Building and Destroying Generational Wealth

in Project HOPElast month

Being born into wealth doesn’t guarantee sustaining the wealth, and it takes a lot of effort to maintain finance especially when it has to be passed down from generation to generation. Making money is something great but sustaining generational wealth is where great task is. Unlike personal wealth, generational wealth is passed down and in most cases in form of assets which the offspring need to keep growing and improve on so as to pass to the next generation. While self-made millionaires and billionaires, lottery billionaires and millionaires can lose their wealth easily and still have to start from the scratch up, families with generational fortune must not lose their family wealth as it has become a legacy.

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If you have heard of the Rothschild family who is into banking, Rhodes Family, the Walton Family and so on. This families have been able to grow their wealth over time gradually. It isn’t about making billions and trillions in the first generation, it is about growing the wealth each generation as time passes by.

Investing in the long term is one thing that the families who invest for generations do. You cannot invest in stocks and bonds and expect that it is passed to generations and they would withhold the family wealth, not because they can’t keep doing stocks or playing with the stock market, but because the investment itself is a high risk one, the investment can be liquidated anytime and so on, then it is not advisable to use this as family wealth. Families who want to grow generational wealth usually invest in lands, metals and stones, building and in some cases putting investment in trust funds, Family owned properties and family owned businesses.

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Family owned wealth, often gives the family a good start when it comes to investing for generations, although most of the people who are born into generational wealth and have to handle generational businesses do not get out of it till they die as they have to continue the family legacy. Family wealth often allows their generations get opportunity.

A lot of family wealth has been lost as a regards of improper care, greed from generations to come, and lack of sacrifice, bad investments and decisions around the family wealth is one major setback to family wealth creation.

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@tipu curate

good article, it is a great challenge for the family fortunes to survive the passage of time since the generation that receives it does not have an awareness of what it costs to accumulate it.