You’ve probably heard the phrase “Generational Wealth”, but not everyone understands what it is or how to make it happen. By no means am I a financial planner or claimed financial expert, but I’ve made some smart decisions over the years and know a lot of other really successful people. Creating generational wealth means to accumulate assets that are passed down to your children, grandchildren and so on.
First of all, you shouldn’t do it alone… you need a team of professionals, experts in their craft, to help promote your best interests. This would include the following conceivably:
- Real Estate Broker/REALTOR® – (me for example)
- CPA/Accountant
- Insurance Broker/Agent
- Financial Planner / Stock Advisor
- Attorney / Paralegal
- Mortgage Lender / Broker
- Estate Planner
Yes, we certainly have some referrals in this regard for whoever needs. Conduct your diligence and find the right people that you’re comfortable with and can trust.
What are some examples of Assets, which contribute to Generational Wealth?
- Real Estate
- Stocks & Bonds
- 401K / IRAs
- Whole Life Insurance
- Gold, Silver & Commodities
- Cash
- Vehicles and other Collectibles (Antiques, Guns, Tools, etc)
When looking at Real Estate, of course where you live should immediately come to mind, but that’s not all. There are so many ways to invest in Real Estate these days… residential, commercial/industrial/land/multi-family and partnerships. Whether it’s a long-term hold rental property or short-term seasonal, either can present great opportunity (and risk). Face it, life has become expensive just to survive. Many conversations I have with people migrate to their concern over how their kids will be able to afford to buy their own home. Some will and some won’t. That’s reality, but you can create a lasting legacy by making your money work for you today.
Not just buying more property, but also investing. When I say investing, I don’t mean solely buying stocks. Having a financial advisor is key so they can place your money where it best fits your goals. Everyone is on a different timeline and spectrum for eventual retirement + lifestyle so needs are individualized. If you have large sums of money sitting in a bank account with Chase, Wells Fargo, etc that may not be the greatest thing. You can move funds, both personal and professional, into money markets where you have quick access to the cash, but can earn a 4-5% return.
Protection and retention of assets is another important component. That’s where the legal and insurance pieces really come into play. A personal ‘umbrella policy’ may be wise as you accumulate assets and wealth. Sometimes it can make sense to form a trust and sometimes not. If doing so, there are numerous nuances to be aware of so do your homework first.
Passive income is a big area to help preserve what you’ve built and not spend it all and run out of money. Who knows what social security will look like 20, 30 or 50 years from now so don’t rely upon that as the only way to live, if at all possible. Passive income means a steady stream of income that doesn’t require active work to maintain. Real Estate comes to mind first for me as those paid off properties generate thousands of dollars per month for you to collect, without too much effort or little effort when a property manager is hired. If you can, buy rental property and don’t take the immediate cash flow… get that asset paid off quicker.
Other passive income examples would be CD’s, Dividend Stocks and residual income from the sale of a business you owned/operated.
I’m an open book so please never hesitate with any questions, real estate related or otherwise.
