A common mantra recited by most young people of African descent is, “generational wealth in my family begins with me.” And quite frankly, I love it. I love it for them, myself, and for what it represents. There is a fighter spirit behind that statement that denotes a shift in attitude towards attaining, retaining, and transferring wealth to our future generations. But, what is generational wealth and how do we get it?
Understanding what generational wealth means is important. And according to this post by Mark Henricks, “Generational wealth is wealth that gets transferred from one generation of a family to the next. It may consist of valuable assets such as cash, real estate, securities, or ownership of a family business. It may also take the form of contacts, education, and our ability to take greater risks.1” Sounds simple enough, but for a generation that will inherit little2 to nothing from our parents, it is not as straightforward.
For us, it is a complex process that requires taking deliberate steps to learn new habits while also dodging misleading information in order to avoid expensive mistakes that can derail our plans to attain wealth. It means planning, sacrificing, constantly gathering, and filtering through mountains of information to find nuggets of gold. It also means implementing those plans, evaluating and tracking our results, and being prepared for lucrative opportunities when possible, and nothing to do with being lucky. However, “luck is what happens when preparation meets opportunity.3″ For those who are tired of acting as observers, rather than being involved in the process of wealth transfer, it is a worthwhile venture.
Assets like real estate, insurance policies, and investment portfolios don’t just happen, they are acquired. For some of these assets, the cost of entry is less than our monthly cost of entertainment. But what we don’t know, we can’t implement. Conversely, being knowledgeable and not applying that knowledge is as bad as not knowing. If we want generational wealth, we have to first seek knowledge then apply what we’ve learned.
It is advised that we begin by setting aside a bit of our income in an interest-bearing account, as soon as possible. It is also advised that having a long-term, realistic goal is as important as consistency, discipline, intentionality, and maintaining a delayed gratification mindset. All have to work conjointly if we are to reach our goals. Finally, our rate of return will depend greatly on how risk-averse we are, and the type of investments we make. Smart investing balances risk and reward, and allows us to create an additional source of income, attain financial freedom while also creating wealth we can pass to future generations.
I know building wealth is a slow, boring process but when the goal is generational, it pays to go slow and steady. Finally, I am optimistic that armed with this knowledge, our dreams of generational wealth will become visions on a board, with small steps we are taking to achieve it.
Cheers to you, on this journey. See you on the other side,