Generational Wealth - What Does It Mean?

Generational wealth – What Does It Mean?

In the past few years, generational wealth has become a hot topic. With so much uncertainty in the world, finding ways to build one has become of even more interest.

Still, it is often a conversation that many are shy to start. The change has to begin within the home, but often, we are too busy to think about planning the future or don't feel comfortable discussing financial matters with those closest to us. In this article, we take a look at generational wealth and why it matters.

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What is generational wealth?

Simply put, generational wealth encompasses the financial assets passed down to younger generations. This can involve many elements that contain monetary value – real estate, cash, stocks, and sometimes even businesses.

While generational wealth can be passed down in many different ways, in its simplest form, parents transfer their funds to their children. The recipients, in turn, have an advantage among their peers. They can use the wealth to acquire elite education or create a business on their own.

Most often, generational wealth is used for purchasing a property, for getting an education, therefore improving the potential of their future earnings or reaching any other goals they might have. Thanks to their parents' (or other family members') assistance, younger generations can avoid student loans or different types of debt.

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Why does generational wealth matter?

Generational wealth has many benefits. First, it gives the parents the financial ability to support their children's future. When recipients have the opportunity to get an education or create a business they dream of without any constraints, there is a much higher chance of having a higher income. Moreover, it is easier for them to build their own fortune.

Furthermore, generational inheritance also has a major effect on the overall mindset of younger generations. Those on the receiving end can rely on their family's funds. That means they are willing to make riskier moves, leading to lucrative investments.

Individuals who have a low-income background tend to be more cautious. In some cases, that may not be an issue. But often, it means they don't have the ability to take risks. As we already know, some of the biggest success stories in business involve putting yourself on the line.

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How can you build generational wealth?

So the golden question is – how can one build generational wealth? The answer is – careful planning. Of course, starting from zero is much more difficult than inheriting assets. Still, with clear objections and road maps for investments and savings, you can accumulate money to pass down to your family even if you come from a low-income background.

At EPC, our goal is to help our clients maximize their potential. We put in the work and effort to ensure your investment brings as many benefits as possible. Investing in real estate is currently one of the best opportunities for building generational wealth. We make use of the current market conditions to assist our clients in reaching their financial goals. If you are curious to learn more about the process, contact our team.

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