If you are going to take investment and estate planning advice from anyone, Warren Buffett is likely one you want to consider. 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 Your Human Assets to Build Your Wealth and Your Legacy
In almost every interview Buffett provides, 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 determiner 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 your services, 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. You may need to get retrained, or uplevel your skills to be more human or relational so you can use AI, but not compete with it, and all that may take investment. Don't shy away from investing in additional training to get even better at your service, or even get the additional support to learn to market and sell your services. Those investments will always pay off whereas the stock market is out of your control.
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, and generosity than for his money.
Raising Kids Well is Key in Effective Wealth Planning
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 Life & Legacy Planning Process, Buffett 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. Buffett expressed that if you really want your heirs to act responsibly with their inheritance, you must live out your values and instill them in your heirs.
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 we'd love to support your family in this way 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 how 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 become easier and more open.
Or, if you are worried that filling your heirs in on what they'll receive will cause harm, please call us. This is a place we can really help by supporting you to get prepared to have a conversation with your heirs and also supporting them to be ready to receive their inheritance.
When you talk money and inheritance with your heirs during your lifetime, you have the opportunity to truly pass on not just the money, but your values too. 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 talked with you about estate planning, 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 Build Your Personal and Financial Life and 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 hearts 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 my heart-centered approach to estate planning, click this link to schedule a 15-minute discovery call to learn about my Family Wealth Planning Session™ process.
This article is a service of Melinda Hoey, a Personal Family Lawyer® Firm. We don't just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you've ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.