Are you enthusiastic enough to be the next Rockefeller? In this article, I will list ways that will help you build wealth so solid that it will sustain one or more generations – now you have to get to work, as earning money is far from being a walk in the park.
It is not a secret that the wealthy always have it easy, despite the constant glamouring of meritocracy and equal opportunity. Money does not buy happiness, but it does pay for better health care, top-notch education, and high-class neighborhood. Think it this way, people with generational wealth have a better life. You may want to read our part one if you haven’t done so, otherwise, let’s start with how to build generational wealth…
How To Create Generational Wealth?
4. Life Insurance
Most of the time, families don’t prepare for an unfortunate event like death. When the time comes, and you can’t leave assets to your children, they could face financial hardship.
However, if you invest in life insurance, they will have an amount of money that can sustain them until they find another solution. There are different life insurance companies that offer different policies, and you should go through them and choose the one that suits you best.
5. Invest In Your Children’s Education
Creating generational wealth is one way to sustain your children, but investing in their education is another way they can support themselves. Education is something you can’t steal, or that will expire one day. If you provide your children with a top-notch education, they will always have it.
However, some graduates have found themselves in financial distress because of the debt they incurred from college. So if you can help your kids go to college without debt, you will take the financial pressure off of them.
6. Teach Your Children Personal Finance
Research has shown that generational wealth decreases over time; 70 % of generational wealth is lost in the second generation and 90 % in the third. Reading that, you may think that it is useless to build wealth if it goes to waste.
Yet, it is possible to prevent lost generational wealth and even multiplying it later on by teaching your children how to manage finances. After all, you cannot expect your child to grow your wealth if they have no concept of the value of money.
7. Different Streams Of Income
The easiest way to create generational wealth is through multiple streams of income. Did you know that most millionaires have at least 6 income sources? It does not need to be a second job; you are not a robot – it can be any type of passive income.
Examples of passive income are rental properties, advertisements, and so on. Passive income does not require much work. One good example of passive income (if you are creative) is writing a book or creating a song. Even after your death, your children can earn royalties on your copyrighted material.
8. Pay Yourself
Paying yourself first doesn’t mean overspending your money, and it means that as soon as you receive your paycheck, you put the money into your savings account and investments. That should be a priority, not seeing what’s leftover after expenses and then saving.
If you save only at the end, you will spend your money on everything else because it will seem very important.
Now that we are done with building your generational wealth, you will have to know the leeway of distributing your resources to your future generation for them to prosper. Read our part 3 for ways to distribute your wealth. Let us know in the comments if you find any of these methods interesting…