Page 28 - Waterfall City Issue 7 July 2025

Waterfall City Finance

stewardship, and promoting financial literacy is not formally taught in most and an understanding of how long-
literacy. schools. While children may learn term wealth is built. It’s never too early
to count money or balance a simple to begin.
This is why I always advise involving budget, the deeper concepts around
beneficiaries early. Let them investing, compound growth, and There’s also a powerful compounding
understand the logic behind your long-term wealth creation are often effect that applies not just to money,
wealth strategy. Familiarise them missed. This is where the family needs but to behaviour. Just as early
with the structure of the trust and the to step in. investment leads to exponential
rationale behind its investments. This financial growth, early exposure to
helps reduce the friction that often Fortunately, in this digital age, we sound money habits results in better
arises when heirs are suddenly faced have powerful financial tools at our financial discipline over time. I often
with responsibilities they’ve never disposal to help bridge the gap. think about the example of the
prepared for. Podcasts, online courses, and even chessboard, where you start with one
AI-driven platforms allow young grain of rice on the first square and
Families are often reluctant to discuss people to learn in ways that suit their double it on each successive square.
financial matters, particularly across preferences. Many of these resources That exponential growth illustrates the
generations. But withholding this explain complex topics in an intuitive, concept of compounding perfectly,
information only makes it harder conversational format, allowing young and it’s a simple, tangible way to
for the next generation to pick up users to interact with them at their explain it to children.
where you left off. Opening up about own pace. It’s also an opportunity
the strategy, purpose, and values for younger generations to share Wealth planning today is increasingly
associated with wealth creates knowledge with their elders by becoming a family activity – and with
transparency and avoids surprises. introducing them to these tools. good reason. It provides advisers and
It also creates space for the older planners with a comprehensive view of
generation to pass on hard-earned We’re also seeing a growing trend the family’s financial position, enabling
experience to younger family members towards values-based investing, more accurate and holistic planning.
– insights that can’t be learned from particularly among younger investors. It also helps ensure continuity. When
books or algorithms. Environmental, social, and governance younger generations are involved in
(ESG) considerations, climate risk, the process, they are far more likely to
Equipping the next generation with and sustainability are now integral uphold the structures and goals their
basic financial tools is essential. Young to the conversation. Families should parents or grandparents put in place.
people need to understand not just engage in deliberate discussions about
what they’re inheriting, but how whether their investment strategy Ultimately, managing intergenerational
money works. How do you draw up a aligns with their values. What does wealth effectively is about more than
budget? What does it mean to invest the family care about? How can those preserving capital; it’s about building
in a share? Where does that money principles be reflected in the trust’s resilience, fostering discipline, and
go, and how does it influence the investment policy? encouraging collaboration. The
economy? What is compound interest, older generation brings experience,
and how does it work to add value? Start small. Regular, modest stability, and long-term thinking. The
These foundational concepts are contributions can serve as an entry younger generation brings innovation,
critical if we want our children to be point for younger members. You’re adaptability, and a fresh perspective. If
capable wealth custodians. not trying to create fund managers you can harness the strengths of both,
overnight – you’re trying to encourage you lay the foundation for sustainable
The unfortunate reality is that financial healthy habits, interest in the process, wealth and a lasting legacy.

26 Waterfall City Issue 7 2025