Generational wealth is anything of value passed from generation to generation. This can be grandma’s sweet potato pie recipe. It can be academic accomplishments. It could be a trade, your dad was a plumber, now you own a plumbing company. It can be religious beliefs, like the song said I had a praying grandmother. For us, our dad passed on a hard day’s work equals a hard day’s pay, and to always pay your bills on time.
Generational wealth is also money; we are to leave an inheritance to our children’s children. Money can buy a plethora of things. 80% of today’s millionaires have first generational wealth. They are the Nouveau Riche; they are rich without an inheritance. Yes, we can point to Oprah Winfrey and LeBron James. What about Ms. Singelton the 10th grade teacher, she’s very likely to be a millionaire, or Ms. Owens the ICU nurse is also a potential millionaire. What about the electrician down the street?
The professions that we assume are rich because they “make paper” like: doctors, lawyers, engineers, and bankers may not be the wealthy. They look good in expensive clothes, luxury cars, with the big homes, in the best neighborhoods, but it maybe a deceiving look. They are dripping in student loans, credit cards, car and huge mortgage debt. It could be a façade. They postpone work to go to school and amass a lot of debt. Then they live the lifestyle of the rich and famous.
Many of us have generational strongholds: poor money management skills, the inability to consistently budget and plan, no value for education nor do we volunteer in our children’s schools. We are Mr. and Ms. Big Shot consumers. We drive well, drip in ice, dress Gucci down to the socks, designer everything, but no savings and very little in retirement.
Many of the first generation millionaires saved 15% of their incomes, invested well, lived on a frugal budget the majority of their working lives, then they had more than $1 million of net worth by their mid 50s. You must choose life, and generational wealth and live more abundantly.
In the book Millionaire Next Door (Thomas J. Stanley and William D. Danko), they surveyed thousands of millionaires. The millionaires were the most uncommon, and most unsuspected people. These millionaires were teachers, nurses, plumbers, farmers, business owners, and etc. They had ordinary professions. They didn’t dress, drive, or act how we assumed.
There’s more to life than what we think. We must prepare our children to be fiscally responsible. Start a family budget today. Set personal and financial goals. The key is to remain in the black with all of your needs and some of our wants met, while saving and preparing for tomorrow.
What generation nuggets are you passing along. My children are expected to think outside the box, pay their bills on time, balance of their budgets, and set and accomplish their goals.
Don't sleep on your hairstylist, she may be the next millionaire.