Generational wealth is a term that many have heard of yet few have mastered. The goal of generational wealth is to be able to pass your wealth to your children and then they can pass it to their children. This does not mean only your finances it also takes into account properties, antiques, collections, and even education planning plays a role in generational wealth.
Now that you have a basic understanding of generational wealth you might be wondering how to starting thinking about this within your own financial life. Below you will find a few ideas to help you start planning.
Investing in Education:
Planning to pay for all or part of your children’s college tuition can be an imperative step in building generational wealth. For many people a college degree comes with loans and debt. Helping your child get their degree without added debt helps them start their career without added stress. It also allows them to start growing their savings even faster since paying back loans isn’t necessary. When it comes to education planning there are multiple options that are available to you. We listed out a few available options in a recent blog post on education planning that you can find here.
Create a Trust:
Setting up a trust today can help ensure that your wealth carries on through generations. There are a few ways that setting up a trust might help you to create generational wealth. A trust allows you to say how and when the assets would be utilized, even after you pass. A trust helps avoid the probate process which would help your beneficiaries reduce legal fees and could possibly help with inheritance taxes.
Real Estate:
Real estate can be another tool that can help you build generational wealth. This does not simply apply to your current home although paying off your home would help your beneficiaries. Real estate can also be used as an investment tool. If you have vacation homes or rentals these are items that can then be passed to your beneficiaries that they can then pass onto future generations.
Financial Planning:
Having a financial plan is a valuable tool in planning for generational wealth. If you have an advisor you should ensure that they know the legacy that you want to leave behind. If you do not have an advisor you can contact us – we would be happy to help you plan for your future! Having a plan and regular check ins with your advisor will help make sure that you are on track to hit your goals.
Collectibles and Jewelry:
Jewelry is often handed from generation to generation and can play a part in generational wealth. It is important to know what you have, what will be passed down, and what it is worth. The same would go for any other collectibles that you might have such as artwork or antique jewelry.
These are only a few ways that might help you plan for generational wealth. If you know that you want to start planning for what your legacy will be but are still unsure of where you start – we can help. Planning for the future is one of the most important things that you can do and we would be happy to help you get started! Contact us if you would like a consultation!
Disclosures:
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.