The goal of all Indians is to leave a legacy for their children. Often, they want to leave a legacy even for their grand children and great grand children. But first, they must own something or achieve something to leave behind as a legacy. 

Legacy is defined as ‘a gift by will, esp. of money or personal property’ or ‘something handed down or received from an ancestor or predecessor.’

If leaving a legacy is as per the dictionary meaning then people leave legacies for future generations to enjoy. The legacy could be in the form of

• Financial instruments
• Property
• Gold
• Artifacts
• Businesses
• Other moveable and immovable assets

Besides the physical aspects of legacy families can leave legacies that are esoteric. For instance, if a person is wealthy how did that person accumulate so much of wealth?

Thus, legacy can have a physical component as well as an educational component. 

Two instances that follow illustrate this concept further.

For instance, Govind, who worked as a storekeeper in a private firm and a prudent investor, has accumulated sufficient wealth over the years by using the twin strategy of saving and investing. Govind is 86 years old and he has a tidy sum of say Rs 80,00,000 invested in mutual funds, fixed deposits and small savings. He is quite satisfied with his wealth and he wants to leave Rs 40,00,000 each to his two grandchildren after he dies.

In another instance, Mahesh, who worked as an officer in another private firm is also 86 years old and he has hardly any wealth to speak of. Though he earned more than Govind, he squandered his money by spending recklessly. He is unable to leave any legacy for his six grand children.

These two instances reflect conditions that exist in Indian families. Some are prudent with their money and guard it carefully while others want to live for the day without a care for the future.

In the case of Govind, he is not only leaving a legacy of substantial financial wealth but also the legacy of prudent saving and investment. In the case of Mahesh, he is not leaving any financial legacy. In fact, he is leaving a legacy of reckless spending and if his grand children follow in his footsteps they are bound to face huge hardships in their lives.  

The lessons to learn from the above two instances are that

• Spending money prudently and saving money from earned income is a good habit
• Investing the savings in appropriate financial instruments leads to accumulation of wealth, which the person can leave as a legacy for his or her descendants

Learning from the experience of Govind, young Indians must save, invest and accumulate wealth if they are desirous of leaving a legacy for their children and grand children.

You can accumulate wealth by following some basic rules which include

• Living within your means
• Setting aside a fixed percentage of your income for investment
• Recognizing the power of compounding
• Starting the savings habit early in life
• Deploying the savings in a goal-oriented investment strategy
• Creating a portfolio of investments including all available financial, non-financial and insurance instruments with established goals for each investment
• Using financial experts to plan your strategy if you do not have the time or the inclination
• Setting up a monitoring system to track the performance of your investment
• Rebalancing your portfolio periodically to reset your investments consistent with established goals
• Staying invested for the long-term

If you follow the above rules in spirit and letter you will end up accumulating substantial wealth that you can leave for your future generations as a legacy – both financial and educational.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully