What is generational wealth?
The basic generational wealth definition is wealth passed from one generation to the next. Generational wealth can include: money, investments, life insurance, and real estate. It can also include things like a family business, a collection of valuable watches, or other tangible items. But, importantly, intangibles are also an essential part of intergenerational wealth, especially the lessons you teach the next generation about personal finance.
By equipping your children with the tools to manage their inheritance, they’ll learn how to grow wealth and how to keep wealth in the family for future generations.
Generational wealth isn’t limited to what happens after you pass away. You can also create a living legacy by paying for a home, a car, or your child’s college education. All of these reduce the next generation’s debt burden. Paying for education is particularly impactful since people with a college degree have significantly higher earning potential than those without one.