Secure Your Family’s Long-Term Legacy

Most people invest for a reason.

It might be to fund retirement, build financial independence or create wealth that can eventually be passed to their children and grandchildren.

But if the ultimate purpose is to improve your family's future, there is another question worth asking:

“What kind of future are you investing for?”

Leaving younger generations more money is important. But they will also inherit the economy, infrastructure and environment that today's investment decisions helped create.

They will eventually become investors themselves.

So perhaps there is an accountability that comes with investing across generations. Not simply to leave them capital, but to consider what that capital helped finance along the way.

An inheritance is only part of the legacy

Traditionally, creating a family legacy has meant accumulating assets. A home. An investment portfolio. Superannuation. A family business.

These can provide younger generations with opportunities their parents and grandparents may never have had. But an inheritance and a legacy are not necessarily the same thing. An inheritance is what you leave your family. A legacy can also reflect what you helped create for them.

If you are investing today because you genuinely want your children and grandchildren to enjoy a better future, there is a logic in considering investments that seek to achieve both objectives.

Generate an investment return while helping finance a better future for the people who may eventually inherit that return.

We are accountable to the investors who come after us

Today's younger generations will become tomorrow's investors.

They will inherit portfolios, superannuation, property and businesses. They will also invest the wealth they create themselves. But they cannot choose the starting point we leave them. Decisions being made today will influence the energy system they use, the infrastructure they rely upon, the technologies available to them and the environmental challenges they will need to address. That creates an important form of intergenerational accountability.

Investors cannot control what the world will look like in 20, 30 or 50 years. Nor should investment decisions be made on environmental considerations alone. But investors can decide where some of their capital goes today.

If the intention is to help secure the financial future of younger generations, why not consider allocating some capital to investments seeking a financial return from building the economy those generations will inherit?

Their future requires investment today

Australia's transition towards a lower-carbon economy will require substantial amounts of private capital. Renewable energy projects need to be built. Electricity networks require investment. Energy storage needs to expand. New environmental technologies need capital to commercialise. Waste needs to become a resource rather than simply something to dispose of. None of this happens because we want it to happen.

Someone has to invest.

Governments cannot provide all the capital required. Institutional investors will play an important role, but private investors can participate as well. That creates an opportunity for today's investors.

The capital required to address long-term environmental challenges can also create investable assets, businesses and technologies. The objective is therefore not simply to "do good".

It is to seek opportunities where investment return and environmental progress can work together.

Investing “for” them, not just leaving something to them

This changes the way we can think about family wealth. Imagine building an investment portfolio solely to maximise the amount transferred to the next generation, while giving no consideration to the economy and environment in which that wealth will eventually be used.

There is nothing inherently wrong with that approach. But there is another choice.

Part of the portfolio could potentially seek a return by investing in renewable infrastructure, energy storage, environmental technologies, carbon abatement, circular-economy businesses and other assets addressing environmental needs. Those investments still need to stand on their financial merits.

There are risks. Environmental investments can involve development, technology, regulatory and liquidity risks. Some investments will succeed and others will not.

Intergenerational responsibility does not mean sacrificing investment discipline. Quite the opposite. If this capital is intended for future generations, there is every reason to invest it carefully.

Making environmental opportunities accessible

The challenge is that many environmental investments can be difficult for individual investors to access. Some are listed. Many are not.

Opportunities can sit within private companies, individual infrastructure projects, green debt or other investments with substantial minimum commitments. Building a diversified environmental portfolio independently can therefore be difficult.

The EnviroInvest Investment Fund has been designed to provide eligible investors with exposure to a diversified portfolio of environmentally conscious investments through the convenience of a single investment.

The Fund can consider opportunities across renewable infrastructure, innovative environmental technologies, carbon markets and abatement, green debt, circular economy and other environmental assets, including opportunities outside listed markets.

The objective is not environmental investment at any price. Risk, potential return, liquidity, management, valuation and the underlying economics still need to be considered.

Because securing a family's long-term legacy requires both sides of the equation. Secure Your Family’s Long-Term Legacy

The Bottom Line

Your children and grandchildren may one day inherit some of the wealth you create. But they will inherit also the future we leave them.

They will become workers, business owners, consumers and investors in an economy shaped by decisions being made today. That creates an accountability that extends beyond the size of an inheritance.

If you are investing because you want to give younger generations a better future, perhaps the question should not only be:

"How much can I leave them?"

Perhaps it should also be:

"What can my investments help build for them?"

Seeking an investment return and helping finance a better environmental future do not have to be competing ambitions.For families investing across generations, they can be part of the same objective. Let us help you secure your family's long-term legacy.

Important Information

EnviroInvest Pty Ltd ACN 685 107 957 (“EnviroInvest”) is an Authorised Representative of Daylight Financial Group Pty Ltd ACN 633 984 773 (“DFGPL”) which is the holder of an Australian Financial Services Licence (AFS Licence No. 521404).

Information in this commentary is current as at date prepared unless otherwise stated. However, please bear in mind that investments can go up or down in value, and that past performance is not a reliable indicator of future performance. For more Important Information please refer to the Disclaimer section of this website.

This communication may contain general financial product advice. It has been prepared without taking into account your personal circumstances, and you should therefore consider its appropriateness in light of your objectives, financial circumstances and needs before acting on it.

If our advice relates to the acquisition or possible acquisition of a particular financial product, you should obtain a copy of and consider the Information Memorandum (IM) or Product Disclosure Statement (PDS) before making any decision.