Multifamily Syndication 101
September 9, 2024
From Corporate Hustle to Family Bliss
September 23, 2024Building Generational Wealth
Essential Family Finance Strategies
Did you know that 6 in 10 millennials won’t get an inheritance from their parents? This statistic alone is enough to understand the importance of building generational wealth. It leads to a very secure financial future for your descendants and creates investment opportunities for your heirs.
If you want to give your loved ones a solid foundation, a headstart in the rat race of life, then it is vital to leave some wealth behind. This article will explore some key strategies to help you cultivate a legacy supporting your beneficiaries’ education and overall well-being. Implement the right finance strategies to make sure your heirs have ample funds to cover emergencies.
How to Build Wealth that Lasts: 7 Key Strategies
More than 50% of the total wealth in the US was owned by baby boomers in 2023. Considering this statistic, just imagine how much wealth is passed down from generation to generation. A study says that an average American inherits $58,000 from their elders. How much do you plan to leave behind for your inheritors?
Let’s explore a few key strategies to build generational wealth:
1. Do Careful Estate Planning
Less than 50% of people have a Will explaining how their assets should be distributed in case of their passing. Keep in mind that the foundation of wealth building is good estate planning. It will ensure secure transfer of your assets (after probate) to your legal heirs. If you establish a Trust as well, it won’t pass the probate process. That’s how you can avoid legal disputes after your death. Keep your wealth safe by allocating a portion of your wealth to Trust funds.
A Trust fund will help you set certain conditions for your heirs. For instance, you may specify that your daughter will receive the amount enclosed in her Trust fund only after graduating from college or turning 21.
2. Make Kids Fiscally Responsible
Just 57% of people happen to be financially literate. So, make sure that your family knows the value of spending money responsibly; don’t let money become a taboo topic in your family. It’s vital to talk to your kids about how to save money and avoid spending frivolously.
Remember, building financial wealth is also about passing down these lessons to your kids. You can simply offer your children a weekly allowance so they can learn money management. Teach them how to earn money first with their time, then build on those lessons by explaining how they can invest their earnings.
3. Start a Business
There are few things that are better for your family’s long-term financial stability than starting a business. It’s a tried-and-trusted method of creating lasting wealth. A gleaming example would be the Rothschild family. You can establish a small business and, by the time you grow older, your children could have a thriving enterprise to run.
It may even become a lasting family legacy, providing employment opportunities to future generations and extended family members. It’ll allow your family to contribute to the betterment of the community as well. Moreover, it’s a great way to keep the money in the family.
4. Be Responsible with Debt
An average person has $90k to $100k in consumer debt right now. The best thing would be to explain to your kids how to handle debt responsibly for better wealth management. Explain to them how credit cards and personal loans can accumulate more debt than a person can handle. Also, tell them that paying off high-interest debt can help them get debt-free sooner.
Moreover, try to teach your heirs about different lines of credit and how to pay off student debt in time. The best lessons you can give your kids will be about how to do their taxes and find ways to reduce their tax burden. Once they’re debt-free, they can start investing in their future.
5. Diversify Your Investment Portfolio
Another important factor is never to rely on a single source of income. That would make it very difficult to build generational wealth. Instead, develop different streams of income by earning a sizeable amount as rental income or doing freelance work.
Diversification of a stock and bond portfolio may be better at reducing risk and promoting long-term and predictable growth.
6. Lower the Tax Burden
Keep in mind that pre-tax retirement accounts are the least tax-efficient assets you can pass down to your heirs. Instead, you should spend down a pre-tax retirement account as long as you live. Instead, consider your non-retirement investments.
When you die, your heirs have to withdraw money from pre-tax retirement accounts within a decade; that’s why these accounts are not very tax-friendly.
7. Invest in Real Estate
Lastly, you should invest in real estate to create a steady income source and watch it increase its value over time. Buying land and properties will never cease to be the staple of A1 American investment! Long-term holding can be a great way to make use of your real estate investments. Or, you may buy an apartment and rent it out to credible tenants. Income from these tenants will serve as a stable income source for your descendants.
What Lies Ahead?
As inflation hits the nation and 9-to-5 jobs fail to help young generations secure a healthy living, building generational wealth is the right choice to protect your descendants’ financial interests. It involves prioritizing savings, investing wisely, etc. to achieve lasting financial stability not just for yourself but for the whole family and even the generations to come.
That’s how you can lay the groundwork for future family members to not only survive but thrive in this economy. The philosophy behind these tips is that you should pass down wealth as well as finance planning lessons to enrich the lives of your heirs.
Who is Gold MF?
Gold Multifamily is a Leading Real Estate Syndication & Investment firm that invests in premium and value-added multifamily properties. We offer expert syndication and lucrative real estate investment opportunities.
Come explore our comprehensive services in real estate syndication and property management, designed to maximize your investment returns.
Schedule A Meeting With Us
Schedule a call with Gold MF to explore how we can help you achieve your passive income goals through investing in cash-flowing multifamily real estate.
