Many people move to the US in search of a better future for themselves, their family, and generations to come. However, as an immigrant to a new country, one of the most difficult financial challenges is building wealth from scratch.
That’s because new arrivals typically do not have the same access to investments, properties, money, and other financial assets which can be passed down from generation to generation.
Combined, these assets are often referred to as generational wealth.
But we have great news!
It is possible to start building wealth so that your family and future generations have the money they need to thrive in this new country you call home.
To get you started, we’ll explain what generational wealth is and provide some tips on how to build it.
What is generational wealth?
Generational wealth is simply the financial assets passed down from one generation to the next.
Some examples of wealth that can be passed down include:
- Real estate/property
- Stocks and investments
- Financial education
Generational wealth begins to build when you pass your wealth to the next generation, and they are able to add to that wealth before passing it on again.
How to build generational wealth
Now that you know what generational wealth is, it’s time to start learning how to create it. Follow these tips to get started on the path to building generational wealth:
Investing is one of the most important steps to building wealth that will continue on for generations. Whether you’re investing in stocks or bonds, having money in the stock market gives you the potential to grow your investments for generations to come.
However, investing can be scary, because it comes with risks.
If you’re just starting out trying to invest, read guides and get expert opinions to determine what investments will be best for you and your situation.
The best part about investing is you don’t have to be rich to get started. You can already start investing with just a few thousand (or even just a few hundred) dollars.
2. Start a business
Many migrants come to the US with the hope of starting their own business.
Did you know?
There are approximately 30 million small businesses in the United States, which makes up 99.9% of all American businesses.
Businesses are great generational wealth builders because they can provide both income and job security. If your children don’t want to take over the business, you can also sell it and pass on the profits.
3. Buy property
Investing in real estate is a great addition to your generational wealth portfolio for several reasons.
First of all, if you’re renting, it may be worth considering buying a home if your finances allow, because then you will be paying towards a mortgage rather than to a landlord.
Hopefully, you will be able to sell your home for a profit in the future. Otherwise, you can pass the house on to your children to enjoy or sell.
If you already own a home, you can also invest in a second house to rent out for extra income.
4. Sign up for life insurance
Life insurance is the best way to guarantee that your children will not be burdened with expensive costs if something were to happen to you.
Most basic life insurance policies cover funeral expenses, but you can also purchase more comprehensive plans that will pay out a lump sum to whoever you name as your benefactors.
This is especially important if you have children or dependants who rely on your income for financial support.
If you are employed, check with your employer if life insurance is included in your benefits package (which is common in the US).
5. Save money
This one may sound obvious, but most people do not even save enough for their retirement, let alone for the family they will someday leave behind.
If you feel that you have already saved enough for a comfortable retirement, it may be time to start a savings account to pass on to your children.
Another option is to set up a specific account to save all of your passive income, whether that be from a business, property investments, or stocks. The point is to have money to pass on so that the next generation can have the financial means to live debt-free and without financial worries.
6. Enlist professional help
Personal finance can be tricky, so there’s no shame in getting professional help.
You can ask a financial advisor, an accountant, someone from your bank, or even knowledgeable contacts.
You may have to pay for a financial planner, but the financial gains could be worth it in the long run.
It’s especially important to enlist the help of an accountant who can assist with all matters related to taxes.
How to pass on generational wealth
Building generational wealth is a lifelong journey. However, when you feel comfortable that you have accumulated enough wealth to pass on, it’s time to start planning how you will do it.
In general, to make sure your estate is passed on correctly according to your wishes, it’s important to do the following in preparation:
- Establish an estate plan
- Write a will
- Determine account beneficiaries
- Start custodial accounts
To make sure everything is done properly, you may want to consider consulting with an attorney. That way you can have peace of mind when it comes to passing down the generational wealth you have worked so hard to create.
Are you interested in learning more about creating a healthy financial future in the US?