Generational fortune building can be key to family and inheritance survival, and while it may seem like too big a goal in life, it is actually quite easy to build. Basically, the first step is to put your own financial situation first through debt repayments and savings, but even this is not absolutely necessary in order to create generational wealth.
While generational fortune building is not intended to make you billionaire, it can pave the way for your children, grandchildren, and great-grandchildren to live luxurious lives.
The richest families in the world, like the Waltons, who own Walmart and have net worth of $ 215 billion (roughly £ 161 billion) are masters of this practice, which has earned them such great financial and social standing over the decades.
One of the easiest trends to spot among these ridiculously wealthy families is the fact that very few of them are giving away wealth in the form of cash, but instead use wealth accumulation to build their wealth.
In theory, that’s the easy part: acquire assets and savings that you don’t want to use in retirement and pass them on to your children when you die, but which assets are worth considering?
Clever Girl Finance shared the six different methods for building intergenerational wealth on their website.
Invest in the stock market
Since the stock market often requires a lot of patience and time, it is arguably the most common way to create long-term generation wealth, and there is no shortage of advice.
Investor mogul Warren Buffett has been a steadfast supporter of the stock market, saying in 2017, “Consistently buy an S&P 500 low-cost index fund. Keep buying it through thick and thin and, above all, through thin. “
Invest in real estate
Owning the right type of property in the right location can create property for life with steady cash flow and appreciation over the years.
Even if it is not easy to get on the real estate ladder these days, the earliest possible repayment of the mortgage and the purchase of further real estate can quickly become an inheritable real estate empire.
Reuben Bianchin, Private Equity Portfolio Manager at BNY Mellon Wealth Management, commented: “Over the past two decades, private real estate has achieved consistent income levels with average annual cash returns of four percent with constant returns. This is very attractive for a certain type of customer. “
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Build a company
This is where the Walton family made a name for themselves when they founded Walmart in 1962. Since then, the company, valued at $ 54 billion (around £ 40 billion) each, has been passed down to the current generation, Jim and Alice Walton.
Not every business is guaranteed success, and not on the Walmart scale, but it is a surefire way to make an income after death.
For this to work, the children need to be involved and involved in the business from an early age, knowing how to do it and what it takes to be successful.
Furthermore, one cannot force one’s children into the business either, and when it is clear that they have no intention of running the business, selling it can create an equally large generational wealth fund.
In the event of tragic or unexpected loss, life insurance can often save the day and offer what you never had.
In addition, the untimely death of a breadwinner can create great financial burdens for the bereaved family, and life insurance can help fill the gaps to prevent financial tragedy for future generations.
Invest in education
Learning and perfecting in-demand skills can help secure higher paying jobs while ensuring that a solid financial education maximizes the chances of getting a salary regardless of its size.
There should also be an emphasis on teaching personal finance and good money management at home.
Put simply, children cannot maintain what they were never taught. So by learning about budgeting, taxes, wealth accumulation, and debt, you can make sure that whatever you leave behind after your death is fine with it.
However, education is becoming more of a burden as the average student loan debt is over £ 45,000. So, avoiding this debt requires good planning and savings – or, if this cannot be avoided, repaying it as quickly as possible.
Create multiple sources of income
Saving, investing and paying off debt is incredibly difficult when living from paycheck to paycheck. While he may not be able to increase his salary with a single job, he can increase his income by creating multiple streams of income.
The average millionaire has multiple sources of income, which means failure is unlikely to even affect his or her net worth.
This technique helps to strengthen financial stability against tragic circumstances such as layoffs or an accident with long-term effects.
Xavier Epps, finance expert and founder of FinanceGuyX, said this method could be incredibly lucrative for younger people: “Young people today have more skills and access to resources than older generations – they can turn their hobbies into sideline activities that can supplement their income . If your sideline is doing well, you can consider quitting your 9-to-five job and becoming a full-time entrepreneur with more control over your financial growth. “