Generational wealth is exactly what it sounds like. It’s why the Rockefellers, Vanderbilts, and Carnegies are still some of the wealthiest families in the world today after building their fortunes in the 1800s and 1900s. In short, these dynasties and others bequeathed property and businesses to family members, building generational wealth that has had long-lasting benefits.
There are many asset classes that can be passed down, but in my opinion, real estate is the foundation of generational wealth, and not only for the Rockefellers. For many of us, a home or property is the single biggest asset that will move from one generation to the next. This is why I’m so passionate about home ownership, as well as taking proper care of your home.
Keeping it in the Family
I don’t have kids, but I understand that parents go to work every day and come home exhausted for the sake of their families. Parents are making sacrifices, trying to build a better life than maybe they had when growing up.
This idea of building this better life for your family, for your kids, can’t just stop with love and care. There has to be some financial intelligence around setting your children up for the future. Generational wealth is very simply the wealth to be passed on to the next generation. This doesn’t mean it has to be a gift—you can give your children incentives.
Real Estate as an Asset
There are many different assets that people use to build wealth. These include savings accounts, money markets, certificates of deposits or CDs, stocks, bonds, and retirement accounts, as well as businesses, vehicles, art, and more. To me, real estate is the best of these for building generational wealth.
When you do your research and buy property responsibly, whether a residential house, townhouse, condominium, commercial building, or land, you are making an investment in the future. When maintained properly—and upgraded as needed—real estate historically appreciates better than most other assets. That’s why it becomes a driver of generational wealth.
There can be tax implications to gifting real estate, and rules for transferring property vary from state to state, so you’ll need to consult a local attorney to guide you through the process whenever a deed will be changed. But by and large, real estate can set up members of your family very well financially for a long time to come.
One of my main goals is to help people understand how to build wealth and value, no matter how big or small the asset is. When purchased intelligently and maintained properly, real estate usually falls on the “big” side of that equation.
