- Generational wealth is hard to hold on to, and it can be particularly challenging for Black families.
- I have three daughters all under the age of 8, and I want to set them up for success early.
- I’m teaching them financial literacy, investing for them, and instilling good values in them now.
- Read more from Personal Finance Insider.
I am the mother of a 7-year-old girl and two 5-year-old girls. As a personal finance educator and an author, I have a strong interest in building generational wealth for my family.
Unfortunately, this is something that most families do not accomplish. It is estimated that 70% of well-off families lose their accumulated wealth by the second generation, and 90% lose it by the third generation.
For Black families, building generational wealth is even more challenging. According to a study by the Institute for Policy Studies, median Black wealth is expected to go down to zero by the year 2053.
For many years, my objective was to just build my own wealth and then pass it down as an inheritance to my kids. But, I began to spend more time studying the challenges of building lasting wealth, and have changed my approach a bit.
While I want to help my kids have a better life and understand the role that money plays in that, I also want to instill them with financial education, a good work ethic, and good values as well. I have seven plans and strategies to build generational wealth for my kids:
1. I plan to pass down assets while I’m still alive
My father passed away unexpectedly this year, which led to me suddenly receiving an inheritance. Even though I’m a CPA and personal finance educator who openly talks about money, I still didn’t feel prepared.
The inheritance may have been a financial windfall, but it coincided with my grief from the death of my father. As a result, despite my knowledge of all the statistics about generational wealth and know-how for creating a plan, this has still been a painful and scary experience for me.
I can only imagine what this would be like for someone who is not a “money nerd,” and how easy it would be to make rash decisions in grief, and risk losing your inheritance.
What happened to me this year was a learning experience. I would love to make this process much less painful for my kids by passing down my wealth to them while I’m still around.
2. But, we’ve financially planned for emergencies
Life is unpredictable, and that’s why we have an estate plan …….