7 Ways to Create Generational Wealth
7 Ways to Create Generational Wealth. In this post, I’m going to show you 7 ways that you can create generational wealth for yourself and your family.
Most people only think about getting rich quick or winning the lottery, but the truth is there are so many other ways to build lasting wealth.
By the time 65 rolls around, only one in 100 People will be well off financially. 70% of wealthy families lose their wealth by the second generation, and more so around a 90% of families lose all wealth by the third generation.
So even if you make a fortune in the most abundant time in history, statistically, you, your kids or your grandkids will screw it all up. But by the end of this video, not only will you understand what it takes to build generational wealth, but also have a game plan for your kids buckle up, you might want to take some notes.
Number One.
Buy land. In order for you to understand generational wealth, there’s an important distinction we need to get right. personal wealth versus family wealth.
For example, $100,000 sitting in your bank account is personal wealth, you can go to your nearest coffee shop and buy a coffee with money from that account, it’s at your discretion so it can be depleted.
Family wells, on the other hand is illiquid most of the time. That means it’s hard to change back into money or requires extra steps.
Because of this illiquid function, you’re less likely to blow through it in the case of petty spending. Land is the ultimate store of value.
There is a fixed amount of land on this planet Earth and the fact that you can buy a piece of the Earth is mind-blowing to us. Considering the fact that the population is increasing and demand for space is always shooting up.
The demand for land will always increase by land and have your children hold on to it, it will only increase in value.
Number Two
By cash-flowing property
The Golden Gods of cash-flowing property are apartment rentals, commercial property or hotels. If you’ve played Monopoly before, you know how this goes you buy you hold you wait you cash in. As long as you don’t sell the property and there’s a demand for it.
It will forever put food on your table. Here’s the easiest recipe for generational wealth throughout your life by at least two rental properties outside of everything else you buy.
Now, these won’t give you the lifestyle of a king, but you’ll never go hungry for as long as you live. When your kids become adults teach them the golden rule as well so they would buy to rental properties to as long as you stay clear of any dramatic events like an uninsured rare illness.
In only two generations, the family will begin building a portfolio of passive income that will stick around for decades to come. People will always need homes, businesses will always need shops to sell their goods and people will always travel to nice hotels.
Number Three
build an evergreen business.
There are some businesses out there that can survive through time most businesses can’t do you might be killing it on Tik-Tok right now, but your grandkids won’t be eating from your glow-up videos. So you need to expand an evergreen business that has made money in the past and makes money now and will make money long after you’re gone.
Want to have your mind blown. Boeing is a last name. The company was named by William Boeing Haftar himself. Hilton is also a last name so is Ferrari, Lamborghini, Chevrolet, Porsche, Ford, all with the family last name.
Mercedes-Benz was named after Carl Benz Burberry in the name of the Father-Son in the house of Gucci Versace Louie Vuitton Balenciaga Fendi, Chanel all last names Bosch, Dell, Disney Dyson, Harley Davidson, Hewlett Packard Forbes, Guinness, Harrods, Hennessy, Jack Daniels, Kellogg, Lavazza, Mattel, McDonald’s, Ritz, Carlton Marriott, Rolls Royce, Charles rolls, and Henry Royce.
We could do this all day long. Almost every brand you touch in a store is someone’s legacy. Someone’s brainchild that became a business structured in such a way ate that it survived until now, the family became the brand the family became the business.
The only requirement is to take it seriously and keep innovating and developing in your space. What would your last name sound like as a brand? What business can you start that your children could carry on the lantern for you?
Number Four
by S&P 500.
So many of you have heard the stories if you invested X amount of money in Apple or Bitcoin in the early days, you would have trillions now. But the thing is, you’re just not smart enough to know what the next Apple or the next Bitcoin will be, no matter what the bots in the comments impersonating us will tell you, but there is still hope.
We’d like to introduce you to the ultimate passive investment vehicle, there’s actually a way for your money to grow no matter what if you look at long-term investment periods, it’s called the S&P 500.
The S&P 500 bundles the best-performing 500 companies in the US and allows you to invest in all of them at the same time. If one company does poorly, it’s taken out and replaced with another good one. Since its introduction, the S&P 500 has been the golden goose for those interested in building generational wealth.
Here’s what $100 would look like invested in the S&P 500. And yeah, sure, the time horizon seems big. But here’s what you’re not seeing. $100,000 invested in the S&P 500 in 2010, would be over $800,000.
Today 8x in 12 years. Historically, since its super slow inception, the S&P has returned an average of 6% per year, every year, Warren Buffett considered by many to be the greatest investor of all time, hasn’t beat the S&P 500 in over a decade. It’s honestly hilarious.
