Thinking about the future can feel scary, especially when you think about your family or future children. Without having had to experience it, most are already familiar with what generational wealth means.
In today’s guide, we’ll break down how you can start building wealth for your family today so your future feels planned and protected.
What is generational wealth?
Generational wealth includes assets passed from one generation of a family to another. Typically, it starts with the first generation accumulating some type of wealth (property, cash, etc.) which they pass to their children, who then pass it down to their children and so on.
Why is generational wealth important?
Generational wealth is important because it provides stability for your future family and generations to come. In addition, this financial security enables you and your family to use this money for further wealth building instead of spending it on expenses that could lead to debt.
How do you build generational wealth?
Starting a family can happen quickly, so the best time to create generational wealth is now. To help you get started, we’ve put together our top two ways to start building generational wealth without having lots of money.
Historically, the idea of investing has seemed out of touch unless you already have lots of money. But now, some platforms provide easier access to investing in things like stocks, shares, bonds and ETF’s with sometimes as little as a dollar.
2. High-interest savings account
If you’re more risk-averse, a great way to start building generational wealth is by making frequent contributions that you can afford to a high-interest savings account. Then, with the power of a high-interest rate and compounding interest, your hard-earned money can grow quickly.
Examples of Generational Wealth
There are several ways that you can build generational wealth. This list is not exhaustive but a great start for those who are starting to think about building wealth for future generations. Here are a few examples:
- Family heirlooms
For example, Jane and John Doe have decided to invest in property. They have a son, Jim Doe, who they pass down the property to in their Will. After Jane and John pass, Jim decides to use the property as a rental and uses the earnings to buy additional rental properties.
Then by the time Jim decides to retire, he passes his rental property investments and business to his children, who continue to grow the business, more property and investments. The continuation of the first investments onto other generations is generational wealth.
Generational wealth is sometimes an afterthought when you start writing your will, especially if you don’t have a family yet, but now is the best time to start building wealth. Your contributions today will compound over time and grow in the years to come.
Ready to start planning for the future? Start by writing your will online.