For many individuals, the word “generational wealth” may signify a lot of different things. Wealth can be summarised as happiness, prosperity and abundance and can be linked closely with money but what is generational wealth? Why is it important?
Why is generational wealth Important?
The phrase “generational wealth” refers to assets passed down from one family generation to the next. In some circumstances, assets are passed down the generations in the form of an inheritance. They are passed down to the following generation in some cases while the sender is still living.
Building generational wealth is a simple notion. All you have to do is accumulate assets or save money that you don’t plan to use in retirement. Then, when you die, you leave those assets to your offspring.
The issues that make it tough to go ahead financially in the modern world are mitigated by generational wealth. Even small payments can give beneficiaries a leg up on the competition, allowing them to live more comfortably and possibly avoid taking on debt for things like schools and housing.
The greatest approach to pass on wealth from generation to generation is by:
- Investing in the stock market
Many people have been motivated by the epidemic to work for a better financial future, and many have taken on their first challenge: stock market investment and this can be very beneficial to generational wealth as it provides another income stream for the household and can be invested in over time.
- Building a business to pass down through your family line
Forming a business idea and building a brand may not get your income straight away into your account but it will set up a viable income source for your family and future generations. Plus, a home-based business can minimise your income tax.
- Take advantage of life insurance
- Investing in your child’s education
- Creating multiple streams of income
- Setting up a crypto-currency and building on your income
- Invest in real estate to be passed down to the next generation:
The majority of Australians pass along their wealth through homeownership. Your parents’ house rises in value over time and is passed on to the following generation.
- Create a trust fund for your family
- Investing in your life insurance policy
Another way generational wealth begins is as a beneficiary of a life insurance policy. You can use the money to pay off debts or establish a company.
- Teach your children good habits when it comes to finance’s and not to go into debt
It is critical to pass on the information we gain to future generations, especially when it comes to financial matters. There’s an old proverb about standing on the shoulders of giants and learning from their mistakes. Our generational job is to not just inspire the next to adapt, but also to thrive in affluence. To succeed where we may have failed, while simultaneously teaching them to appreciate the source of their money.
If you need help in building your generational wealth please let our friendly team know.