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Preparing for the Great Baby Boomer Inheritance Wave
•Zebunisso Alimova
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Money talk makes most people uncomfortable, but ignoring the elephant in the room won't prepare you for what's coming. The largest generational wealth transfer in history is underway as Baby Boomers begin passing their substantial assets – primarily property – to their children.
This wealth represents decades of hard work, careful spending, and meticulous money management by a generation that tracked every penny. Their hope? That their life's work creates lasting financial security for children, grandchildren, and beyond. Yet statistics paint a sobering picture: by the third generation, most inherited wealth vanishes completely.
Why does this happen? When unprepared heirs suddenly receive significant assets during the emotionally vulnerable period of losing a parent, poor financial decisions often follow. We've all heard stories about lottery winners who end up bankrupt despite receiving millions – inheritance creates similar risks without proper preparation.
The solution starts with breaking the silence around inheritance planning. Develop your financial literacy now through books, podcasts, and professional relationships. Establish connections with trusted financial advisors, accountants, and lawyers before you need them urgently. When inheritance arrives, resist pressure to make immediate decisions – take time to implement thoughtful strategies like debt reduction, property investment, or low-risk ETF portfolios.
This preparation is particularly important for eldest daughters, who statistically often become responsible for managing their parents' financial affairs and communicating decisions to siblings. By building your financial foundation today, you honour your parents' legacy by preserving their hard-earned wealth for generations to come. Are you prepared for what's coming?
is a there's going to be a huge transfer of wealth.
SPEAKER_01
I think the biggest we have seen in the history.
SPEAKER_00
Ever.
SPEAKER_01
Ever.
SPEAKER_00
So which w what we're me referring to there is the baby boomers. Baby boomers are going into retirement, they're getting older, and they have a lot of wealth built up in assets. Largely, largely in New Zealand, it's largely pro property assets. So as as these people pass away, they're going to be transferring this wealth to their children, hopefully. Um so this is going to take place over the next say ten, twenty years. Um so what I I I think it's really important that people plan for this. Because as you know, if you if you get a whole lot of money unplanned from a source and you're not used to uh not used to dealing with that kind of money, there's a real good
chance that you're not gonna keep hold on to that money. And I'm just using situations like, you know, when people win Lotto. There's plenty of case studies here and abroad um where they end up with nothing or actually go bankrupt. They've won ten, twenty million dollars. So they get all this sudden wealth but they are they're not used to it. And also the attachments that come with it, you know, you'll you'll get a lot of new friends, for example, um, and you'll get a lot of people wanting, you know, you to help them. So I I I think it's important that people start talking, thinking about this and how this is gonna impact their lives and to make sure that they, as their parents would want, mm get the true benefits from the inheritance, um, which you're setting yourself up for the future.
SPEAKER_01
Because my problem, the way I see it, it's the generational wealth, right? I mean, the baby boomers done a fantastic job, they they worked bloody hard, super, super hard. They um, you know, were really tight with money, they wouldn't probably spend as much, they would know every single penny where it would go. And then they get to a point where they're like, cool, I'm passing this on to the future generations because I worked so hard. I want this to go to my children and to my grandchildren and to their and to their grandchildren. But apparently, by the time it gets to like a third generation, it gets wasted.
SPEAKER_00
Yeah, they they they they screw it. I was gonna say screw it up.
SPEAKER_01
Yeah, exactly. You know, and and this is a big worry for us, right? Because we're in the financial uh literacy world, we're in a financial capability world, and we use those words a lot because we want to help people do better in life. And this is what we're finding that if they don't have the tool set, the the skills, how to use money or what to do with that money, they will waste it on something that probably not gonna give them the return they would hope for in the future.
SPEAKER_00
It's a very um stress I I think it would be very stressful and very emotional sort of uh process. So yeah, we're here to help. Um, help people plan with their with their finances. And we if you do get yourself find yourself in that sort of situation, there are things that you can invest, ways you can invest your money that are
gonna help you set you up for the future rather than just spending it all on uh things like you know consumer goods and things like that. Um it it's better to work up a plan of what you might do or what you might like to do. Um so certainly, you know, if it was me, I would be looking at uh reducing my debt, paying off my mortgage, um, you know, investing in a in a suitable rental property that's gonna give me income, that kind of thing. Um if you're interested in the markets, you might be looking at ETF, which uh ETF investments which are a bit more low risk. Um But yeah, the key thing is to have a plan and not just to make it up when you when it happens. Because that's gonna be the most emotional time of your life, right? When somebody passes away that's important to you, and then you've got to make financial decisions.
SPEAKER_01
So the the only problem I know of when I talk to people that have those aging parents with wealth, usually those parents don't like to talk about money. You know, they're usually um quiet, yeah, uh closed up in those conversations because that's not something they were used to be talking about. So for them it's really weird going, hey son, guess what? You know, I've got this three properties that are coming your way when I die. Yeah. Um so usually they don't talk about it and they might leave a will behind with their lawyers and it's all sealed and nobody knows what's gonna happen there. So often those kids get a surprise. So be nice to your parents.
SPEAKER_00
Absolutely.
SPEAKER_01
To get a good surprise or yeah, but um, and that's where the problem is, right? At the root, where you don't know how much your parents have, you don't know how much is getting passed on to you. So, again, just as the previous episode we talked about, assume you get nothing. Yeah, so start from that position, you get nothing. But if you do get something, how can you prepare for it? Absolutely. What sort of plan can you have in place? What can you do right now to improve yourself and in in your own knowledge and your own skills, you know, learn, read books, listen to our podcasts and other podcasts out there, you know, improve your financial um knowledge because when you do come to that money, if you do, you will know what to do with that.
SPEAKER_00
Exactly. And you don't have to rush. You know, there will be people out there that try to rush you to do stuff, but you know, everything is under your control, so you know, you don't necessarily have to do anything straight away. Um, and that's what we find with people buying properties as well. You know, they don't need to rush the actual process, especially at the moment, because it's uh it's uh more of a buyer's market, so they don't the pressure is not there to make a quick track uh a quick financial decision, um, which can be helpful in terms of making a good one, a good decision.
SPEAKER_01
Exactly. No, that's fantastic. Was there anything else to add?
SPEAKER_00
No, that's all good, thank you.
SPEAKER_01
Oh wow, that was nice and short. Awesome. Just to wrap it up, guys. Basically, what you need to be thinking about is what can you do today to improve your future? And this has been a theme going on across
various podcasts that we've recorded because there is money coming through. It's the largest generational um wealth transfer that we will see in our history. And to add to that, actually, James, I don't know if you knew, but usually it's the eldest daughter that deals with the finances. So um, so if you are a woman and you are the eldest daughter, you might end up dealing with all of that for your parents and being that most hated sibling, probably, because you will have to break the news to the other siblings of what's going to happen with the money. So get yourself educated, prepare for the future, but also um talk to a financial advisor now, you know, make those connections, make those friendships, um, have a really good team around you. So you should always have a good financial advisor, a good lawyer, an accountant in your back pocket. And I'm sure you will all know someone, you know, in your circle of friends, there will always be someone of that. But if you don't, um if you don't, then go around and search for that. Like prepare your uh foundation early enough and not rush around in the last minute trying to find someone to help you with those things. So preparation is an absolute key. Thank you so much for listening. If you do want to um hear about other podcasts that James and I have recorded around this topic, go back a few episodes ago and you will find us. Thank you so much and see ya.
