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Generational wealth has become a buzzword these days, with financial influencers on social media raving about the importance of leaving a lasting financial legacy for future generations. But you may be wondering, how can individuals without a family history of affluence establish generational wealth when they’re not making multiple six figures a year?

Read: Ramit Sethi Shares 3 Tips for Becoming Rich on an Average Salary
See: Pocket an Extra $400 a Month With This Simple Hack

Here are some strategies to help you build wealth and pass it along to your heirs even on a middle-class income.

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Pay Down High-Interest Debt

If not managed appropriately, high-interest debt can quickly derail your financial plan and become a crippling burden on your journey of building generational wealth. But where do you start if you’re buried by multiple bad debts?

“Focus on credit card debt first since interest rates are often over 15%,” said Andrew Lokenauth, founder of and an experienced financial planner who has held leadership positions across financial institutions such as JP Morgan, Goldman Sachs and Citi.

The debt avalanche and debt snowball methods are also excellent ways to strategically tackle your bad debts. The avalanche method prioritizes paying down high-interest debt while the snowball method focuses on eliminating the smallest debts first.

Other ways to manage high-interest debt include taking out a debt consolidation loan or using a balance transfer card. Both of these methods can simplify your debt repayment and lower your monthly interest charges.

Discover: 6 Ways To Build Wealth in Less Than 5 Years

Save Regularly in Tax-Advantaged Retirement Accounts

Another way to build generational wealth is by maximizing your tax benefits. Tax-deferred accounts like 401(k) plans give you an upfront tax break when you invest, and you only pay taxes when you withdraw your funds in retirement. On the other hand, tax-exempt accounts like Roth IRAs are made with after-tax dollars, which means you won’t owe any taxes when you withdraw the money once you retire.

“Contribute at least enough to your employer’s 401(k) match program if offered. Roth IRAs are also excellent for younger earners starting out. The earlier you start saving, the more time you allow your money to compound and grow,” Lokenauth said.

Talk to a financial advisor for more personalized advice on how to shield your wealth from taxes and pass down more money to future generations.

Consider Homeownership

Real estate is a popular vehicle for building generational wealth due to its potential appreciation in property value and rental income. According to the National Association of Realtors, middle-income homeowners accumulated $122,100 in wealth as their homes appreciated by 68% in the last 10 years.

If you’re considering homeownership as a generational wealth-building strategy, “aim to purchase a home with a sizable down payment to avoid expensive private mortgage insurance (PMI),” Lokenauth said.

And if you can, “pay extra each month toward the principal to pay the mortgage off early and build equity over decades.” he added.

Invest In the Stock Market

Compounding interest makes even small sums grow significantly over long periods of 20 or more years. So, if you don’t have much disposable income to put in the stock market, don’t worry.

“Contribute what you can each month to low-cost stock market index funds that provide high returns historically,” Lokenauth said.

Some index funds that trade as ETFs and offer wide market exposure include iShares Core S&P 500 ETF (IVV), Invesco Nasdaq 100 ETF (QQQM) and Vanguard Mid-Cap ETF (VO).

Before investing in the stock market, know that volatility is an inevitable part of the investment experience. Avoid succumbing to FOMO (fear of missing out) and blindly following trends. Conduct thorough research, understand the risks involved and tailor your investment decisions to align with your financial goals and risk tolerance.

Invest In Education and Career Development

Investing in education and career development has the potential to accelerate your journey toward building generational wealth by increasing your earning potential.

“This doesn’t necessarily mean expensive degrees. It could be certifications, trade schools, or online courses. By earning a higher income, you’ll have more disposable income to put into savings and investments,” said Taylor Kovar, CFP, CEO and founder of Kovar Wealth Management.

So, if you want to increase your income to speed up your savings rate, consider enrolling in a coding boot camp, upskilling through online courses on platforms like Udemy, or even hiring a tutor to enhance your proficiency in a marketable language like Spanish.

Common Misconceptions About Building Generational Wealth and How To Overcome Them

  • Building generational wealth is only for the rich. Consistently saving and investing even small amounts can accumulate substantial wealth over time. “Even $25/month adds up over time, especially in tax-advantaged accounts gaining 7% to 10% average returns,” Lokenauth said.

  • Investing is complicated. While there are always risks involved in investing, you don’t need a Ph.D. in finance to get started. Index funds and retirement plans at your job are both rather straightforward ways to get your feet wet. If you want to become a more confident investor, educate yourself by checking out online resources or chatting with a financial advisor.

  • Homeownership is a distant dream. Sure, becoming a homeowner takes planning and saving, but with options like government-backed loans and first-time buyer programs, homeownership could be well within your grasp.

  • Relying only on retirement accounts is enough. While retirement accounts are a solid base for generational wealth building, putting all your savings in one basket may not be the smartest move. Instead, “consider diversifying savings across taxable brokerage accounts, home equity, small-business ownership, and other investment vehicles to create a resilient portfolio,” Lokenauth said.

How To Pass Down Generational Wealth

The best way to pass down generational wealth is by setting up a trust to ensure your assets are protected, managed and transferred according to your wishes. And unlike wills, which are public documents subject to probate, trusts provide a higher level of privacy. Talk to an estate attorney about how a trust can benefit you and your heirs.

Once you’ve established a trust, let your loved ones know how to access your documents. This way, if the unexpected were to happen, your family could take over the financial plans.

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This article originally appeared on Generational Wealth Building on a Middle-Class Income: Strategies for Success

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