How to Build Generational Wealth — Even if You’re Not Rich
Generational wealth. It sounds so fancy and out of reach, doesn’t it? Like a topic of conversation for the Vanderbilts to chat about over their afternoon tea, not a smart financial strategy for everyday people.
But at its core, generational wealth is something we all can aspire to. It’s about building a more prosperous future and having something to pass on to your children. Whether that’s cash, stocks or property, it doesn’t need to be in a trust fund to make life better for future generations.
Once you realize “generational wealth” isn’t just for descendants of railroad tycoons, you can see it’s something that is totally attainable — and incredibly important — for the rest of us common folk.
Here are a few ways to start a generational-wealth plan for your family.
1. Leave Your Family up to $1M
While life insurance is, in fact, insurance on your life, it is also an important step toward improving your children’s future if something were to happen to you.
With a term life policy, you could leave them $1 million to help them build their lives if you were to die early. And you don’t need to be a millionaire to pass on a million dollars.
We suggest finding a policy through a company like Bestow. Maybe you’ve considered this before, but thought it was only for rich or older people. But we’re hearing that people are getting it for as little as $16 a month.
You can take advantage of Bestow until you’re 54 years old, but the sooner you take care of this, the cheaper it could be.
You don’t even need to leave your house to get a free quote from Bestow — it takes minutes to do this online. Instead of leaving your family with what’s in your checking account and a bucket of worries, they’ll be able to afford the life you’ve always wanted for them.
2. Spend $1 to Own a Piece of Amazon, Google or Other Companies
All this talk of hedge funds in the news might make you think that owning companies or investing in them is only for people who are rich and financially savvy — that they’re the only ones who can invest millions, make millions more, then pass those millions down to their kids.
And sure, that’s one way millionaires create generational wealth. But you can create it that way, too. All you need to do is start small and build up your nest egg.
A lot of people use the app Stash to start investing. It lets you be a part of something that’s normally exclusive to the richest of the rich — buying pieces of other companies for as little as $1.*
That’s right — you can invest in pieces of well-known companies, such as Amazon, Google or Apple, for as little as $1. The best part? When these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.
It takes two minutes to sign up, plus Stash will give you a $5 sign-up bonus once you deposit $5 into your account.**
3. Invest in Real Estate (Even if You’re Not a Millionaire)
Take a look at some of the world’s wealthiest people. What do they have in common? Many invest in large private real estate deals. And here’s the thing: There’s no reason you can’t, too — for as little as $10.
A company called Fundrise lets you get started in the world of real estate by giving you access to a low-cost, diversified portfolio of private real estate. The best part? You don’t have to be the landlord. Fundrise does all the heavy lifting.
Fundrise’s Starter Portfolio has a minimum of only $10 and is geared toward first-time real estate investors. Your money will be invested in the company’s Flagship Fund, which already owns more than $250 million worth of real estate around the country, from apartment complexes to the red-hot housing rental market to larger last-mile e-commerce logistics centers.
Want to invest more? Fundrise offers a variety of account levels and features to fit every type of investor’s needs. Once invested, you can track your performance on Fundrise’s website and mobile app, and watch as properties are acquired, improved and operated. As tenants pay their rent, you could earn money through quarterly dividend payments, and over time, you could earn money off the potential appreciation of the property. Since 2014, Fundrise investors have earned roughly $100 million in dividends alone.
So if you want to get started in the world of real-estate investing, it takes just a few minutes to sign up and create an account with Fundrise.
*Past performance is not indicative of future results. The publicly filed offering circulars of the issuers sponsored by Rise Companies Corp., not all of which may be currently qualified by the Securities and Exchange Commission, may be found at www.fundrise.com/oc.
4. Own Property — Any Piece of Property
A massive key to generational wealth revolves around the passing down of property. You might be picturing mansions or large estates only millionaires could leave their kids in their wills.
But imagine how much easier your life would be right now if you didn’t have to pay rent on an apartment, or you had a free piece of land to build a tiny house on. That would be awesome, right? Sure, a penthouse in Manhattan would be more impressive, but anything that could remove one stressor from someone’s life is worthwhile.
There are lots of ways to make property ownership possible for the 99%. First-time home buyers are eligible for lower rates and smaller down payments. Veterans may not need to put any money down at all. Talk to a mortgage lender and see what opportunities are available to you.
So set a goal of property ownership. Any sort of property! It’s an incredible and attainable way of creating generational wealth.
5. Stop Wasting Your Money on Credit Card Debt
If you have debt, all this hard work of creating generational wealth could be for nothing! You don’t want to dump a problem like that onto your loved ones — debt doesn’t disappear just because you did.
For a lot of us, credit card debt is the biggest offender. And your credit card company is more than happy to keep charging those insane interest rates until your family pays off your debt.
But a website called Fiona could help you pay off that bill as soon as tomorrow.
Here’s how it works: Fiona can match you with a low-interest loan you can use to pay off every credit card balance you have. The benefit? You’re left with just one bill to pay every month, and because the interest rate is so much lower, you can get out of debt so much faster. Plus, no credit card payment this month.
If your credit score is at least 620, Fiona can help you borrow up to $250,000 (no collateral needed) with fixed rates starting at 2.49% and terms from 6 to 144 months.
Fiona won’t make you stand in line or call a bank. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could save you thousands of dollars. Totally worth it.
All that credit card debt — and the anxiety that comes with it — could be gone by tomorrow.
Kari Faber is a staff writer at The Penny Hoarder. She’s hoping to set her son up for a wealthy life with the decisions she makes now.
*For Securities priced over $1,000, purchase of fractional shares starts at $0.05.
**You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.
The Penny Hoarder is a Paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.