Building Generational Wealth
Everyone has concerns about their children’s well being and if you find yourself worrying about your children, that is certainly not uncommon. Have you ever had thoughts of how your family will be provided for or taken care of if you are not there? Have you considered how your own parents provided for you? If so, then you have certainly thought about generational wealth.
What is Generational Wealth?
Generational wealth is an aspect of financial planning that is geared toward passing down stable, significant financial resources to future generations. Simply put, it means wealth for you, your children, your grandkids, their grandkids and so on all the way down the generations.
Generational Wealth has commonly been referred to as ‘Old Money’
Why do 70% of families lose their wealth in the 2nd generation?
Could it be because wealth is not something that someone can teach? If it were a matter of merely teaching one to become wealthy, then most businesspeople, financial planners, professors, and others would be very wealthy. Becoming wealthy requires a great deal more than knowledge alone. Many factors that attribute to wealth are hard to teach and not easily passed on. Creating and maintaining wealth requires hard work, discipline, sacrifice, and many other traits that are not easily taught.
Look at how wealth passes through generations.
It is estimated that 70% of wealthy families will lose their wealth by the second generation and 90% will lose it by the third. There are a variety of reasons why this happens:
Most parents find it difficult to discuss their wealth. Most parents find it difficult to have conversations with their families about what happens when they are gone. Leading to no open family communication about sustaining wealth and legacy building. The result can lead to issues like unnecessary taxes, costly estate fees, and possible family strife. It is important to clearly outline family intentions. Without transparency, you run the risk of eroding the value of your estate.
The families that do maintain their multi-generational wealth are able to do so by communicating with the next generations in a very straightforward manner. The rules they live by to do this are very simple but not always easy. These tips can be used to have a successful conversation about wealth with your children.
Along with investing wisely and developing a good estate plan, educating the next generations is a crucial element in making your wealth last.
Your hard work has Created Wealth, maintaining the values you believe in will help to sustain and Manage Your Wealth, and passing along your fortune to your family will be a part of Leaving Your Legacy!
Create Wealth ~ Manage Wealth ~ Leave Your Legacy
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