How to Build Generational Wealth
Many parents save what they can in the hope that they can pass along some money—perhaps in the form of college tuition or a first home down-payment—to help their children or grandchildren start their adult lives with less debt. But if you’d like to leave behind greater financial security, or even a legacy, then it’s worth learning how to build generational wealth.
What is Generational Wealth
Generational wealth, or family or legacy wealth, is anything with monetary value (financial assets) passed down from one generation to the next.
Why is Generational Wealth Important?
At a time when even people making six figures may be living paycheck to paycheck, creating financial security, let alone generational wealth, can provide a significant financial advantage to the younger generation when they’re starting out in the real world.
Define Your Generational Wealth Goal
You may be wondering how much money is considered to be generational wealth. The fact is wealth is relative. In other words, financial security and legacy can look different for everyone. The first step is to define your goal. Any amount is generational wealth when transitioned to at least one generation.
Integrate Your Goal into Your Long-Term Financial Plan
The next step is to think about how to get there. As you would when you budget for an expenditure, you need to think about how much to save and how to attain it. Take the same approach to building generational wealth. Integrate your legacy goal into your financial plan.
Find Ways to Build Generational Wealth
Fortunately, there are ways to build wealth that can grow for generations to come. Consider building generational wealth in the following ways:
1. Save Money You Don’t Intend to Use in Retirement
“A penny saved is a penny earned,” – Benjamin Franklin. By designating money you don’t intend to use in retirement as a legacy for your children, the money is set aside for its intended purpose: to provide wealth for the next generation.
Remember, however, that in a low interest rate or inflationary environment, it may become more difficult to attain your generational wealth goal year after year. Interest payments on savings and fixed income investments such as GICs are often insufficient to keep pace with the rate of inflation. Acquiring asset classes that appreciate and/or produce wealth through income such as dividends may be a better (smarter) way to build generational wealth.
2. Invest in Real Estate
Investing in real estate is investing in one type of asset class that can both appreciate and produce wealth (rental income). This could take the form of owning one real estate investment property or a portfolio of multiple real estate investment properties.
3. Invest in Stocks
Stocks are another asset class you can invest in which can appreciate and protect your long-term wealth from inflation. More specifically, investing in dividend-paying stocks is a proven strategy to preserve and build long-term wealth.
Not all stocks produce wealth in the form of income (dividend income). Dividend-paying stocks do. Dividend-paying stocks have two components to their total return: 1) the regular dividend payment; and 2) the price appreciation of the underlying stock.
Build Generational Wealth by Making Money Work for You
With proper planning and wealth management, wealth can be passed down for generations to come. If building generational wealth is your goal, Bloom Investment Counsel, Inc. has the experience and can help by making your money work for you.
Bloom Investment Counsel, Inc. has been building and managing wealth for wealthy individuals, family offices, foundations, corporations, institutions and trusts since 1985. We are a Toronto-based independent boutique investment management firm with over 37 years of experience managing in excess of $2.5B in assets over the years.
We specialize in providing and actively managing customized Canadian and U.S. dividend-paying portfolios. Each of our high-net-worth clients receive a dedicated and diversified personal investment portfolio of income-generating investments, specifically dividend-paying stocks, that provides capital for the present day, if desired, while continuing to preserve and build wealth for the future.
Visit our website at www.bloominvestmentcounsel.com or contact us by calling +1-416-861-9941 or emailing firstname.lastname@example.org to learn more on how we can help you build generational wealth.
Established in 1985, Bloom Investment Counsel, Inc. is a Toronto-based independent, privately-owned boutique investment management firm with experience in managing in excess of $2.5B in assets over the years.
We provide actively managed, customized Canadian and U.S. dividend-paying portfolios for wealthy individuals, family offices, foundations, corporations, institutions and trusts.
For more than 25 years, we have specialized in one thing and strive to be the best at it—investing in income-generating investments, specifically dividend-paying stocks, which can help you generate income, if needed, and growth from investing in the stock market.
Are you looking for a personal investment management service that can help you generate income, if needed, and growth? Let’s Talk. Call us at +1-416-861-9941 or email us at email@example.com
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This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.