The Value of Sound Financial Advice: Inheritance or Self-Made

Written by Claire Moorhouse, Wealth Manager, Cape Town, Overberg Asset Management

Whether you’ve just received an inheritance or are beginning your financial journey from the ground up, one thing remains true — sound financial planning can significantly impact your long-term success. For beneficiaries of an estate, the sudden influx of wealth can be both an opportunity and a burden. For younger individuals without such a windfall, building wealth through discipline and education is equally empowering. In both cases, working with a qualified financial planner can be one of the smartest decisions you make.

Advice for Beneficiaries of an Inheritance:

Receiving an inheritance often comes during an emotionally charged time. It’s easy to make impulsive decisions or to mismanage funds through inexperience. Here are a few key steps to take:

1. Pause Before You Act

Don’t feel pressured to make big financial decisions right away. Take time to process the loss and consult professionals.

2. Work With a Qualified Financial Planner

An experience financial planner can help you assess your current financial situation, create goals, and implement an investment strategy that aligns with your values and needs.

3. Avoid Lifestyle Inflation

Use the inheritance to build long-term wealth, not just to upgrade your lifestyle. Consider investing in a diversified portfolio, paying off high-interest debt, and contributing to retirement.

4. Tax Planning Is Key

Different assets have different tax implications. A financial planner can guide you on estate duty, capital gains, and structuring.

5. Think Generationally

Consider how this inheritance could support future generations. Trust structures, offshore diversification, or intergenerational planning may be worth exploring.

Advice for Parents Teaching Children to create and grow their own Wealth:

1. Start With Education

Teach children the power of compound interest, risk and return, and the value of saving consistently. Use simple examples to make it relatable.

2. Encourage a Habit of Saving Early

Even R200 a month into a tax-free savings account can teach discipline and reap rewards over time.

3. Introduce Investing, Not Just Saving

Explain the difference between keeping money in a bank and investing in shares, ETFs, or unit trusts.

4. Set Financial Goals Together

Help them set realistic short- and long-term financial goals and guide them through the steps to get there.

5. Lead by Example

Talk openly about money. Let them see your budgeting, investing, and even financial mistakes.

Conclusion

Whether you inherit wealth or build it slowly, the key to success is the same: start with a plan, seek expert guidance, and remain disciplined. A financial planner can help turn financial uncertainty into confidence — for you and future generations.