Most of the western world is bankrupt. Wealth of generations is a term we all need to know and understand. For most families in the Western Hemisphere, this is unusual thinking, but if you explore the eastern parts of the globe, you will find examples of the richness of generations spanning centuries, not just cycles.
A simple definition of the wealth of generations is “the transfer of stable significant financial resources to future generations.”
Here are 3 tips for creating, building and protecting the wealth of your family’s generations.
Tip №1 – Gain wealth on something that holds or increases value
Physical assets such as land, art and gold outperform and outperform riskier paper assets such as stocks and bonds. Indeed, stocks can work well over a long period; stocks, bonds and even cash include some third party requirements. Every paper currency in the history of the world has ultimately proved useless, and there is little reason to believe that the current champions of paper money: the US dollar, the euro or the yen will be different.
By virtue, the value of land, art and gold is inherent. Absolutely some liquidity is needed for day-to-day expenses, but there are no issuers in these physical holdings that could suddenly make your land disappear or turn your gold into confetti.
Tip № 2 – To protect the wealth of generations, DO NOT share it
Different individuals equate different investment ideas. Generally speaking, when mom and dad die, their property is divided between the children. When family assets are divided, each child has the right to do with their share as they please, but, too often the financial discipline of mom and dad is not a hereditary trait, and destiny usually changes.
If the assets remain intact and managed as if they were a company, families will view their wealth differently and may not hesitate to invest $ 5 million. Because assets are passed down through generations, each generation does not view assets as “their own,” but considers themselves guardians of something greater.
Tip № 3 – Educate attitudes towards “wealth” in the next generation
Once you have reached your wealth (or during its creation), talk to your children about how you did it; why did you do it; and what you want to do with it once you pass it on. Also, think about postponing the transfer of wealth for up to 30 years. This allows children to succeed on their own rather than feel right.
Conversations about wealth with their heirs (children) should often be met at the dinner table. It will also give you the opportunity to “evaluate” whether they are suitable for the continuation of your condition.
In today’s economy, you need to learn to create, build and protect your wealth. If done right, you can also get a wealth of generations for your family.