Building generational wealth can be the key to ensuring one’s family and legacy lives on and while it may seem like a goal too large for one lifetime, building it is actually quite simple. Generally, putting one’s own financial situation first by paying off debt and savings is the first step but even this is not entirely needed to create generational wealth.
While building generational wealth is not intended to make oneself a billionaire, it can forge the way for one’s children, grandchildren and great grandchildren to live that life of luxury.
The world’s richest families, such as the Waltons who own Walmart and have a net worth of $215billion (around £161billion), are masters of this practice, which is what has given them such great financial and social standing over the decades.
One of the easiest trends to spot with these ludicrously wealthy families is the fact that very few of them pass on wealth in cash form but rather use asset accumulation to build their wealth.
In theory this is the simple part: acquiring assets and savings that one doesn’t plan to use in their retirement and ensuring these get passed onto their children when they die, but what assets are actually worth looking into?
Clever Girl Finance shared on their website the six different methods of building generational wealth.
Investing in the stock market
Because the stock market often requires a lot of patience and time, it is arguably the most common way to create generational wealth over the long term and there is no shortage of gurus to look towards for advice.
Investor mogul Warren Buffett has continuously supported the stock market, saying in 2017: “Consistently buy an S&P 500 low-cost index fund. Keep buying it through thick and thin, and especially through thin.”
Invest in property
Owning the right type of property in the right location can set one for life with steady cash flow and appreciating value over the years.
While it is not easy in the modern day to get onto the property ladder, paying off one’s mortgage as early as possible and buying more properties can quickly snowball into a real estate empire that can be passed on.
Private equity portfolio manager at BNY Mellon Wealth Management, Reuben Bianchin commented: “Over the last two decades private real estate has provided a consistent level of income with average annual cash returns of four percent where there has been a steady level of yield. That’s very attractive for a certain type of client.”
Build a business
This is where the …….