How to Build Wealth That Lasts For Generations

While the normal way to get wealth is through consistent hard work and investing, some people are just born rich.

The term “being born with a silver spoon” is often used as an insult to members of high society families, but what many people fail to realise is all the hard work the founding members had to go through to build generational wealth. They went through a lot of sacrifices to build wealth that passed to future generations.

It’s any parent’s dream to provide everything not only for their kids but to future generations as-well, so that they have every opportunity to live a better life than the previous generation.

But what’s the difference between generational wealth and personal wealth?

Generational wealth is a concept where a family passes assets to future generations and its built generation after generation and it is often referred to as “Old money” or “Family wealth”.

As an example, the founding member buys or builds two houses that will be passed on tho the descendants. The new generation now starts with two houses under their portfolio and use the free cashflow from renting those houses to get even more real estate. Then the third generation starts with even more houses and repeat the process.

So… let’s see how can you get started.

Create Multiple Sources of Income

Most people have only one source of income – their 9/5 job, and that the fastest way to get started. Having a stable income will (hopefully) allow you to pay for your expenses and put some money on the side for emergencies and invest.

But having only one source of income is won’t give you the safety or the income that you need to build generational wealth. Millions of people lost their job when Covid-19 hit and it will take some time for the economy to recover.

Enter the Side Hustle

Who wouldn’t like some extra money coming in, especially if it comes from doing something that you love?

If you have a passion for cooking, writing, or even traveling, you can monetise it online. Create your now personal brand and create a following around it. It will take a while to start generating some income, but it has the potential to surpass your full time job income. But if this is not something you’d like or you want something that gives you an income right away, you can drive for Uber or deliver food.

But remember, this extra money is not to buy you fancy clothes, we’re here to make money and invest it to make it grow overtime.

Create Passive Income

When you go to work you are earning an active income, meaning as soon as you stop working, you stop earning.

Instead of working hard for your money you should make the money work for you. 

When you plant a seed, you need to water it and after a few years you’ll have a tree and the cool thing is that you can do the same with your money.

Investing in the stock market has never been easier, there are some very good apps like eToro or Robinwood where you can start with as little as $50USD – and if you don’t know how to do it and what to buy, I’ll gonna share my insights on the stock market on a regular basis. 

Learn, Learn, Learn

Education is always the best investment that you can make for yourself. You can capitalise on that and you can be smarter on your investments, leading to the next point…

Spend Your Money Wisely

Never fall on the following money traps:

1 – Not having enough money for an emergency
2 – Not having money invested
3 – Buying things you don’t really need.

To avoid this, try paying yourself first – meaning, as soon as you get your pay check, pay your bills, save the money for a month worth of food and then put some more money away and invest a percentage of your income. After that you are free to use it as you please.

Always think long term. There are a lot of scammers online, so if it’s too good to be true, it probably is. One of the most famous quotes from Warren Buffet is:

Our favourite holding period is forever.

Start Your Journey NOW

If you haven’t done any investing yet you need to start doing it ASAP. 

Time is the best friend of compounding money, the sooner you start, the sooner you can achieve your goals.

Again, If you’re completely lost and don’t know where to start, save the blog on your favourites because I’m starting a new series where I’ll explain everything I’m doing with 100% transparency.

Now back to the Generational Wealth topic…

Starting a business

If you’re bringing more than enough cash to pay your bills, save some money and invest, maybe it’s time to start a business. Maybe you can replace your job with your side hustle, or maybe you have an idea for an app, you can hire freelance developers do do it for you and then you can build a business around it.

Starting a business is probably riskier but it can give so much more returns. 

Plus it’s is much more exciting (and terrifying).

Why is it so Difficult to Keep Wealth in the Family

Earning millions is tough, but spending is as easy as breathing.

Generational wealth is not so easy to achieve because there is something probably even more important than leaving a good inheritance – it is also important to pass on the values, the mindset and the financial knowledge.

The only way to (hopefully) keep the wealth in the family is to

Invest in your children’s Education

They need to be aligned with your values and aspirations for future generations, otherwise it will all have been for nothing.

Teach them about personal finance and to fight for good causes and to never try to be above the law because that’s a huge downfall.

That will be all for today, don’t forget to follow the blog and the social media if you haven’t already because new things are coming.

See you next time.

If you’re interested in joining the movement, I’m on eToro as pmendes88 where you can copy all my trades. I’ll be explaining all about my investment strategies here so make sure you follow the blog for weekly updates.

Photo by Vidal Balielo Jr. from Pexels

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