Have you ever wondered how the rich get richer? While there is no one-size-fits-all answer, generational wealth is frequently a key component of prosperity for the affluent.
All wealth starts somewhere… typically with someone who had little and gradually built a big enough nest egg to pass on to their heirs. This is usually how generational wealth is established.
Sam Walton is a prime example of someone who started with nothing and built a massive empire. He was a true rags-to-riches story. He worked hard, saved his money, and invested wisely.
As a result, he built a business (Walmart) that generated enough wealth for multiple generations. Today, his family is the wealthiest in the world.
While Walton’s story is truly remarkable, it should be viewed as an inspiration (rather than an expectation) for anyone looking to build a legacy that can live way past their expiration date.
In this post, we’ll define what generational wealth is and provide actionable steps that you can take to start building it.
Let’s dive in.
Generational wealth is the transfer of money, property, or other assets from one generation to the next. The concept can be applied to both individuals and families, as well as businesses and organizations.
The benefits of building generational wealth can be numerous, but perhaps the most important is that it is designed to allow families to maintain their standard of living and financial security from one generation to the next.
Inheriting money or property from previous generations can generally help families to better weather tough economic times, pay for education, start businesses, and much more.
What’s more, generational wealth can also help create a safety net that can be used in case of unexpected expenses or financial emergencies.
Lastly, building generational wealth can be a way to give back to the community, as families that have accumulated wealth can often use it to help less fortunate others.
As you get older and continue to grow your wealth, there are a few things to keep in mind that can help you maintain your financial security.
One of the most important is to make sure that you have a diversified portfolio that includes a mix of different types of assets. This will help protect you from economic downturns and market fluctuations.
Another thing to keep in mind is to create a financial plan that includes short-term and long-term goals. This can help you stay on track as you work to build your wealth over time.
Finally, it’s important to remember that building generational wealth takes time. There’s no need to rush the process—focus on making smart financial decisions and saving regularly, and you should be well on your way to creating a lasting source of wealth for your family.
Whether you’re lucky enough to have received an inheritance or starting from scratch, certain strategies can improve your chances of success—no matter what situation you are in.
Building generational wealth isn’t just for the rich; everyone starts somewhere (key word: start). An important thing you should consider doing first is to trim your debt and live reasonably. After that, you can begin to focus on growing your nest egg.
A CFP® Professional at Facet Wealth can help you put together a plan that’s designed to get you on track to building generational wealth.
Schedule a free introductory call today to get started.
Facet Wealth, Inc. is an SEC registered investment adviser headquartered in Baltimore, Maryland. This is not an offer to sell securities or the solicitation of an offer to purchase securities. This is not investment, financial, legal or tax advice. Past performance is not a guarantee of future performance.
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Facet Wealth, Inc. (“Facet”) is an SEC registered investment adviser headquartered in Baltimore, Maryland. This is not an offer to sell securities or the solicitation of an offer to purchase securities. This is not investment, financial, legal, or tax advice. Past performance is not a guarantee of future performance.
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