There is a wave of economic change sweeping across the globe, and it’s known as the Great Wealth Transfer. This term refers to the estimated $68 trillion in assets that will be passed down from the Baby Boomer generation to their heirs over the next few decades. While this shift is often discussed in Western economies, it’s time to ask: will this phenomenon also occur in the Philippines? And if so, how should we prepare for it?

The Scope of the Transfer

First, let’s take a closer look at the core of this wealth shift. Baby Boomers, those born roughly between 1946 and 1964, have accumulated a massive amount of wealth over their lifetimes, primarily through real estate, investments, and businesses. As they reach retirement age and eventually pass on, this wealth will flow to the next generation—millennials and Gen Xers. In the US, this has been widely discussed, but let’s think about it in a local context.

Is the Great Wealth Transfer Happening in the Philippines?

The short answer is: Yes, it’s already happening, but in a different way than in more developed economies. In the Philippines, the wealth transfer may not be as centralized or as formalized as it is in the West. However, it’s undeniable that a significant portion of wealth will be passed down from older generations to younger ones—especially considering the strong family ties and the prominence of family-owned businesses here.

In the Philippines, much of the wealth is tied to land, small and medium-sized businesses, and local investments. Unlike the West, where the wealth transfer is largely driven by paper assets, the Filipino economy still has a significant focus on real estate and family-run enterprises. As the older generation begins to retire or pass away, millennials and Gen Z will inherit these assets. But just because the wealth is transferring, doesn’t mean that it’s a guaranteed advantage.

What Can We Expect?

Here’s where things get interesting. With the transfer of wealth, the new generation will find themselves with responsibilities—and opportunities—unlike any previous generation. It’s not just about inheriting money, but also understanding how to manage it. The younger generation in the Philippines is more exposed to global markets, digital currencies, and modern investment practices. However, there’s a gap in financial literacy that needs to be addressed. The Great Wealth Transfer could create wealth inequality if the heirs are unprepared to handle what they inherit.

Additionally, the Philippines has a unique social structure. Many younger individuals may not have the entrepreneurial mindset or the financial acumen to take the helm of family businesses. For those who are inheriting land or other physical assets, the lack of liquidity might limit how these assets can be utilized.

How Will It Affect Us?

1. Increased Wealth Inequality: If the wealth is not evenly distributed or if the younger generation doesn’t know how to manage it properly, this could lead to greater disparity in wealth. Those who understand investment vehicles and new technologies will flourish, while those who don’t will struggle to adapt. Financial education and awareness will become even more critical.
2. A Shift in Business Dynamics: The next generation may have different views on business than their predecessors. Some may wish to modernize or even liquidate the family business. New ideas on how to run businesses—whether it’s through digitalization or new industries—will redefine the landscape. This shift could lead to innovation but also potential challenges for older family-owned businesses trying to survive in a changing market.
3. Real Estate and Land Ownership: In the Philippines, land is still one of the most significant assets people hold. The Great Wealth Transfer could impact real estate prices and ownership, especially as younger people seek to use land for new business ventures. However, this may also come with challenges such as inheritance disputes or the need to sell land for cash.
4. Generational Divide in Financial Understanding: As with any major wealth transfer, there will be a shift in how wealth is perceived and handled. Baby Boomers may have followed a traditional savings and investment approach, while Millennials and Gen Z are more likely to embrace newer technologies like cryptocurrency, tech startups, and the gig economy. This shift could lead to a more diversified financial landscape, but it also presents risks if younger generations don’t have the proper knowledge to navigate these systems.

What Should We Do About It?

As the Great Wealth Transfer takes shape in the Philippines, here’s how we can prepare:

1. Invest in Financial Education: It’s crucial to make sure the next generation is equipped with financial literacy. This isn’t just about knowing how to save or invest—it’s about understanding how to protect, grow, and manage wealth. It’s about building a mindset of responsible stewardship.
2. Encourage Entrepreneurship: Whether it’s through new tech, services, or innovative business models, we need to foster an entrepreneurial spirit in the younger generation. Business acumen, adaptability, and innovation will be key to thriving in the new economy.
3. Prepare for Inheritance: Families should have open conversations about succession planning. It’s not just about who inherits what, but also how those inheriting will manage it. Succession planning should address both the financial and emotional aspects of transferring wealth.
4. Adapt to the Digital Economy: With the rise of cryptocurrencies, NFTs, and tech startups, the younger generation needs to embrace the digital economy while understanding its risks. This is especially relevant as wealth becomes more diversified into new assets.

The Great Wealth Transfer offers tremendous opportunities for those who are prepared to embrace it. The next generation will have access to unprecedented amounts of wealth, but with that comes great responsibility. In the Philippines, we must recognize the cultural and economic nuances that make our situation unique, and be proactive in educating and preparing ourselves for the changes ahead.

It’s up to us to ensure that this transfer of wealth doesn’t simply create a new class of the rich and poor, but a generation that is equipped to use that wealth for good. It’s a long road, but with financial education and strategic planning, we can create a future that benefits not just us, but our families, communities, and the nation as a whole.

My Thoughts: A Biblical Reminder on Stewardship

As we look to the future and the vast wealth that will be passed down, it’s important to remember that financial prosperity is not just about accumulating wealth, but about how we manage it. The Bible speaks extensively on stewardship and the responsibility we have to use our resources wisely and for God’s purposes.

