What is generational wealth and how do you build it? – ABC News

As economists continue to predict the coming of a recession, many are left wondering what they can do to secure and potentially grow their wallets amid the chaos. For some, however, a recession may just be the perfect time to develop generational wealth that could last for years come.

Generational wealth refers to the financial assets that are passed down from one generation to the next. That could be in the form of property, investments, cash money, or other things of monetary value.

This kind of wealth can help ensure that one’s future children or relatives will have some kind of financial support.

However, building wealth isn’t and hasn’t been easy for everyone.

Because of systemic barriers – including racial discrimination in housing, employment and banking – the typical white family has eight times the wealth of the typical Black family and five times the wealth of the typical Hispanic family, according to the Federal Reserve.

Those living paycheck to paycheck make up 54% of the country, according to lending company LendingClub. A 2021 report from the Federal Reserve showed that roughly 36% of Americans likely don’t have enough money to cover a $400 emergency.

Having expendable wealth or generational wealth to build upon is a privilege, according to Jully-Alma Taveras, personal finance writer and founder of Investing Latina. It can be difficult for people with limited income to even begin taking steps toward accumulating wealth.

Catherine Collinson, CEO and president of the nonprofit financial wellness organization Transamerica Institute, says there are still ways for people to implement wealth-building practices into their routine.

“Living paycheck to paycheck can be daunting, especially now amid skyrocketing inflation and the lingering effects of the pandemic,” said Collinson. “Although it’s much easier said than done, it’s important to stay positive and avoid getting discouraged or overwhelmed – because that can be counter-productive.”

There are different routes that can be taken toward building wealth, and the path won’t look the same for everyone, financial experts say.

This journey can begin with small steps as easy as educating your children and family on financial planning, to steps as big as owning property that is likely to accumulate value.

Educate your children and family on financial literacy

Collinson recommends …….

Source: https://abcnews.go.com/Business/generational-wealth-build/story?id=85567073