Generational wealth is more than just about how much money you have, it is also about how well you build your wealth and pass it down to your children or grandchildren.
If you are a parent or a grandparent for that matter, you might have probably asked yourself what kind of financial legacy you would like to leave for your children or grandchildren. Maybe you have explored buying life insurance for the financial security of your family or maybe you are still thinking about how your children’s inheritance and your family’s valuable financial lessons could eventually be passed down even to their children and the succeeding generations.
According to experts, generational wealth compounds, which means that anything that you give to your children could help them build a better life for your grandchildren, who in turn could pass along the assets, skills, and knowledge to your great-grandchildren. It’s the kind of legacy that would continue to generate wealth and financial stability beyond your lifespan.
As we all know, not everyone can leave their children a significant financial inheritance, but despite the circumstance, we can still do our part in giving the next generation the tools and tips they need in order to succeed.
What is Generational Wealth?
Generational wealth refers to any kind of asset that families pass down to their children or grandchildren, whether in the form of money, investment funds, stocks and bonds, real estate properties or even their companies.
Many parents are hoping to leave their children an inheritance but if you can’t leave your children some money, you can still pass along skills, values, and tools that your children can use to succeed, improve their lives, and increase their opportunities to build wealth that they could eventually pass down to your grandchildren.
Why is Generational Wealth Important?
If you are starting from scratch with your finances or starting out with a large debt burden, then you should realize the importance of generational wealth.
Having the ability to fund your college education could have a tremendous effect on your financial future. Instead of playing catch up to pay down your student loan debt, you could be saving for your first home or your future retirement.
As you go on with your personal finance journey, you might have already realized that it is not always easy to recover from your financial mistakes. What if your parents were able to guide you financially? It could have prevented you from spending beyond your means or made you realize the importance of keeping a saving habit.
The more you think about your own personal finances, the more you realize how important generational wealth can be. If you have kids, then you may already begin thinking about their financial future. Imagine how differently things could turn out if you take the time to educate them on personal finance and help them secure their financial future as early as now.
How Can You Create Generational Wealth?
There are various ways to leave your children an inheritance. Remember, not all inheritances involve money. In addition to making your children the beneficiary on your investment accounts or insurance plan, you can also give your children other tools and teach them the skills they need, good education, and strong financial values.
We have listed down different ways to create generational wealth for your family.
1. Business ownership
Family businesses have a huge potential for great success. Most family-owned businesses are passed on to the second generation, especially if your interests and abilities match with your children’s, it is likely that they will want to take over the businesses you’ve built.
If you are currently running a business, you do not only have the ability to earn your money and be your own boss, but also pass the business along to your children as they get older. This will provide them the opportunity to grow the family’s wealth over time. For a more successful transition, you can start them young by engaging them in the business at a young age. They need to know how the business operates and how to successfully continue in the said business.
If you are going to look at the country’s millionaires, the majority of them made their wealth through business ownership. It may not make you a millionaire today but it can still give you the opportunity to support your family and it can also be continued by your children who could take care of the business and grow it over time.
There are people though who are hesitant to take risks when it comes to starting a business. But you have to keep in mind that there are also risks involved in working for someone else. Starting a business could change your life not just right now but also for the generations to come.
You can also turn your long-term investments such as the stock market into generational wealth. The stock market can be a great way to build wealth over the long-term because it has the potential to continue growing for decades.
Investing in the stock market might sound risky and scary if you’ve never tried it but remember that it is an important way to build wealth.
If you are new to the stock market, the best place to start is with low-cost index funds, which offer low fees and long-term growth. If you want to learn more about stock market investing, there are a lot of courses online to help you get started.
Education is knowledge and knowledge is wealth. Teaching your child life skills and investing in their education can provide a way for them to support themselves. These will give them the opportunity to pursue high paying jobs that can help them establish their finances in the long run.
No one can take an individual’s education. If you are able to provide good education for your children, then you are helping to set them up for a brighter future than the others.
4. Financial Values
Many parents want to pass certain family values down to their children and the younger generations. If you are thinking about building generational wealth, then you should be able to pass down financial values as well.
Start training your children to save and manage their finances when they grow older. You may also want to teach them the value of hard work, the importance of being their own boss, or the advantages of being financially independent.
You can even help them to open their own bank accounts from a young age to teach them the importance of saving for their future. Remember to carefully choose the values that you want to impart to them because they will surely become part of your children’s inheritance.
