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The Generation Trap

Creating wealth while supporting parents and children.

Bryan Hirsch

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In days gone by, having a large family was considered insurance against poverty in the parents’ old age.  It was standard practice that all siblings would club together to support aged parents, but in today’s fast-paced world this is not a given, and some siblings refuse, or are unable, to shoulder the burden. Fifty years ago children were considered independent at age 18 and had to fend for themselves financially. Now, a child of that age may just be starting a university course and still be totally dependent on his or her parents.

Sandwich generation

Adults in their 50s are sometimes called ‘the sandwich generation’, as they are stuck in the middle between their elderly parents and their not yet fully independent adult children. This is an age when they expected to be free of responsibilities and to start to enjoy life again as a couple, this time more established than when they first started out. Instead, they find themselves burdened with the task of taking care of aged parents and simultaneously supporting grown children not yet capable of taking care of themselves. These responsibilities take their toll both emotionally and financially,
and can be a huge drain on the resources of the middle-aged couple.

Research shows that this situation is becoming the norm in today’s modern world. Even people who made provision for their retirement find that their pension is now inadequate, having failed to keep up with inflation rates. Medical science has also increased life expectancy, but at a price: spiraling healthcare costs for the aged. These expenses fall increasingly on the shoulders of the middle-aged children, who are themselves struggling to ensure that their own pensions will be adequate when they retire. Yet very few children can ignore their elderly parents in their hour of need, and find themselves taking on the task of supporting them, hopefully with the cooperation of other siblings.

Reciprocal care

Coupled with this extra financial responsibility comes the problem of adult children who still rely on their parents financially. In many cases, this involves paying for their tertiary education and living expenses while they are studying. While this expense may seem onerous at the time, it does tend to pay off in the long term.

Research has shown that this assistance is reciprocal: parents support their children’s education, and children repay the investment in their education by providing their parents with old-age support. This investment-repayment cycle is related to the existence of a rapidly growing national economy, as in the case of South Africa, where the returns on an educational investment in your children can be much higher than returns on savings or any other kind of investments.

As the demand for more skilled and educated workers increases, children with a strong education are empowered to earn nearly three times what their parents earn. Once these educated children secure good incomes, they and their parents together share the returns from the educational investment.

Set the boundaries

Clearly, supporting a child’s education pays off in the end, but it is also essential to know when to stop this support and help the child to stand on their own two feet. Cutting the financial cord has to be done. In some cases it is done gradually, by a slow weaning process. In other, more resistant cases – such as when an adult has been living with their parents for years – only shock treatment will work. It may seem harsh but it’s a case of financial ‘tough love’.

Caring for aged parents is more complex and here the “tough love” approach is obviously inappropriate. Elderly, ailing parents are unable to fend for themselves and now is when they really need you. The best you can do is to give them all the support you can without jeopardising your own retirement too much. Ideally, your siblings will share this mutual responsibility. It’s not easy being in the middle of a generational tug of war, but knowing where to set the boundaries will go a long way in lessening the pull.

BRYAN HIRSCH has been in the financial services industry for 47 years and is a director of Bryan Hirsch Colley & Associates. He has written two books, the first Bryan Hirsch’s Guide to Personal Finance and more recently, Steps to Financial Freedom. Bryan has written for many of South Africa’s top financial and business publications, has been a weekly guest on Radio SAFM for 18 years, and has his own weekly TV show You & Your Money on Summit TV.

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Personal Finance

6 Ways To Develop A Millionaire Mindset

Chasing money has remarkably little to do with getting rich.

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If you truly want to have a million dollars, you must first be and think like a millionaire. By doing so, you will attract the necessary resources to you.

So, you want to become a millionaire entrepreneur? You’re not alone. Many dream of leaving their job and becoming their own boss, enjoying the various millionaire lifestyles we watch on TV. But there’s a difference between those who dream of becoming millionaires and those who do. And it begins and ends with mindset. If you don’t develop that mindset, you will continue to spin your wheels, working just as hard, but never going anywhere.

Developing a millionaire mindset requires you to stretch your thinking. Start by developing the following six attributes.

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Personal Finance

4 Ways To Become A Millionaire Even When You Start With Little

It costs nothing to take advantage of the limitless opportunities online.

Timothy Sykes

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The hardest part of becoming successful is getting started to begin with. But despite the challenges ahead of you, there’s a way to become a millionaire when starting with little. I’m going to show you four reasons why you can become a millionaire with just a small investment.

1. First focus on learning, not big gain

Education is your greatest weapon. Focus on learning in the beginning. Don’t make the mistake of focusing on making huge gains in the beginning. Learn everything you can because this is how you build the foundations for long-term gains.

Related: 21 Choices Millionaires Make That You Aren’t Making But Should Be

They say that if a millionaire goes bankrupt they’ll nearly always be able to get it back. And that’s because they might have lost their money, but they have the knowledge of how to get back to where they need to be.

2. You can learn loads about any topic online

online-learning

I’m grateful for the internet. It’s the single biggest library in the world. You’re reading this article right now and you’re acquiring knowledge you wouldn’t have been able to acquire 40 years ago.

Use the internet to its fullest extent, whether that’s through reading books, browsing articles or watching video tutorials. Set some time aside every day to learn something online. It could be a video series or a favorite blog.

When you get into the habit of learning regularly you’ll find that you advance much faster.

3. Focus on the niche you love

These days you can learn about anything and target the niche you’re passionate about.

This is what I was able to do with penny stocks. I found a gap in the market and provided knowledge to people who wouldn’t have otherwise being able to access this sort of information.

You can do that with absolutely any niche. When you find a niche you’re passionate about and you use the reach of the Internet you start to make huge gains.

4. Prove your expertise by creating free content

Your reputation as an authority is the new business card. There’s a reason I created a penny stock guide and made it free for all. You may have already seen ads for it on social media. The way to succeed with little is to create a reputation through your content.

Related: How To Become A Millionaire, Explained In 1 Minute

It’s the gateway to success because through free content you start to build relationships with others who value your work. And from there everyone gets richer.

You can do lots with a little

The days when you needed a huge investment to become successful are long gone. These days you can do so much with just a little. Find what you love, advance your knowledge in that area, and create a product that fulfills a need. Finally, work on building up relationships through portraying yourself as an authority on your subject.

Combine everything together and you can accomplish anything.

This article was originally posted here on Entrepreneur.com.


Related: 13 Habits Of Self-Made Millionaires You Could Adopt Today

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Personal Finance

10 Tips To Become A Millionaire This Year

Becoming a millionaire requires changing your mindset and implementing some changes.

Murray Newlands

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Becoming a millionaire may seem out of your reach, but it’s possible with the right attitude and guidance. The fact of the matter is your income can only grow as quickly as you do, so you need to change your mindset to achieve your goal of becoming a millionaire.

Once you have a millionaire mind, you can’t lose it, no matter what financial or business mistakes you make along the way. To get yourself there, you’re going to need some structure. To help you, I’ve outlined the top ten tips you should follow to become a millionaire this year.

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