The Wealth Lifecycle: Why financial literacy is a lifelong discipline

Financial literacy is often seen as a beginner’s skill – budgeting, saving, and avoiding debt. But true financial fluency deepens as wealth grows.

 

In honor of Financial Literacy Month, consider how your financial knowledge can evolve with your wealth. 

 

Each phase of “The Wealth Lifecycle” offers a framework for this ongoing growth, showing how our financial decisions and the knowledge needed to make them shift through different life stages.

 

PHASE 1: WEALTH CREATION

In the early accumulation phase, foundational knowledge – compounding, debt management, tax-advantaged accounts, and basic investing – builds independence. But too many stop here, stalling future growth.

 

PHASE 2: WEALTH GROWTH AND OPTIMIZATION

As assets increase, so must your literacy. Risk-adjusted returns, tax strategies, alternative investments, and estate planning become essential. I believe continued learning separates those who preserve wealth from those who plateau.

 

PHASE 3: WEALTH PRESERVATION AND DISTRIBUTION

Approaching retirement, priorities shift from growth to sustainability. Effective withdrawal strategies, healthcare planning, and tax-efficient spending now take center stage – requiring a new financial skill set.

 

PHASE 4: LEGACY AND WEALTH TRANSFER

True legacy is about more than money. Without financial education, most wealth is lost by the third generation. Teaching children and grandchildren stewardship, using trusts and governance structures, and aligning wealth with values become key.

 

THE MORE YOU HAVE, THE MORE YOU NEED TO KNOW

Wealth is dynamic, and so is the knowledge required to manage it. Stagnation invites risk; curiosity builds resilience. Financial literacy isn’t a box to check – it’s a lifelong discipline. Surround yourself with wise counsel and stay a student of finance, for yourself and those who follow.

 

Stephanie Mackara lives on Daniel Island and is a partner and managing director at Beacon Pointe Advisors, LLC.