Building Multigenerational Wealth with Passive Income

What Is Multi-Generational Wealth?

Multi-generational wealth is built by acquiring generational assets that are then passed down to your heirs. Assets are properties or valuable objects you own which make you money. For instance, real estate passive income is considered a generational asset, since you get money deposited into your account for owning those assets. After you die, those real estate assets are left to your heirs and then they collect the passive income.

Why create multi-generational wealth?

You create multi-generational wealth in order to provide opportunities and a better life for your children and other heirs. The efforts that you put into your work and success was for the sake of providing yourself and your family a better future, so they would not have to struggle as you did to make it that far.

School children are already being pressured by their parents to become superhumans in order to be admitted into an elite university because it is believed that their education provides a stable and financially secure future for them. However, consider the rise in population and the use of the common application that forces their acceptance rate to remain under 10%; think about how jobs are now being outsourced to cheaper labor, so the transfer of skills is easier; remember that real estate costs, food, gas, and tuition rates are rising faster than the wage growth.

Building Multi-Generational Wealth with Passive Income

Building multi-generational wealth means owning real estate that would generate cash flow profits. This kind of investment does not generate quick profits like house flipping—you need a strategic plan and many years of investing in order to be successful. There is a proper kind of knowledge and appropriate properties to invest in, for multi-generational wealth to accumulate. Other investments such as a 401K, or stocks and bonds, do not hold value in perpetuity as real estate does. If there are people, they will need housing to live in, and as long as there is housing for them to live in, real estate investments profit from that.

For example, real estate investors of the past built multi-generational wealth by using passive income to fund their retirement and their children’s college tuitions and costs. After their death, these investors left income-producing properties to their heirs, and they continued to reap the profits from that passive income.

Almost Impossible to Lose Your Principal

The biggest contrast here lies with stocks which can crash and burn investors. Prudent investors would diversify portfolios and hedge against major losses, but this is still a risky scenario. When it comes to real estate, however, it is impossible to lose your principal investment entirely. For instance, even after the crash in 2008, most real estate properties lost between 20%-50% of their total value. Real Estate is exactly what its name implies: Real. As a result of that, you will not lose your principal investment—especially if you have insurance—even in a tragic loss, such as a flood.

The Grind for Greatness

We work hard for the sake of building a stable future for ourselves and our families. Our greatest success at the end of the day is hoping that we made some progress towards that goal, by increasing our net worth, acquiring more assets, getting more income, and finally having that opportunity to spend quality time with everyone in the family and providing for our children what we could not have. Some days, however, it feels like we’re grinding along the “another day, another dollar” mentality. If you think about it, though, each day and each dollar adds to the next.

The Gift That Keeps on Giving

It’s a depressing thought to know that one day, we won’t be alive to reap the full benefits of the seeds we sowed. The comfort that comes from our hard work is knowing that our children would amass the knowledge and wisdom we passed down to them and they would be prudent enough to care for themselves and not have to struggle as we did. Though life insurance is great, it is a lump sum that will be spent, hopefully, invested but will otherwise disappear. In real estate, however, once the property is paid off, it will continue to provide profits for future generations long after you die.

Generational Wealth transfer

Think about all the college graduates in today’s harsh economy who cannot afford a home like the generations before them due to the exorbitant prices and the immense loans they need to work and struggle to pay off. Imagine how much it would be for their children.

If parents pass the property down to the next generation, not only does it lessen the stress of having to pay rent every month, but it also provides that new generation an opportunity to save up and profit from a real estate investment of their own.

A Money-making Play on Inflation

Owning real estate during inflation still makes you a profit, so forget about trying to protect yourself against it. If there is hyperinflation, your cash will rapidly devalue as your real assets surge in nominal value. Economic tightness always returns, and it brings with it, a new wave of property pricing.

Little Effort to Build Wealth

The largest effort you’ll have to make when it comes to real estate investment is in research, more specifically, it’s in researching the kind of property you want to buy, the market, the neighborhood, and the economic growth. Then, once you buy the property, you just need to find the right property management team and the tenants who will rent it from you and pay off your mortgage.

Tax-free Profits

According to the tax rules, the first $250,000 that you make in profits as a single applicant, and the first $500,000 that you make as a joined couple, are considered tax free. This only happens if you live in your property up to two years before the sale. However, for you to bank the $250,000 in after-tax profits, you will need to make about $450,000 in gross profits.

Serves a Utility Function

Unlike cash, which serves no utility function, apartments and rental homes provide a fundamental human survival need: shelter. Even if our financial system fails, your real estate remains as a tangible asset that you can utilize.

Semi-passive Income Generation

By creating a multi-generational wealth, you benefit from rising principal values that are caused by inflation, income growth, or job growth. In cases such as those, you can increase the rent on the properties you own and profit from, while your mortgage remains the same as it was before. That means that you have a larger cash flow in your pocket, with returns that would potentially be 100% passive.

Let’s create multigenerational wealth for your family through multifamily real estate investing. https://1mflourish.com/ 734 635 0684.