BENEFITS OF GENERATIONAL WEALTH (Everything you need to know)

Ever seen adverts for businesses that dates to the 70s and 80s and wonder how they have managed to survive all the economic downtimes?

Have you always wondered about what it takes to create wealth that will outlive you and be transferred to your future generation?

This article promises to provide an expository on these questions. Come along as we walk you through investment decisions that have shaped many legacy businesses today.

MONEY; THE INVESTMENT CONVEYOR

Many years ago, the purchasing power of man was centered around things that could be commensurate with the value of goods purchased. There were the shillings, coins, cowries, and even slaves, all used for the exchange of commodities and daily transactions.

This medium of exchange opened channels of monetary dealings that gave the man an insight into the gains that the continuous possession of money could present. From the pursuit of power to earthly acquisitions, the need to lay hold and preserve fortunes has become man’s biggest ambition.

Firstly, before exploring the many sides of generational wealth, we will take a holistic look at the definition of wealth and rich as these seem to be the precursor of generational wealth.

A CONTEXTUAL VIEW OF THE TERM WEALTH AND RICH

These two words have always been used interchangeably and most of the time is used as a synonym when they are not. The word wealth is an abundance of physical possessions or valuable assets such as investments in bonds, stocks, and real estate amongst others while being rich is the momentary display of affluence or possession which is for a fleeting moment. Wealth transcends immediate needs because wealthy people make a lot of investment decisions and take adequate steps to match their words with actions.

In other words, being rich does not guarantee a future estate because individuals within these statistics do not ensure the money or possession is invested for future yields, unlike the wealthy folks.

Now that we have been able to establish a disparity between being wealthy and rich, it is now time to shed light on generational wealth.

GENERATIONAL WEALTH; A TREASURE BOX FOR THE FUTURE

 Annually, Forbes magazine publishes a list of the top wealthiest people or the world’s richest with the selection based on certain criteria such as net worth which is a summation of the value of all non-financial and financial assets owned by such individuals or institutions excluding outstanding liabilities. The compilation of this list places these individuals amongst the world’s wealthiest with most of them owning organizations of repute with strong financial backgrounds. The sustenance of this wealth becomes pertinent to business owners and so, transferring this wealth to capable hands is of utmost priority as ensures the continuity of the investments.

Defining generational wealth from this context is simply any kind of possessions, either physical possessions or investment funds. This can be in the form of properties, real estate investments, stocks and bonds, books, precious jewels, or even an entire company.

The benefits of generational wealth can only be actualized if the wealth created extends to future offspring or dependents in a family. creating a wealth that transcends a generation is not an easy feat but one which requires some steps. Here is an insight into steps that can be taken to create generational wealth.

CREATING GENERATIONAL WEALTH; A STACK OF INVESTMENT DECISIONS

BE DEBT FREE

Somebody shrouded in debt would not be financially disposed to make investment decisions. Debt is like a huge rock tied to a neck; it is the easiest route to drowning.

Anybody seeking to transfer wealth must first have a sense of financial independence and freedom that enables them to become self-sufficient and less dependent on loan facilities.

CREATE AN EMERGENCY FUND

Having a priority list check will go a long way in curtailing excessive spending. This can be done by satisfying needs more than wants as this enables frugality. Creating an emergency fund for exigencies will forestall indebtedness as it provides backup for eventualities.

This source becomes an exit from the net of debt and loan sharks. Furthermore, the creation of an emergency fund provides a conducive atmosphere for a focused investment lifestyle.

DRAW UP A BUDGET & PLANNING SCHEDULE

planning has always been a strategic approach to a lot of situations. It promotes structure and stability and prevents failure at some point.

Financial prudence can never be achieved without planning and to further reiterate the need for generational wealth, it is a step that must be taken to fast track the achievement of wealth transfer from one generation to another.

Have a written plan which will embrace your earnings and spending. Allot a certain portion to investment purposes and please do not stop at iterating these plans on paper, take the relevant steps to bring it into actualization.

HAVE AN AUTOMATED SAVINGS

Automated savings is often done through a saving account with a bank. This is automation that is hinged on a customer’s request for a certain amount to be deducted for saving purposes for a fixed period.

This enables the creation of enough funds for future investments because most of these investments require huge capital for their kick-off. Whether it is an investment in real estate or the acquisition of stocks and bonds, taking steps to accrue funds for this purpose will be making the investment decision an easy one.

INVEST IN LEGACY PROJECTS

Legacy projects are investments that outlive the owner, transcending the imprints of the founder and extending to offspring, dependents, or new owners within the family tree. These projects are not built to cater to immediate needs alone but are also structured to fulfill other future purposes.

For an investor who is committed to investing in legacy projects, these investments become a bulwark against financial insecurity for the next generation. This ensures there is an immediate estate and a thriving business to leverage during a period of financial downturn.

Legacy projects are well planned, towering above the physical structure or investment options to establish a stance that provides a financial stronghold for the investor and generation to come. Take, for instance, companies such as Coca-Cola, Johnson & Johnson, AT & T, Hewlett-Packard, and several others have been there over the years with several generations benefiting from its yields.

  investing in real estate or the acquisition of properties appreciates over time if effectively managed. Owners of goldmines or lands where precious metals are mined live off these resources for many years with some of these values trickling down to the next generation.

After an extensive overview, it will be nice to consider the benefits of generational wealth.

BENEFITS OF GENERATIONAL WEALTH

Generational wealth provides the following.

  • A guaranteed estate for future generation
  • Creates financial stability and security
  • Enhances financial prudency
  • Builds a family’s pedigree
  • Enhances business finesse and confidence
  • Promotes peace of mind