Leaving behind a substantial inheritance to your heirs in the form of assets such as real estate, stocks, bonds, a business, precious metals, jewelry, art, currency, or anything that contains a financial value is generational wealth transfer.
Building generational wealth and passing it down to your heirs could have a tremendous impact on their financial future and provide a high level of economic security.
Definition of generational wealth is when you have accumulated enough investments to pay for your heirs’ living expenses in perpetuity without touching the principal.
Since living expenses, investment returns, tax laws, and spending of future generations are varied, it is hard to put a number on what is considered generational wealth.
After you have taken care of all your financial needs, then start planning for generational wealth. Accumulating income-generating assets as part of your legacy wealth plan could take time unless you had wealth passed down.
Make sure you have a decent-sized emergency fund earning high-interest rates. Maintain an excellent credit score so you can qualify for the most competitive loans with the lowest interest rates.