If you want to ensure that your family is well taken care of when you’re no longer around, building generational wealth should be a top priority. When assets or funds can be passed from one generation to another, they have the opportunity to increase in value. This means you can create your own legacy and give your family the financial security they’ll need in the future. To find out how you can build generational wealth, take a look at these four top tips now:
1. Plan Your Retirement
When you retire, you will not, of course, be getting an income from working, which means you’ll be reliant on savings and investments, such as a 401(k). If you want to share generational wealth with your family, however, you’ll need to ensure that you have more funds than you need to finance your retirement. To do this, you’ll need to find the best investments for retirement and maximize the returns you can generate at this time in your life.
2. Build a Property Portfolio
Real estate can be a valuable investment for your money, particularly if property prices are set to rise in the future. Assets can be passed on to other people in the same way that cash can, so building a property portfolio can be a viable way to create and maintain generational wealth.
Of course, real estate gives you the opportunity to facilitate capital growth and generate an income, which could be used to fund your retirement. If you purchase a buy-to-let property, for example, you could make a capital gain when you sell it at a profit and interim income if you rent the property to tenants while you own it.
3. Minimize Your Tax Liability
Everyone has to pay tax on what they own, earn gift, and sell but there are effective ways to reduce your tax liability. By using trusts to transfer wealth or transferring assets at a particular time, for example, you can drastically reduce the amount of tax that needs to be paid.
You’ll need to seek professional advice in order to manage your tax liability, so don’t hesitate to talk to a reputable advisor. Whether you’re building a real estate empire, contributing to a savings account every month, or planning to pass on a family business to your children, reducing the amount of tax owed means your family will enjoy more of the wealth you’ve worked so hard to accrue.
4. Share Your Knowledge
If you want your wealth to protect your family’s future for more than one generation, it’s vital to share your knowledge with other family members. After all, generational wealth will only last if every generation has the same approach to financial management.
Protect Your Family’s Finances
Making the right decisions now can protect your family’s financial future for generations to come but knowing what the right investment options are isn’t always straightforward. With professional guidance and expert advice, however, you can get the help you need to create and retain generational wealth.