Most of the western
world is bankrupt in their thinking. Generational Wealth is a term we should
all know and understand. For most families on the western hemisphere this is an
uncommon mindset but, if you examine the eastern parts of the globe you will find
examples of generational wealth spanning century's and not just cycles.
A simple definition
of generational wealth is 'the passing down of stable, significant financial
resources to future generations'.
Here are 3 Tips To
Create, Build, And Protect Your Family's Generational Wealth.
Tip #1 - Build
Wealth In Something That Holds Or Increases In Value
Physical assets
like land, art, and gold, outlast and outperform riskier paper assets like
stocks and bonds. Indeed, stocks can perform well for long periods however;
stocks, bonds, and even cash all involve some claim on a third party. Every
paper currency in the history of the world has eventually proved worthless and
there is little reason to believe the reigning paper money champions of today:
the US dollar, euro, or yen will prove different.
By virtue, the
value of land, art, and gold, are intrinsic. Absolutely some liquidity is
needed for day-to-day expenses but, in these physical holdings there are no
issuers who can suddenly make your land disappear or turn your gold into
confetti.
Tip #2 - To Protect
Generational Wealth, DON'T Divide It
Different
personalities equal different investing ideas. Generally speaking, when mom and
dad die, their assets are divided among the children. When family assets are split
up each child has the power to do with their share as they please but, all too
often the financial discipline of mom and dad is not an inherited trait and
fortunes typically change.
When the assets
remain intact and are managed as if they were a company, families will view
their wealth differently and might not hesitate making a $5 million investment.
As assets pass down the generations, each generation does not view the assets
as "theirs" but rather views themselves as guardians of something
greater.
Tip # 3 - Foster
Attitudes Of "Wealth" In The Next Generation
Once you've
attained your wealth (or while creating it) talk to your children on how you
made it; why you made it; and what you want done with it once you pass it on.
Also, consider delaying the transfer of wealth until after age 30. This allows
for kids to earn their own success rather than having feelings of entitlement.
Conversations of
wealth with your heirs (children) should be a regular occurrence around the
dinner table. This will also afford you the opportunity to "evaluate"
whether or not they are suitable to carry on your fortune.
In today's economy
it's imperative to educate yourself on ways to create, build and protect your
wealth. If done properly you too can have generational wealth for your family.
If this information
has been helpful and you've found value please like it, post it and share it
with others.
As an independent
insurance advisor and income protection specialist for almost a decade, Ryan
has been providing clients with customized personal insurance and financial
solutions through disability, life, critical illness, long-term care, and other
personal insurance products while providing strategies for hedging income and
preserving wealth.
Article
Source: http://EzineArticles.com/expert/Ryan_D._Forrester/2093018
