If you do not come from a privileged background, you certainly understand just how important money is.
Maybe you are swamped with college debt and wish that your parents could have paid the tuition fees for you. Or perhaps you are looking to buy your first home, but you don’t have the money for the down payment.
If you don’t want your kids, and their kids after them, to go through the same struggles, you should start creating generational wealth.
That way, you can leave them financial assets that they can use to get ahead in life.
Here are a few practical ways you can start building generational wealth.
Invest in the stock market
The stock market could provide you with steady passive income, and you could benefit from your initial investment for decades.
As with any investment, you expose yourself to financial risk when you invest in the stock market.
However, you can lower this risk by selecting your investments wisely and exercising cautious optimism.
Consider investing in low-cost index funds. These are particularly low-risk and have virtually endless growth potential. Leaving your kids such an investment can set them up for financial success early in life.
Cryptocurrency is all the rage in the financial world right now.
This disruptive technology may hold potential for the discerning investor.
However, before choosing the type of cryptocurrency that you will invest in, take your time to understand precisely how digital currency works. Know what causes the value of ETH or Bitcoin to increase and the factors that drive it down.
It’s important to understand that cryptocurrency is highly speculative and highly risky. You should never invest money that you can’t afford to lose. For example, during the Bitcoin crash of 2018, its value fell as much as 80% from its peak.
For this reason, if you are a prudent investor, cryptocurrency should only form a small part of your portfolio, to offset any potential loss.
Informing yourself is the only way you can avoid making unnecessary mistakes that could curtail your financial future.
Real estate is a favourite for investors, and for a good reason too.
It may provide a yield for decades and may appreciate in value.
Investing in real estate gives your children home equity, and this alone opens many financial opportunities. And, should push come to shove, you know that your kids will always have a roof over their heads.
You don’t have to be exceedingly wealthy to invest in real estate.
Make it your life’s mission to buy real property, one piece at a time.
Over the years, you will have accumulated enough property to leave your children.
Start a business
Research shows that most family businesses often make it to the second generation. Therefore, one of the best things to leave your family is a successful business.
When you are building your business, be sure to include your kids from a young age.
If they show a keen interest in running the company, then you can comfortably leave it to them in the future.
If they couldn’t care less about it, consider selling it and investing in real estate or the stock market.
Building generational wealth can go a long way in helping your children live comfortably in the future. It gives you peace of mind, knowing that they will live comfortably and gives them a head start.
Of course, building wealth is not easy. But if you choose your investments wisely and make sound financial decisions, you will be better able to leave your kids and grandchildren significant wealth.
Start by following the suggestions on this post, and watch your wealth grow by leaps and bounds.