Avoid poor decisions and other wealth destroyers to help your kids with their financial future
Building wealth, especially generational wealth that lifts up your whole family, can take an exceptionally long time. Unfortunately, some poor financial decisions like an affair can destroy it all in much less time.
Today’s essay, part of our personal finance scholarship contest, is by Rumbidzai Machakata, a student at the Henderson State University. She shares how her family came very near financial freedom only to see it snatched away by one bad decision.
Check out Rumbidzai’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win one of our two $500 personal finance scholarships, announced August 31st!
Building Generational Wealth for Financial Independence
I was born to wonderful parents who tried to raise me the best that they could but they never sat me down to give me any financial nuggets. Even though my mother and father once managed a butchery, they have never verbally imparted to me any financial wisdom related to the business.
In preparation for this scholarship application, I cracked my head trying to remember at least one conversation that my parents and I have had about personal finances and I came out empty.
However, all lessons are not learned through verbal interactions, sometimes observation can serve as a very powerful tool.
Bad Financial Decisions and Lessons from My Father
The biggest lesson I learned from watching my parents is set up financial wealth for generations to come; financial increase should be accompanied by wisdom. The effort that we put into hunting for wealth should be equivalent to the effort that we invest in the wisdom to manage our wealth.
My grandmother was a wise woman. Without a husband by her side, she managed to start up a butchery and a hair salon. Her passion was in hairdressing; therefore, she decided to give her full attention to the hair salon. She decided to give my father full control of the butchery as he was the first born of her children.
My father already had a good and secure full-time job with the government so he delegated all the butchery operations to my mother. Without any business experience but great work ethic, my mother skyrocketed sales in the butchery. She sacrificed all her time and effort and the high-profit margins proved it.
For years, life was wonderful; I was attending a top nursery school, my brother was at a private school, and my two sisters were doing great too. Turning his back to wisdom, my father decided to engage in multiple extramarital affairs. The success of the butchery made him feel invincible even though he was not the one dropping sweat in the business.
Aware that the business belonged to his mother and my mother had limited authority, my father began taking money out of the business and spending it on his mistresses. Since the mistresses and the multiple children he conceived out of wedlock were not the wisest investments my father chose to pursue, the butchery began suffering financially.
An Affair Ruins Generational Wealth
Without any warning, my father decided to sell the butchery, running my mother out of the only occupation she had ever known.
From that day onwards, our lives changed drastically; falling from the top to the bottom really hurt on all levels. Maybe if my father chose to set aside wealth for his children, I would not be facing the possibility of dropping out of college because of insufficient funds; maybe my mother would not have to be working multiple low-level jobs just to assist me with my college expenses.
The one good financial lesson that I took from my parents is you are never too successful to be immune to bad financial decisions and set aside wealth for generations to come.
I want to thank Rumbidzai for her story about the bad financial decisions and how an affair can destroy generational wealth. It’s not easy to share stories like this but we can all learn and be better off for it. Be sure to support Rumbidzai by sharing the article through social media and check in August for the winner of the personal finance scholarship.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.