As a parent, you always have your children's
best interests in mind. You want your kids to be able to provide for their own
children, and the next generation, and the generation after that. To be able to
do this, you can build generational wealth to benefit your family lineage. But
what is generational wealth and how do you build it?
Generational wealth is wealth that is
transferred from generation to generation. Wealth can include cash, real
estate, antiques, securities, business ownership, and other types of assets.
Another form of generational wealth is creating opportunities, such as paid-for
higher education, the ability to take risks by having money to fall back on, or
a position in the family business.
The Goal For Generational Wealth?
Your goal for generational wealth is
completely up to you. You have full control over what legacy you want to leave
for generations to come. However, several common goals of generational wealth
Preventing financial struggles in
Allowing your family members to
choose a career path based on interest and not finances
Providing education to your family
members without the financial burden of student loans
Are Ways To Build Generational Wealth?
Below are 5 ways to build generational wealth:
Multiple Streams Of Income
Building several streams of income allows you
to not stress about losing one source of income. Also, you can utilize income
streams to fund investments or put them into savings accounts as a part of your
generational wealth building. A few examples of income streams are business
ownership, dividend-paying stocks, and rental properties. These income streams
can also be transferred to the next generation to provide income for them.
- Investing In
Real estate is a spectacular investment
vehicle due to its appreciating in value over time. It's also a great way to
earn cash flow from your investment, creating another stream of income. You can
purchase property over time, turn the properties into rentals, pay it off over
time, then give the paid-off property to your children. You could also transfer
ownership of the income-generating rental property to your child. Or you could
use the profit from the property to save for your children.
Investing is key to building wealth early and
often. The earlier you begin investing, the longer amount of time your savings
have to compound interest. For the best investment outcome, you want to have a
diversified portfolio with a mixture of asset classes and stocks from different
industries. This is one of the best ways to build wealth to leave behind to
Life insurance can be a lifesaver. After you
have passed away, you don't want to add the burden of financial strain on top
of your loved ones' grief. To combat this, you can purchase a life insurance
policy. A death benefit is a component of the life insurance policy that will
be paid out to your beneficiaries upon your passing. This death benefit can
also be tax-free if your total estate is below the tax threshold.
Unfortunately, many schools do not teach a
personal finance course. It is up to teach your kids, whether they are a
teenager or an adult, about personal finance to make sure they are making smart
choices and decisions. Building a foundation of financial literacy will set
your children up for success.
You want your children to be successful and
one of the best ways to do that is by building generational wealth. One of the
best ways to ensure you're setting your kids up for success is by having
an experienced financial advisor by your side. Our advisors at Genesis
Financial Group are here to make sure you're on the right path to building
generational wealth. Schedule your consultation today to get started.