Building Generational Wealth

Planning for the future and building generational wealth might seem like a lofty goal, but it’s still achievable. It helps to break this goal down into smaller, actionable steps. Here is my road map for building generational wealth that you can start acting on right away.

1. Invest your assets

One of the most effective ways to grow wealth more quickly is to put your money to work. Currently even the best interest rates are about 0.4- 0.5%, which is nowhere near our inflation rate of 7.9%. To beat inflation, you need to start investing in stocks and real estate ASAP.

If you have no idea how to start investing, there are apps that have made investing more accessible to beginners, such as Acorns and M1 Finance. Many offer intuitive platforms while supporting you with tutorials and education. Always approach the market with a long-term growth mindset and pay no mind to short-term moves. You can also work with a financial advisor who can advise you on investment decisions that best fit your individual circumstances and financial goals.

Every investment portfolio should include some real estate properties. Save for the occasional economic downturn, real estate consistently appreciates in value over time. Start out buying your own home and work your way up to investing in rental properties to guarantee passive income for many years.

2. Invest in your child’s education

Your children will have increased access to high-paying opportunities with a college degree. If you’re able to set your child up so that they can go to college without taking out any loans, you’ll give them a head start financially.

So many young college graduates have a hard time juggling their student loan payments with a low salary and high costs of living. This can quickly lead to additional debt, which will delay the process of building a solid foundation of their own. Try to put money away for their education as often as possible.

3. Create trust(s) to protect your assets

One of the most popular estate planning methods of protecting assets is creating a Trust. A Trust is a fiduciary agreement that holds assets for one or more beneficiaries. Through the Trust, you can specify which assets you want to go to whom. You can also create some stipulations to make sure your hard-earned wealth is protected and distributed in a way that aligns with your generational wealth vision. Stipulations can be set up so that your beneficiaries will receive their inheritance once they are prepared to use it wisely and responsibly.

When setting up your plan to build generational wealth, here are some things that should be considered:

  • · How to best protect your assets while you’re alive today

  • · How to minimize taxes at the time of transfer

  • · How to set up future generations for success without potentially jeopardizing any federal benefits they might receive

  • · How to ensure that future generations can continue building upon the wealth instead of eroding it