If I were asked to name my great-grandfather, I wouldn’t have the slightest clue despite the fact that I am a member of Ancestry.com. I have tried honestly to find out but the fact is my great-grandfather didn’t leave a legacy.
When most people think of generational wealth they think of the Rockefellers, Carnegies, or even the Hiltons (shout out to Paris). Actually you can see the effects of generational wealth every day in the city. I see it in the leaders of my favorite non-profit organizations. I see it in the vast majority of Ivy League students. I see it in the young crowds of party goers on the East Side of Manhattan. Because of the contributions of their parents these young people are living their life with the welfare of successful parents. We call it “old money” so as not to be confused with young money. However young money doesn’t always turn into “old money”. Truth is without financial planning our US tax code makes it very difficult to transfer generational wealth.
Creating generational wealth is doable for everyone. It starts with the desire to give your children all the opportunities of a privileged life. If your education stopped at a high school diploma you want your children to have college degrees. If you work hard every day yet don’t feel appreciated you want your children to pick a better career path. Thinking of legacy creation and generational wealth building requires the ability to understand the long-term impact of assets and liabilities. In his Rich Dad, Poor Dad series Robert Kiyosaki defines an asset as anything that puts money in your pocket and a liability as anything that takes money out.
The truth is in order to retire and leave a legacy today you have to be a millionaire and in certain parts of the country a multimillionaire. What steps are you taking to create generational wealth? What will be your legacy? Will your great-grandchildren know who you are?