In Matthew 25:14-30, the Parable of the Talents teaches us that God entrusts each of us with resources, and it’s our duty to manage them faithfully. The master rewards the servants who wisely invested and grew what was entrusted to them. Likewise, the inheritance of wealth from the older generation is not just for personal gain but should be used to honor God, build up others, and further His Kingdom.

In Luke 16:10, Jesus reminds us, “One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much.” This principle of being faithful with small things extends to all areas of our lives, including how we handle wealth. If we are faithful in managing what God has given us, He will trust us with even more.

As we prepare for the Great Wealth Transfer in the Philippines, let’s approach it with a heart of stewardship. The wealth that will be passed down is not simply for our own enjoyment, but for the good of others and to advance God’s purposes. Let’s invest wisely, share generously, and ensure that we’re always honoring God in the way we manage our resources.

Proverbs 3:9-10 also reminds us to honor the Lord with our wealth, “Honor the Lord with your wealth and with the firstfruits of all your produce; then your barns will be filled with plenty, and your vats will be bursting with wine.” Let us never forget that everything we have ultimately belongs to God, and it’s our responsibility to use it for His glory.

So as the wealth transfer begins, may we all be found faithful in managing what has been entrusted to us, using it not just for personal benefit, but for the good of others and the glory of God.

I will be back in the UAE for a series of training for the OFWs this September! It’s time to level up learning and be on your way to financial peace!

1) Economics 101 & Investment Outlook (Dubai) — this program will discuss the rudiments of economics especially matters that will have an effect to investors. How does interest affect investments? How does inflation play a factor in growing your wealth? How does monetary policies used to spur the economy?The program will touch up on basic macroeconomic learning as well as a thorough look on the Philippine economy as a bonus feature of the event.  It is high time that we all understand economics and how it affects our everyday lives!

To register, click HERE or email dubaifinancialevents@gmail.com

2) Retirement & Estate Planning (Abu Dhabi)

Studies shows that only 1 to 2 out of 10 Filipinos prepare for retirement. Studies also reveals that the few who prepare for retirement, most of them will only exhaust their retirement funds halfway through retirement. Filipinos are experiencing longer life expectancy but unfortunately, huge costs are needed to live a life of comfort during those years.

Consider this: If you can generate 75% of your pre-retirement income during your retirement years, you will live a life of comfort; if you can only generate 30-50%, you will live a life of struggle. For a 20 year retirement, you need at least 20 years of preparation — if you plan to retire at 60, then you should start preparing at 40.

As and added feature, I will also discuss basics of estate planning under the Philippine setting. Many Filipinos are unaware of why estate planning is important to them.

To register, click HERE or email dubaifinancialevents@gmail.com

HURRY! We are only limiting this offerings through limited slots only.

How many people do you know has applied for Insolvency?  I doubt if you’d know much, if any at all.  For most of us who earn a simple living and are modest wage earners, we think that having an estate is more of a dream than a reality.  We think that our lifetime is too short to catapult our present financial plight into the coveted bracket of lifestyle bliss.

In the Philippines, insolvency is seldom heard.  We have grown to become apathetic.  We should start to realize that building an estate is not exclusive to the rich and famous, to the executives, to the tycoons of the business world or to the demigods of multinational empires.  It is for everyone who has the resolve and prudence of a thinking and financially conscientious man.  The philosopher Nietzsche said, “Fight! Do not Work!”  This does not mean that we should create a labor union and destroy the capitalist which is what Karl Marx declared in his treatise, the “Manifesto.”  This only means that we should create not go along with things that are already created.  Build more, and not just remain contented with the idea of what to build or what has been built.

Indifference about insolvency… does this mean that we are good asset managers?  Perhaps we are.  Even the ordinary man knows that nobody can be sent to jail for not paying debts.  But the state of being insolvent is not all about your liability to creditors.  It is about your liability to yourself, the potential to amass resources, to achieve prosperity.  That does not end there.  By no stretch of imagination would you want to see your good and hard-earned resources go down the drain and drag your family along with it.

Perhaps, you were able to manage properly your investments including the fruits of your labor – your properties.  You are now prepared to leave this productive live of yours.  As that fateful day has arrived, your properties are transmitted to your heirs – your spouse and children.  However, can you still guide your children on how to manage or use the properties you transmitted to them?  Are you sure your wealth will not be spent in senseless parties, gambling, drinking sprees and incessant shopping?  A good life and estate plan would keep you from having to roll inside your grave.

In this country, estate planning has been relegated to the merely inheritance taxes. While estate planning helps you transfer your assets in a cost-efficient manner, it really goes beyond taxes. A good estate plan will help you ensure that what you originally intended for your estate can actually happen even without your physical presence.  Further, good estate plans foster family harmony. How many families do you know ended up fighting each other because of their estate? The intentions of the patriarch/matriarch in leaving an estate is help their children and leave a legacy of love – not strife.

Estate planning is a good tool to minimize, if not eliminate uncertainties in the proper distribution of your estate. Estate planning will help you have peace of mind that you will indeed leave a lasting legacy.

“A good man leaves an inheritance for his children’s children, but a sinner’s wealth is stored up for the righteous.” – Proverbs 13:22