Let’s have a conversation about one of our ‘buzz words’ – GENERATIONAL WEALTH. We know that we mention this term quite a bit. Today, we’d like to delve deeper into what we mean, how we’ve achieved this, and how you can take steps to also move in that direction.
When we talk about generational wealth, we mean currency, physical assets, real estate, insurance contracts, and anything of value remaining within our assets that go far past our immediate children.
Well, how do you PRACTICALLY do that? In our case (and many others) you can set up an ‘infrastructure’ or a ‘trust’ to be managed and legally only dispersed at certain intervals, to be owned by different entities, to create channels that are not directly owned by your children but can be managed by them or yourself, etc.
There are many ways to make your wealth last and grow as it continues through generations. Talking to your legal team and accountant is a great place to get direction on what the best asset mapping will look like for YOU.
They know laws, rules, regulations, and all the nitty gritty details that will make your wealth work most effectively for you now and how to preserve it for future generations. A good wealth preservation strategy will also include ‘estate planning’.
Another way of doing this is to talk to your kids (or whoever is going to inherit what you have) about money, resource management, and asset classes of all kinds. You should also discuss how to create a personal financial statement and then how to manage that.
This is SO important! It’s so taboo to talk about money around your kids for some reason…. But how can we expect them to appropriately foster the wealth we have grown, if we never train them?
Let your children be included in the conversations (at the right age and maturity) so that they can start to understand the vocabulary, the intricacies, and the inner workings of real wealth.
Play A Game: CashFlow by Robert and Kim Kiyosaki
In a very tangible way, we started out many of these conversations with our children by playing the board game CashFlow by Robert and Kim Kiyosaki. It’s a board game (like monopoly), that teaches you to read a very basic personal financial statement and teaches the basics of a profit and loss statement and balance sheet. Passive income is how to ultimately get out of the “rat race.” The game then lets you make financial decisions with risk and reward in a fun and safe environment.
We also have our kids do book studies with us. Some of the topics we read about are money management, different wealth concepts, general real estate, taxes, etc. As they got older, we talked about finances while they were around us.
We wanted them to hear us use words like net-worth, liquidity, cost segregation, depreciation, arbitrage, etc. so that they could ask us questions! Who else is going to teach our children about money? Not the traditional school system.
One day, when we aren’t around and they hold the “keys to the kingdom” we want them to be good stewards. They need a real-world knowledge base about what these things mean. We don’t want someone else teaching them these concepts because we thought it was “none of their business to know about our finances.”
Well, actually, it is their business! When we are gone, it will ALL be THEIR business! In the same way children learn language, home maintenance, tasks, or other everyday concepts through their parents, we want to teach sound money management to ours— and that starts at home with real world learning.
If these are things you would like to learn more about, let’s schedule a call! You don’t have to be an expert to get started. Education is lifelong for both parents and kids. They may have insightful questions that you don’t know the answer to… but guess what?! That means you’ve been prompted to explore and learn about a new subject and can learn about it together.
We’d be happy to tell you more of our story, give any kind of education recommendations, and discuss how we can partner together to build wealth for generations to come.
You have a family here at REIP.
