No matter your family background, you can contribute to the financial future of your children and grandchildren by understanding the power of generational wealth.
 
Generational wealth is any asset that is passed down from one generation to the next, including cash, real estate, stock, a business, financial knowledge, and more. It’s often referred to as a wealth “snowball” because—ideally—each generation increases the value of the assets and then passes a bigger snowball to the next generation. (1)
 
For example: A couple buys a house, pays it off, and leaves it to their daughter in their estate plan. She sells the house and then makes a down payment on a larger house, pays for her children’s college tuition, and invests in the stock market. Her kids start their working lives debt-free—and one day they will inherit the family home and stock portfolio, which will be a safety net if they decide to start their own business. And the wealth snowball keeps growing!
 
No matter how much money you have, you can start a wealth snowball for future generations of your family—or you can maintain and increase the snowball that you received. But by all means, don’t let it melt! Take these steps:
 
Strengthen your current financial situation.
If you don’t take care of your own finances, you won’t be able to help your children. So, make a budget, establish an emergency fund, use debt carefully, work to pay off your home, and plan for retirement.
 
Teach money skills to your children.
Many prosperous families lose their wealth in a generation or two due to bad money management. Ensuring that your children are financially literate is a huge investment in their future. Talk to kids about money in age-appropriate ways. Give them an allowance, and encourage them to find a part-time job so they can learn to budget, save, and acquire other money skills. As your children grow older, you can continue to be their financial mentor. 
 
Create an estate plan.
Only 32% of American adults reported having an estate plan in 2024. (2) Be ahead of the curve, and make an estate plan right away. Be sure that your assets are distributed according to your wishes—and avoid potential family conflict, extra legal expenses, and a long probate process. 
 
Invest for the long term.
Grow your money over time—with stocks, real estate, and other long-term investments. Utilize the magic of compound interest. You may want to consider the advantages of a life insurance policy. Slow and steady wins the race.

Be sure to participate in your employer’s 401(k) retirement plan, and encourage your adult children to do the same. If they begin contributing while they are in their twenties—and take advantage of the matching funds offered by their employers—they will build wealth over four decades, enabling a comfortable retirement. 
 
Give the next generational a head start.
If you are able, you can help your children add another layer to the family wealth snowball in your lifetime. Paying their college tuition enables them to avoid student loans, and helping them with a down payment on their first house allows them to begin building home equity. 
 
Get advice from professionals. 
As you work to build, maintain, and grow your family’s wealth snowball, you’ll have questions that only a financial professional should answer. Contact the team at Excite Wealth Management. With their time-tested track record, you can count on them to be your collaborative financial partners. They’ll take the time to understand your current situation and your goals, so you can leave a lasting generational legacy.