One of the incredible side effects of wealth is that it doesn’t just make your life better—it can also improve the lives of your children, and potentially even your grandchildren. This is due to the concept of generational wealth, which is the money that gets passed down from one generation to the next. It can take several forms, from money in savings accounts to family homesteads, and it can give future generations of your family an incredible advantage, provided they can manage the generational funds successfully.
You don’t have to already be rich in order to create generational wealth. Here are some steps that are important for building wealth in your family for generations.
you’re doing them a favor that will benefit them for literally the rest of their lives. You’re not only improving your child’s chances of getting a better job, you’re also saving them from having to pay back thousands of dollars in loans, along with all the interest that loan will generate. That’s money they can invest in property, put away for retirement or just deposit in a savings account for their emergency fund.
Granted, buying a home can be expensive, especially if you’ve never owned one before, and the process of getting a mortgage can be daunting. However, the benefits of owning your own home far outweigh the difficulty of buying it. There’s also a lot of resources available for people wanting to buy their first house, including First Alliance Credit Union’s own mortgage lending team.
Small businesses are another great way to build a financial legacy. Of course, businesses take a lot of work to start, as well as maintain, but when you succeed the result is a valuable financial asset your children can either sell or keep going. You can also use your business to teach your children about finances and get them accustomed to earning money.
Life insurance is arguably the single most altruistic thing you can do for your children. After all, there’s no way you’ll be able to take advantage of it. However, your children and spouse will be able to use it to pay for your funeral expenses, and it may even help them cope with the loss of income.
When you build generational wealth, you’re giving your children an almost invaluable gift. Even better, you don’t have to be a millionaire to do it. When you make investments like buying your own home and investing in your children’s college fund, you’re giving your children a financial advantage that will last a lifetime.
If you need help building generational wealth, become a member of First Alliance Credit Union. We offer several resources for you to begin building up generational wealth, from building up your savings to starting your own business. You can also apply for a mortgage to buy a home and even open a Coverdell ESA to help your children cover their college expenses.