Hear me out.
Generational wealth-building is a goal for many families, but how can you start?
I want you to think about what your parents did. Did they advise you against investing in the stock market because they lost money? Do they recommend that you not start a business because the one they began did not profit? Did they say buying houses and renting them out was a terrible idea because they had a bad experience with a tenant?
Or were they the ones that pushed you to invest in the stock market because they built their wealth that way? Are they pushing you to get out of the rat race and either continue the business they built or to pursue your own? They run their own set of rental houses and believe that it is a great way to build wealth?
These are two scenarios of how fear affects generational wealth.
In the first, the parents tell their fears to their child and try to show the possibility of failure.
In the second scenario, the child learns the tools in how their parents built their wealth.
The child has two choices in both scenarios. They can learn from their parent’s failures and successes and apply it to their own life. Or they can rely solely on their own parent’s experiences and apply it as fact without trying on their own.
Learn to leverage this knowledge
The knowledge needed to build wealth are visible in families who have been able to keep their wealth for at least 3 generations. They pass on the tools to the next generation. They can either build upon this wealth or let it go. These tools are simple: talk about it, share your struggles, make a plan. I recently read an article about this and it goes into detail about these tools. The one that stood out to me is to have an open line of communication on the topic of finance can help build and keep wealth.
This article does mention how wealthy families lose their wealth. However, for families that have not built this level of wealth, there is one emotion that is stopping them: fear. The type of fear that negatively affects wealth-building is failure. The fear of failure. However, this kind of fear can stop anyone from reaching their dreams.
The one thing you can realize if you are a scenario 1 child is that the mistakes your parents made should be used as lessons. Just as the lessons on how to build wealth are passed down through the generations, as should the mistakes on how to not build weath.
How to build generational wealth
- Read financial books or listen to financial podcasts. Find out how people grew their wealth and see if you can apply those tools to your own life.
- Create multiple streams of income. If you have only one income stream then you are only one paycheck away from being broke. Creating multiple streams is like having a lifeline that can help you keep afloat. You can read my side-hustle post for some inspiration.
- Create a plan. In addition to this plan, you need to build a budget and how you will make this plan happen. Will you save $20.00 a week? Will you read one day a week? If you need a budget or a planner template, head on over to the shop and see if any will help you.