Guest Blog Post by Vivian London-Crooks
Accountant/CEO
11 W. Prospect Ave.
Mt. Vernon, NY 10550
Office Phone: 646-851-7264
Fax: 914-243-1263
Email: info@londonstaxservices.com
www.londonstaxservices.com
Do you see many individuals who seem to have it “made” in life? They are debt-free and have never had to worry about student loans, having a down payment on their home, or starting a business so easily. So how are they able to do that? In many cases, these individuals come from the generational wealth that their parents and/or grandparents were able to build. But you can also build generational wealth for yourself and your family.
What is generational wealth? Generational wealth usually includes financial assets such as property investments, money, or anything that has any type of monetary value. This wealth can help elevate the burden of your family and future generations being stuck in the perpetual cycle of poverty and debt.
Unfortunately, 75% of most generational wealth does not make it past the second generation and 90% will disappear by the third generation. The key to having long-lasting generational wealth is educating each of the generations on how to manage, maintain, and grow the wealth that has been passed down to them.
You are now probably asking how you can build generational wealth right now when you are barely making ends meet. It will not be an easy task, but it will pay off in the end. Here are some tips on how you can begin building generational wealth and also help to ensure it lasts for future generations.
1.) Invest in Your Children’s Education
Ensuring that your child or children have a proper education will help to mold financially independent adults, which will help to grow the generational wealth since they will not have to rely on the wealth to live on. You should also be educating your children on losses and failures and how they can either overcome them or avoid them.
2.) Invest in the Stock Market
The stock market is one of the best ways to invest and grow the wealth for your family. This is passive wealth so any income you receive will be taxed differently (usually less) than the income you receive when working a job. Working with a professional and experienced financial advisor will help you create a custom investment portfolio to achieve your long-term financial goals.
3.) Invest in Real Estate
Many individuals are turned off from investing in real estate as they feel the process is too costly and complex to deal with. They also are turned off by possibly having to become a landlord and deal with the hassle of tenants. Real estate is one of the easiest ways to build generational wealth and there are a number of programs available for buying investment properties just as buying a home for yourself. You also have the option of living in the property in the beginning and then renting or leasing it later.
4.) Create a Business To Pass Down
Businesses are another great asset that can be passed down from generation to generation. Even if your children do not specialize in what you do, they can still obtain ownership of the business and hire employees to run the daily operations. Many successful companies, such as Disney, are still owned by the Walt Disney family, but hire CEOs to manage and operate the business.
5.) Have Life Insurance
Life insurance is a great asset that can be passed down generationally. Life insurance ensures you and your family have a safety net that will protect all of you in the event one of you were to pass away unexpectedly. Life insurance will help your family not only have the ability to survive and pay bills but also to have enough capital where they can invest and build wealth.
Generational wealth is crucial in helping families to get out of poverty and debt once in for all. You and your family making the listed investments will lead to breaking that long-term cycle of living paycheck to paycheck that a majority of Americans are caught in. Just remember to educate your children and grandchildren on how to effectively build, manage, and grow the wealth so your family doesn’t end up as the other statistic of losing the generational wealth.