Whenever we look at the wealthiest people in the world, we find that some of them are self-made, and some were born “swimming in money.” That is because the wealth has passed down from one generation to the other in their families. That is called generational wealth, and it is not for the one percent only.
Everyday people who make smart decisions can give a step up the ladder to their children and grandchildren by building wealth, then protecting, defending it, and passing it on to the next generation to give them a way in in life.
So, in this article we look at how you can build generational wealth, that will give your offspring a leg up in life.
How to build generational wealth
To build generational wealth is easy in concept because you may have read that you simply have to acquire assets or save cash to build wealth. While in practice, it is not so easy especially if you are struggling to build up your own savings. How then can you think of saving for the next generation?
The best route to take if you find yourself in this state is to get your own mindset right and you will get your finances in order; and once you have enough savings to fund your golden years, you can then start saving for the next generation.
Here are some of the best ways to help you build generational wealth;
Invest in real estate.
Real estate is one of the major ways to build wealth long term. With its appreciating value over time, and the potential for steady cash flow, it’s an ideal path to generating wealth.
Invest in the stock market.
Investing in the stock market might seem daunting to you, especially if you have never tried it; however, it is a vital way to build wealth for generations to come. Most of the wealthy people you admire invest in stocks.
Build a family business.
Family businesses have amazing potentials for success – with more than 30% of them being passed down to the second generation.
To be realistic, not all family businesses make it to the next generation, but yours can, especially if your interests and abilities align with that of your children. However, if your children are unwilling to take over the family business, you can consider selling it and fund generational wealth in another way.
Invest in your children’s education
Investing in your children’s education is another way to build generational wealth. Helping them acquire a degree or paying for them to acquire high income skills will avail them the opportunity to land high paying jobs that will help them handle their finances better.
Invest in creating multiple streams of income
Having multiple streams of income will help build generational wealth faster. As a matter of fact, the average millionaire has seven streams of income. There are different kinds of income streams, but the best is passive means of income, when you don’t have to be present to make money. The money just trickles in after the first initial set-up has been done by you.
Teach your children how to handle their personal finance
A financial report estimated that 70% of families lose their wealth in the second generation and 90% lose it in their third generation.
These statistics are impossible to ignore, and can make one question the point of building generational wealth, when the ones after you might just squander it. Well, the loss of generational wealth can be prevented through financial education.
In conclusion, there are several ways to build generational wealth. You just have to find the one that works best for you. Also, you can seek expert help, if you find it a bit daunting to do it by yourself. Nonetheless, no matter the strategy that you decide to adopt to build wealth, please pass down the financial education to your children.
