As one of the most successful investors in history, his track record speaks for itself. However, his wisdom goes beyond picking stocks and making money.
At this year’s Berkshire Hathaway annual shareholder meeting, Buffett shared several pieces of financial advice but also provided insights on the importance of personal growth and estate planning when seeking to grow wealth. While many of us may feel overwhelmed by the thought of estate planning or building our wealth, Buffett’s advice reminds us of two key, but simple steps we can take to create financial and generational wealth.
Focus on Investing in Yourself to Build Your Wealth and Your Legacy
In almost every interview Buffett has given regarding investment advice, he stresses the importance of investing in yourself. “The best thing you can do is to be exceptionally good at something,” said Buffett. “Whatever abilities you have can’t be taken away from you. They can’t actually be inflated away from you. So, the best investment by far is anything that develops yourself, and it’s not taxed at all.”
Your earning power is the greatest determining factor of your financial well-being, and the one thing you can count on no matter what’s happening in the external economic environment. If you have a highly valuable skill, and you know how to get paid well for that skill, market and sell your services to those who need them, you’ll never have to worry about money. That doesn’t mean you won’t worry about money; but it does mean you don’t have to worry about money.
If you don’t have a highly valuable skill or if you have a skill that will soon be replaced by AI, that’s the first place for you to invest. Don’t shy away from investing in additional training to develop a new skill that would excite you to get out of bed in the morning or minimally, to get even better at your job and make yourself indispensable. If you’re in sales or self-employed, find someone who has succeeded in your industry and invest in learning from them to better market and sell your services. Those investments will always pay off, while the stock market is out of your control. Buffett has repeatedly said that the greatest investment he has made in his career was a Dale Carnegie course that taught him how to be an effective communicator. Let me repeat that, when asked, a man in his 90’s who has made billions investing for more than half a century recalls a self-help seminar he attended decades ago about effective communication was his greatest investment.
Investing in yourself not only leads to financial success but also personal fulfillment and a clear sense of purpose that will organically become your legacy. At the end of the day, you likely won’t be remembered for your financial success (though it’s a nice bonus if you are!). Even Warren Buffett, who is renowned for his wealth and investment skill, is even more often acclaimed for his wisdom, humility, kind demeanor and generosity than for his money.
Educating Your Kids on Effective Wealth Planning is Essential
During a Q&A session with an estate planning attorney, Buffett stressed the importance of talking to your children about your estate planning well before your death. Buffett stated, “If the children are grown when the will is read to them and it’s the first they’ve heard about what the deceased thought about things, the parents have made a terrible mistake.”
Leaving your family in the dark about your personal and financial wishes until you die or become incapacitated due to an accident or illness can lead to large amounts of confusion and conflict among family members. If you don’t want to leave a mess, don’t wait to talk to the people you love.
As we recommend and build into our Family Wealth & Legacy Planning Process, Buffett also recommends involving your heirs in the planning process. By doing so, you can ensure that everyone is on the same page and that your wishes are understood and respected far in advance. Additionally, this provides an opportunity to discuss your values and beliefs with your heirs, which can have a lasting impact on their lives.
Coming from one of greatest investors of our time, Buffett’s wisdom on building generational wealth is the embodiment of what we try to express to our clients. If you really want your heirs to act responsibly with their inheritance you must bring them into the conversation. Educate them on your finances and the lessons you’ve learned, explain what you want to see happen when your gone and the future that you envision for your family, your reasons why, and in turn, you will instill your wishes and wisdom in your heirs for life. It’s that simple, talk to them and what you want is more likely to become reality for your family.
How to Start the Conversation About Estate Planning With Your Heirs
So how do you start the conversation about estate planning with your heirs? We recommend you do it directly and with an invitation to meet with you and your lawyer together. This is something we love to do with our clients and can for your family too. You might say something like: “I want to make sure that we’re all taken care of, both now and in the future. That’s why I’d like to talk to you about my wishes for our family resources and invite you to meet with my attorney, so that we can ensure that everything is handled smoothly when I can’t be here.”
If your loved ones aren’t immediately open to having a conversation about estate planning with you or are resistant to how you want your assets managed after your death, don’t worry. Talking about estate planning can be uncomfortable at first, but as you normalize the topic, the conversation will most likely become a bonding experience and plant a seed leading to smart financial management.
Now, if you are worried that filling your heirs in on what they’ll receive will cause harm, please call us. This is a place where an attorney can assist in preparing you to have a conversation with your heirs and support them to make wise decisions when they receive their inheritance. Everyone’s heirs and family circumstances are different, whatever would be best your family can be built into your estate plan.
When you talk money and inheritance with your heirs during your lifetime, don’t forget that you have the opportunity to truly pass on not just the money, but your values and life lessons as well. If you wait until you are incapacitated or have died, it’s simply too late.
Finally, if you are the future heir of a parent who has not yet discussed their wishes or estate plan with them, you can jumpstart the conversation by getting your own planning done, and then talking with your parents about the choices you made, why you made them, and letting them know you’d like to help them feel comfortable talking to you about the choices they are making. If you aren’t sure how to handle any of this, please reach out.
Thoughtful Guidance to Begin Building Your Personal and Financial Legacy
Warren Buffett’s advice on building and preserving wealth is timeless and valuable no matter the size of your family or your estate. By involving your heirs in your estate planning and investing in yourself, you can set yourself and your loved ones up for long-term financial success and create a legacy that spans not only through your life but through the generations that follow you.
If you aren’t sure where to start or how to talk about your wishes with your family, give me a call. I’d be happy to guide you and your loved ones through the process of creating an estate plan that focuses on the needs and well-being of everyone it involves, so you can build a life you love today knowing that your loved ones and your community will be impacted by your legacy for years to come
To learn more about our family focused and personalized approach to estate planning, reach out to learn about the Family Wealth & Legacy Planning Process™.
This article is a service of Family Wealth & Legacy Legal Solutions (FWLLS). We do not just draft documents; we ensure you make educated, informed and empowered decisions for yourself and the people you love. That’s why we offer a Family Wealth & Legacy Strategy Session™, during which you will get educated and begin to prepare to avoid life’s most common legal problems and get a plan in place to make the best possible choices for the people you love. You can begin by calling our office today to schedule a Family Wealth & Legacy Strategy Session and mention this article to find out how to get this $750 session at a significantly discounted rate, or even for free.