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The gender wealth gap continues to narrow as women gradually increase their share of wealth. A recent report by Agility Research showed that women in the Asia Pacific region are joining the workforce in record numbers , steadily closing the income and wealth gap with men.

In fact, research by Boston Consulting Group  indicates that women may be the new face of wealth in Asia with their wealth growing at 10.4 percent annually. If the trend persists, women in Asia will hold more wealth assets than any other region in the world except North America by 2023.

And as the world continues to level the playing field for women, parents play an important role in supporting their children's financial education.

Here are five ways for parents to establish a sound financial roadmap for the next generation:

1. Involve and educate your children

When it comes to financial education, parents should start teaching their children early and cover a range of topics to promote holistic financial literacy, according to Vivian Kiang, managing director and head of Wealth Planning and Fiduciary Services, Asia at RBC Wealth Management in Hong Kong.

“It's always recommended to educate children early about money management – teach them matters like the meaning of money, how to value money and how to save for a rainy day," she says.

Driving home the importance of good financial habits by taking the time to equip children with the tools, resources and skills will not only help to inspire confidence in decision-making, it might also give them a head start on the future.

2. Be a strong financial role model

Being a positive role model as a parent extends to financial matters as well.

Rohit Bhalla, executive director and team head at RBC Wealth Management in Singapore, shares that his personal experiences with his daughters went a long way toward creating awareness of financial matters and understanding the role of budgeting.

“Children subconsciously pick up what they see around them. I used to get the girls involved in meticulous budget planning around family activities such as a holiday – the price of tickets, hotel stay, food, entertainment and sightseeing. That made them learn what their parents do for them and taught them how to stretch that dollar," he says.

Budgeting and financial decision-making do not have to be taboo subjects. Make these activities a family affair by talking about goals, celebrate when you reach them and talk about how they were achieved.

3. Set clear goals

As you work with your children on a journey of mutual learning, you will help establish milestones to keep the family on track to meeting goals.

This is now more important than ever for parents who want to raise daughters who will go on to stand on a level playing field at work. Bhalla points out that “a solid understanding of finances can be the key to breaking stereotypes and empowering the child."

Whether it's saving for university or setting a target age for retirement, having clear and achievable goals may help keep parents and children focused and motivated to grow wealth to meet their objectives.

With the trusted guidance of a wealth manager, a family may also discover areas that matter most to their financial situation. An advisor can provide support building a tailored wealth portfolio to ensure decisions made to meet today's needs won't compromise tomorrow's goals.

“Financial goals are the key to empowerment – the ability to think long-term and balance how you spend your money on things today versus planning for things one, five or 10 years from now. I have always encouraged the girls to list their goals, the timeline to achieve them and distinguish among short-, medium- and long-term goals," says Bhalla.

4. Invest and strategize with the future in mind

Bhalla adds when it comes to wealth planning for the next generation, it's important to think about the future and work backwards from there.

As a start, have conversations with your children about what assets they would like to build, list timelines to work toward those assets and strategies to achieve them. Reflecting on his experiences with his elder daughter, Bhalla shares that they discussed how milestones such as purchasing a car or property were achievable with proper strategy.

“She made a detailed spreadsheet with her revenue and cost lines. I was happy to see that she didn't stop her contribution into the investment fund while working out her ability to pay her loans," he adds.

Kiang says that in the process of investing and wealth planning, every family may want to consider diversifying their portfolio into different asset classes to manage risk. “Children should learn the concept of balancing return and risk – what is considered a reasonable return and how can we mitigate the risk?" she adds.

5. Safeguard your legacy

Ultimately, building wealth for your children is a long-term process that runs more like a marathon than a sprint. A disciplined approach to saving and investing may be important, but families should also ensure they do not falter close to the finishing line.

Adopting strategies to ensure your family's hard-earned wealth is preserved through solutions like trusts and fiduciary services may help pass on your wealth while protecting your assets, personal estate and privacy.

Bhalla also highlights the importance of families having proper insurance coverage. Medical, total and permanent disability, and critical illness policies are necessary to protect against low-probability yet catastrophic events that could derail your plans.

“Life insurance is particularly important while your family is dependent on you financially," he adds, noting that it is also an invaluable tool to equalize inheritance between sons and daughters alike.

This article contains excerpts from CNA. Read the original article here .


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