5. Life Insurance
One of the most common and easiest ways to pass along wealth to your children and the younger generations in the family is life insurance. Life insurance provides the opportunity to protect your family in case you get into an accident or in the event of your untimely death. The value of your life insurance policy can become part of your children’s inheritance.
Life insurance allows you to set aside funds for your beneficiaries. If something happened to you, your beneficiaries would be able to get the payout. If you make the effort to invest in life insurance now, then it could prevent financial tragedy for your children.
People without children often think about what they can do with their assets. Philanthropy can help you use your wealth to help others, whether you are donating to a charity, or designating an organization to be your primary inheritor, making philanthropic contributions is an excellent way of ensuring your money goes towards a good cause.
Real estate investment is another way to build wealth for the long-term. Real estate is considered the most stable investment with the potential for steady cash flows in addition to increasing property values over time.
If you continue to buy properties one at a time throughout your life, then you might be surprised at how quickly your real estate portfolio can grow. You should definitely consider this as an option for building wealth for your kids.
Homeownership is one of the most common ways families can build generational wealth, but one should be able to understand that there are little steps before getting there.
You have to remember that generational wealth can accumulate quicker when you apply what you know about budgeting, spending and saving to all areas of your financial life.
The first step to buying a home is saving up for a down payment on your mortgage, and the first step to saving a down payment is saving a portion of your income regularly.
You can simply start small, make saving a part of your habit, establish an emergency fund and then start investing. Then, prepare for homeownership or consider entrepreneurship to build a legacy of your own.
Building wealth to pass down to younger generations in the family is not easy. After you have your own financial situation under control, securing your family’s future is the next step.
Take the time to explore and implement a wealth-building strategy that suits your family. Not all people want to invest in real estate or build a business, so you have to find something that works for your situation.
Whatever strategy you choose, make sure that you pass down your financial know-how and values to your children and the succeeding generations. Armed with the personal finance knowledge you can provide, your kids will already be one step ahead of the game as they make their way into the world.
If you are planning to invest in real estate that you could eventually pass on as inheritance to your children, you may want to consider the affordable house and lot and condominium properties of top property developer, BRIA Homes.
BRIA Homes is a subsidiary of GOLDEN MVHoldings, Inc., one of the largest real estate companies in the country. BRIA Homes is primed to bring quality and affordable house and lot packages and condominium units closer to ordinary Filipino families.
As one of the most trusted property developers in the country, BRIA Homes’ residential projects are now more than 50 in key cities and towns nationwide. BRIA’s property portfolio features horizontal developments like affordable house and lot units in self-contained communities, as well as vertical developments such as affordable mid-rise condominiums.
Included in Bria Homes’ vertical developments is their recently launched Astra Vertical Villages, dubbed as “the future of condominium living.” BRIA Homes’ Astra offers more than just functional living space for its residents, who will come home to a well-designed, thoughtfully laid-out 24-square-meter unit with bedroom, dining and kitchen area, living room, and toilet and bath. Astra homeowners will likewise find comfort and camaraderie in a tight-knit community with access to superior amenities that are not ordinarily offered by affordable condo developments.
The mid-rise residential condominiums offer amenities that are not commonly found in affordable living spaces, such as a swimming pool, a communal clubhouse, and complete gym facilities.
Astra also assures homeseekers the qualities they look for in a property, which include affordability, accessibility and independence.
From its vast array of horizontal projects, Bria is rolling out Bria CityVille, small pocket developments that are a perfect fit for aspiring homeowners who crave for serene suburban life outside, but not too far from, the din and chaos of metropolitan living. Situated in Cagayan de Oro, Bria CityVille CDO offers access to essential establishments like schools, churches, retail hubs, and hospitals.
They also have the Bria Executive Villages, exclusive residential enclaves located next to existing Bria communities in Baras, Rizal; Calamba, Laguna; General Trias, Cavite; and Calbayog, Samar. Bria Executive Villages are best suited for Filipino homeseekers looking to invest in more capacious living spaces than what is offered in other Bria horizontal villages.
BRIA Homes is a subsidiary of GOLDEN MV Holdings, Inc., .one of the largest real estate companies in the country. BRIA Homes is primed to bring quality and affordable house and lot packages and condominium units closer to ordinary Filipino families. This is the goal that drives every single employee in the company, for which the ultimate fulfillment is seeing a client happily moving into BRIA’s homes.
To know more, visit their website at www.bria.com.ph, like and follow “Bria Homes, Inc.” on Facebook, Twitter, Instagram, YouTube, Pinterest, Spotify, Viber Community, Telegram Channel, Kakao Talk, LINE, and WhatsApp, or call 0939-887-9637.