We all want to live a nice life, and a comfortable one when possible. But when you have children and potentially grandchildren, you also want to do what you can to make their lives more comfortable in years to come.
That’s where building generational wealth can change everything. Building generational wealth is good no matter how you look at it, but building a wealth portfolio that can be handed down to your successors is what turns families into dynasties.
Frequently, however, creating generational wealth seems like a complex hurdle and many people don’t know where to get started. Here are the top 6 ways that you can start building generational wealth for your family today.
- Clear Your Debt
The first step to building any wealth, whether personal or generational, is to clear your debt. All of it. This can be done in any number of ways, but one of the most popular techniques is the snowball method. It involves tackling your debts one by one.
If you’d like to try this method you can use a debt snowball calculator to figure out your plan of attack. Once you start, don’t stop until you’re done. Nothing threatens wealth like persistent debt.
- Plan Your Finances
Once your debt is gone, consider getting a financial planner. You can’t build generational wealth until you build personal wealth significant enough to pass on and a planner can help you reach your financial goals.
- Pay Your Taxes
Just as you will be meticulously planning your investments with the help of a professional, be sure you have a professional do your taxes so you can maximize your tax savings.
- Invest In Real Estate
One of the most time-tested methods of building generational wealth is to buy property. You can do this in multiple ways such as buying rental properties, buying a residential home, or buying raw land. There are benefits to each avenue.
Buying rental properties allows you to create cash flow immediately. Buying a home can mean having a substantial asset to pass on to your family. And raw land may be worth a significant amount of money to the right buyer.
- Boring Builds Bucks
One of the safest investments year over year is property and casualty insurance. Warren Buffett has personally stated in numerous holiday letters that it remains one of his favorite investment vehicles for dependable returns.
This is demonstrated in real-world value by comparing the returns of the top property and casualty companies with the most popular benchmark for performance, the S&P 500. Side by side, leading insurance firms outperform the popular index, and nearly double its return.
- Diversify. Everything.
Diversification applies to your standard stock investments, of course, but also your investment plan overall. Stocks, bonds, crypto — it all has its place in your portfolio. But how do you keep that hungry portfolio fed? Multiple diverse revenue streams.
Millennials and Zoomers may have to do this to make ends meet, but it applies to everyone. Get a side hustle, or two. Start a useful blog that can build you residual income. Get a part-time job. Be sure you are investing your income as well as your time toward your family’s future and you will be well on your way to building generational wealth.