In the busyness of working hard and making money to ensure that you keep up with the demands of your aging parents and growing children, all while trying to balance your own personal affairs, it is easy to get caught up with the present needs that you can totally begin to lose sight of the importance of building generational wealth.
Generational wealth is wealth that is passed down from one generation to the next. It is also known as family wealth or legacy wealth. This happens when a person has, over a period of time, generated wealth through real estate assets, stock market investments, or a company/ business, etc.
One of the key concepts of creating a generational legacy is first to ensure that you secure your financial goals in order to make the necessary preparations for your wealth to outlast you and continue to benefit your family even after you are gone.
Don’t take it for granted that your current income will save you and your family when the realities of life hit. Sickness, death, and the day-to-day demands of your dependents can clean you out in the blink of an eye. This is why it cannot be stressed enough that you should make it a priority to ensure that your parent’s and your children’s financial future is secured if for whatever reason you are no longer around to physically provide for them.
There are several ways in which you can build generational wealth, you can:
1. Invest in the stock market: this helps to create generational wealth over the long term as some stocks have the potential to continue growing for decades.
2. Invest in real estate: this is another way of building generational wealth for the long term. As property values increase over time.
3. Build a business to pass down: this might be easier said than done. But having a successful business that you can pass down to your children is a good way of setting them up for the future.
4. Take advantage of life insurance: life insurance provides the means to protect your family in the event of your untimely passing. By making an effort to invest in a life insurance plan, you are preventing financial tragedy for your children.
5. Invest in your child’s education: having a good education can provide a way for your children to support themselves as they are able to pursue high-paying jobs that can help them take on their own finances. If you are able to help your children complete college without any debt, then you are helping them to set up a bright financial future.
Knowing how to create generational wealth is very important but if you generate wealth and have no plan in place to ensure that it is properly handed over to your family then what would you have secured your wealth for? Let’s ensure that doesn’t happen, here are some tips to help you smoothly pass on generational wealth:
1. Create an estate plan
2. Write a will
3. Set up custodial accounts
4. Name beneficiaries for your accounts
Building wealth to last for generations is necessary. Remember once you have your own finances under control, the next step is safeguarding your family’s future.