How to use your wealth as a force for good this World Kindness Day
On Saturday 13 November, people around the world will mark World Kindness Day and encourage everyone to be a little bit kinder.
Founded by the Random Acts of Kindness Foundation, World Kindness Day aims to “make kindness the norm”. As vice president Brooke Jones writes: “Kindness starts with one. One smile. One compliment. One cup of coffee. One conversation.”
If you’re in the fortunate position of being able to give back, read on to learn about three lovely ways you could use your wealth for good this World Kindness Day.
1. Gift wealth to loved ones during your lifetime
Gifting wealth to your friends, family, and loved ones can be a great way to spread some kindness and help others. This is sometimes known as a “living legacy” and is becoming an increasingly popular way to pass on monetary gifts. One reason for this is that more people want to see the good their money could do for their family rather than waiting to gift it in their will after they die.
When you gift wealth during your lifetime, you can also give it at a time when it will be most helpful for the person receiving your gift.
For example, if your children or grandchildren want to buy their first home, your financial gift could help them to do this sooner than they could have achieved on their own. You could help family members or friends pay for their dream wedding, or you could take your family on the holiday of a lifetime.
Remember only to gift what you can afford. It’s easy to get carried away and want to help with everything, but make sure you keep enough set aside for your own living expenses and potential later-life costs before you go ahead and give the money away.
There may be tax implications to take into account when gifting money to others during your lifetime. Your financial planner can help you to understand the possible tax implications of your gift so that you can make an informed decision about how to proceed.
2. Invest in causes that are striving to make the world a better place
Another way to spread kindness is to support others who are making the world a better place. This might mean donating to charities, or it might mean investing in companies whose values align with your own.
If you choose to use your investments to make a difference, you might like to consider investing in companies that have an ESG (environmental, social, governance) focus.
ESG can mean different things to different people, so it is important to do your research to be clear on what you are investing in. For example, if you are particularly passionate about the environment, you might like to invest in companies that limit carbon emissions. If social justice is a higher priority for you, perhaps companies who focus on helping those in marginalised communities would be more appropriate.
If you would like to make changes to your investment portfolio, we strongly recommend that you consult your financial planner beforehand. They can help to ensure that your portfolio remains balanced so that you have the opportunity to generate positive returns while supporting causes that you believe in.
You can read more about how we help our clients to invest in ESG funds as part of a balanced portfolio on our website.
3. Leave a charitable gift in your will
A lovely way to use your wealth for good is to leave a charitable gift in your will. Lots of charities rely on the gifts that they receive from wills to fund their vital work, so this could be a great opportunity to support a cause that is close to your heart.
It’s important to be very clear in your will about which charity you would like to support and what you would like to gift them. It might also be sensible to talk to your family about your wishes so that they can make the appropriate arrangements when the time comes.
Leaving a charitable gift in your will could benefit your beneficiaries as well as the charity you choose. If the value of your estate exceeds the nil-rate band, your beneficiaries would normally pay Inheritance Tax (IHT) at a rate of 40% on the excess. If you leave at least 10% of your estate to a qualifying charity, the rate of IHT payable would reduce to 36%.
As such, you may be able to leave more of your wealth to the people that you care about.
Get in touch
If you’d like to learn more about how you could use your wealth as a force for good, we can help you to build a financial plan that’s aligned with your values.
Email theteam@fortitudefp.co.uk or call us on 01327 354321.
Please note
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.