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You’ve probably heard about the term generational wealth and thought of the kind of financial legacy you’d like to leave for your children. Perhaps you’ve taken more vital steps to buy life insurance to act as financial security or set up a will regarding the distribution of your property to your loved ones once you’re gone.
But you might not have thought of how your children’s inheritance will be passed down to younger generations. This is where generational wealth comes in — which means anything you leave behind for your children could carry on from one generation to the next.
If you have no idea where to get started, don’t worry. Keep reading to understand what generational wealth is, why it is important, how you can build it, and how you can pass it on to your loved ones.
What Is Generational Wealth?
Generational wealth is a collection of financial resources passed down across multiple generations in a family. If you can leave behind a noteworthy inheritance to your descendants, that’s generational wealth. This could include anything from money, real estate, stock market investments, business to anything else with monetary value.
Many people think of money when it comes to inheritance. But you can pass along skills and values that your children can use to build better lives and create wealth that could eventually be passed down to your grandchildren.
That said, if you’re building a business, investing in stocks or real estate so that you can leave them behind for your kids, then you’re contributing to the growth of generational wealth in your family.
What Is the Importance of Generational Wealth?
People who inherit generational wealth have financial advantages over those who do not. For example, when you fund your children’s college fund, they don’t have to struggle to pay off student loans. Instead, they could be saving towards purchasing their first home or future retirement.
Generational wealth creates a solid foundation for your descendant’s financial success, who can continue to build sustainable wealth over many generations.
How Can You Build Generational Wealth?
Building generational wealth can seem intimidating, especially if you have no idea how to get started. However, it’s possible if you have a solid financial strategy. To generate wealth that you can pass down to your children, you need to save money or obtain resources you won’t spend in retirement.
It is, therefore, crucial to save for retirement and other financial goals before you go down the road toward building generational …….