suitable health insurance for everyone in the family will ensure that your savings and investments are not depleted due to sudden medical emergencies and related costs. 
  • Invest in ULIPs- Unit-linked insurance plans are excellent wealth accumulation options if you have an investment horizon of 7-10 years at least and even more. They will give you tax deductions under Section 80C and also offer accompanying life coverage. You can allocate funds throughout a mix of equity, debt, and balance funds and keep tweaking your allocation based on market movements. 
  • Set up a Dedicated Retirement Plan- You can invest in pension/annuity plans that come with accompanying life coverage as well. These plans help you set up an income stream every month after retirement. This will help you preserve your invested capital/corpus for your loved ones without having to depend on the same completely. 
  • Child Plans are Extremely Important- Separately invest in child plans for your kids, which invest in a variety of financial instruments. In the event of the demise of one or both spouses, your child will enjoy complete financial security and will be able to achieve his/her goals and dreams. 

The earlier you start investing and saving your money for the future, the better. Hence, set up dedicated investments for all your financial goals separately while keeping faith in long-term returns. Patiently remain invested throughout short-term fluctuations and adopt a prudent approach to investments. Start more with equities at a younger stage, shifting more towards debt and safer instruments with age. 

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