Now, if you want to invest in the S&P 500 for the long run, we personally recommend Vanguard or fidelity. Now we’re not sponsored by them. And we don’t have anything to gain from this recommendation.
We personally use Vanguard Now sure, you can use eToro, or other apps to gain exposure to the s&p 500. But who knows if these apps will be around five years from now, not to mention a few decades.
Number Five.
buy borrow die.
You wanted to know the secret to generational wealth? Well, this is it by Borovo die. The strategy is simple. And it might be the most valuable piece of information you’ll get in your entire life. So listen carefully.
Whether or not you’ll build generational wealth boils down to a list of only three things. One, what you buy, to what you do with it, and three, what happens to it when you die.
That’s it. Now there is a right and wrong way to do this. So here’s how to do it right. Step one, buy things that hold and appreciate in value over time, we’ve got this covered so far, you know what an asset is. Step two, and this one is the golden nugget that makes all the difference.
If you need money, you never sell an asset, you borrow against it. Let’s say you own a piece of land or an apartment and you need money for something. Instead of selling the property, you take a loan out against it. This is how the rich build wealth, they never sell anything. Why? Because you don’t have to pay taxes on borrowed money.
As long as you don’t blow through the money that you borrowed on dumb purchases. You can buy more assets that generate more income, pay off the debt to build up credit, and they’ll allow you to borrow even more money. It’s like a financial money hack. So you do this over and over again until you build an abundance of wealth.
But there is a last step to pay attention to step three death had some point you will die. Ideally you want to leave all this wealth to your kids and grandkids. But look, here’s the thing. The state doesn’t want you to do that very much like a mafia boss. It wants its cut. Hence it is a big one. It’s called inheritance tax. In the UK, it’s an eye watering 40%.
Although allowances do exempt up to the first 1 million pounds depending on circumstances in the United States, it’s between 17 and 40%, depending on where you live and how rich you are. So if you want to build generational wealth, you need to understand how to follow tax regulation by law, but minimize the impact it has on your long term strategy.
Number SIX
Let’s talk about how to lower your taxes.
But until we get there, number six, buy and hold Bitcoin. The goal of this video is to help you build generational wealth. Well, that’s where technology comes into play. Once every 20 years or so, almost like clockwork, a technological revolution happens, those who understand it, or at least have enough guts to put some of their bets on the new kid on the block usually reap disproportionate rewards.
Here’s how you should be thinking about it. We are not saying sell your house and go all in on Bitcoin and crypto. But if you’re doing okay, why not buy one Bitcoin for your kid? Worst case scenario, you lose a bit of money.
So what best case scenario and we think there’s more than a decent chance that this will happen, that one Bitcoin will make you or your kid a millionaire in less than a decade. Here’s why we think that will work more now than ever, with COVID.
And the war happening in Ukraine. With inflation at historic highs, with currencies being devalued and countries facing economic downturns, the world is going to require a fully separate store of value that’s easily portable, scarce and digitally native. As of the end of 2021. There are approximately 56 point 1 million millionaires in the world. These are people who got to $1 million in wealth.
Well, there’s only going to be 21 million Bitcoin. If every millionaire wanted to buy one Bitcoin, which by the way, is trading at under $40,000. Right now they wouldn’t be able to. If they split all of it evenly between them each would only get 0.375. From our perspective, it’s an asymmetric risk worth taking.
If you’re smart, you can move earnings from one end into other avenues that earn you money in a perpetual wealth growing circle. The goal is to never stop compounding both wealth and knowledge. Unfortunately, most people don’t know where to get the kind of information that’s actionable for their situation.
Number Seven
Mentor your kids
to take over the business or build bigger than you did. We started off by telling you that only 30% of family businesses are passed down to a second generation. It sucks, but it’s the truth. It’s also why most new millionaires are first generation millionaires.
These are people who want it so bad, they will alter their fate and build wealth despite their humble beginnings. Here’s the brutal truth. If your kids don’t start off better than you did, you failed somewhere as a parent, whether intentionally or unintentionally.
Every parent should want their kids to get a better shot at life than they did. But very few invest in equipping their kids with the real tools for success. putting food on their table and a roof over their head is the bare minimum.
Trusts are legal entities meant to lock wells and distribute it to the rightful owner under certain circumstances. Now there is a variety of ways you can structure this, but it ensures that children don’t blow through all of your hard work. These trusts can be taxed at substantially lower rates.
They can be passed on after your death or portions of it can become available if conditions are met. But let’s say if your child graduates university or earns their first million or has their first child, you can get creative with those conditions.
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