Episode 113 

5 Ways You Can Build Generational Wealth 

A solid financial foundation is key to building generational wealth. Tune in to listen to easy to implement ways that you can start on your money journey and build a better financial future for yourself and generations to come.  

1. Life Insurance
One thing everyone should always be considering is whether they need life insurance. I always say if someone else depends on your income then your answer should be yes. Life insurance doesn’t have to be expensive. There are plenty of basic policies that can offer a solid foundation. If taking out a life insurance policy makes you feel strange (as if you’re jinxing your own death), you’re not alone. Don’t worry though! If you have car insurance does that mean you’re jinxing yourself into a car accident? Of course not. Life insurance isn’t required but remember it may have a significant impact on someone who depends on you if you were to pass.  

2. Education
Getting an education helps foster a stable career. However, having to pay for that education gets tricky. Many depend on loans, and having to pay them back can take years, which takes away a chunk of money that can be put away into a wealth building strategy. My message to parents is to start saving for their kids’ college as soon as possible. This will help them start their career debt-free, giving them a head start to build wealth. 529 Plans are a popular tool parents use for educational expenses, and it comes with benefits! Another tip I have for parents is start teaching your kids about money at an early age. Parents often add their children to their credit cards as authorized users to help them get an early start at building their own credit history. However, them having credit doesn’t mean they understand it. So, teach your kids financial literacy! It’ll help them learn about credit and how to manage all kinds of financial situations they will run into in the future. 

3. Investing
It terrifies many to put money in the stock market. What should be even more terrifying is losing money because of one’s choice not to invest. Having a savings account and earning a bank’s interest doesn’t allow your money to have the same growth potential as it does when investing.  Add inflation to the mix and you’ll be surprised how quickly the value of money goes away. Remember, the best time to invest was yesterday and the second-best time is now!  

4. Save for Retirement
We’ve all heard of home and auto loans. Have you ever heard of a retirement loan? The answer should be no. They don’t exist and that is exactly why it’s crucial for everyone to save for retirement. Unfortunately, we won’t find someone to lend us money to fund our retirement, so the burden is on us. If an employer offers a 401k match, take advantage of the situation, and don’t leave any free money on the table.  

5. Estate Planning
Estate planning is not just a topic for the rich. We all have estates worth protecting. This can include bank funds, homes, cars, stocks, and even digital assets like social media. I highly encourage my clients to have an assigned health care proxy and power of attorney. In case of incapacitation, they will have already allowed a trusted individual to handle their medical and financial affairs. Setting up a trust is also part of estate planning. This will determine who or what your assets will go to in case of your death.  

Key Takeaways
These are 5 easy to implement ways to help you think about and get started with building generational wealth. However, everyone’s situation is different. Remember, with expert coaching, a CFP ® professional can help you manage the tips mentioned to better benefit you and your needs. 

Notes:

In this episode, Luis talks about the following and more: 

  • The importance of generational wealth 
  • How to help your kids build credit 
  • The gift you can give your kids at an early age to give them a head start 
  • Why estate planning is not only for the rich 

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