An Introduction to Generational Wealth and How to Get Started

When you work tirelessly to build wealth, you not only want it to benefit your family now, but you also want your investments to help your loved ones achieve their goals and dreams in the future. That’s why investment planning for the long term is crucial. Qualified generational wealth advisors will help you make sound investment decisions to boost your wealth and build your portfolio for the future.

What Is Generational Wealth?

Generational wealth is the collection of financial resources passed from parents to children throughout generations. Any significant assets that you can transfer to your descendants become part of your legacy, whether it’s money in a bank account, stock market investments, or a brick-and-mortar building.

But generational wealth doesn’t simply mean passing resources along, it’s anything you can give to your children that will help them be more financially secure. This includes helping your children become more financially literate.

Why Is Generational Wealth Important?

Generational wealth creates a strong foundation for your children to build upon before passing it down to their children.

One of the best examples of the benefits of generational wealth is setting up a college fund for your child. Paying for a portion or all of your child’s university or college tuition means they won’t be struggling to pay down student loans as they venture into their new life and career post graduation.

Without massive student debt causing them anxiety and sleepless nights, your child can focus on building their career and investing in a solid financial future.

Build Generational Wealth by Investing in the Stock Market

Investing in stocks can seem daunting if you have minimal experience investing in this way, and if you haven’t conducted preliminary research. While the stock market carries some risks, stocks are an excellent way to begin building wealth through liquid assets.

You can dip your toes in by investing in inexpensive index funds and adjust your investment strategy at any time. Compounded interest and reinvestment of dividends can make long-term stock investments extremely lucrative.

Build Generational Wealth by Investing in Real Estate

Real estate investments require more work, but they offer more rewards with fewer risks than stocks since real estate rarely depreciates. By purchasing a residential property with a shorter-term mortgage, you can rent it out and have the tenants cover the monthly mortgage payments.

Once the mortgage is paid, the rental income is pure profit. When your children are older, they can move into the house themselves or simply inherit it and collect the rental income.

People sometimes shy away from real estate investments because it requires them to manage tenants and pay estate taxes on the property. However, you can claim multiple tax deductions for owning the property.

Build Generational Wealth by Creating a Business and Passing It Down

While creating a business is the most time-consuming way to create generational wealth, it’s also one of the most effective options. Growing a business takes time, but if your business allows you to do what you’re passionate about, you’ll find joy in providing for yourself and your children.

Starting a business is now easier than ever, thanks to the Internet. Involving your children in your business even in the start-up phase may get them interested in its growth and success. Additionally, they will be invested in taking over once you retire.

Crafting Your Legacy

Our generational wealth advisors are eager to help you expand your investment portfolio.

To learn more about what our expert accountants at Charles Ghadban can do for you, book an appointment online or call 613-234-7856.