Building and protecting generational wealth can seem like a daunting task, but families and individuals stand to benefit from understanding how it can significantly impact their financial futures. To learn more about this important subject, we’ve turned to U.S. Money Reserve, one of the country’s largest distributors of government-issued precious metals.
Understanding Generational Wealth
Generational wealth, sometimes referred to as family wealth or legacy wealth, involves situations in which an individual passes their personal wealth or assets on to other members of their family. A common example of this is when a parent or grandparent leaves their financial assets to a child or grandchild.
Generational wealth is important because it has the potential to provide a firm foundation of financial stability for those who inherit the wealth. If handled proactively, this type of wealth can provide stability for future generations and can help hedge against volatility in financial markets that might otherwise put individuals in a precarious situation. The potential for longer-term gains and financial security makes generational wealth a critical financial topic. Families should strive to understand the different types of generational wealth, how it can be built, and how recipients may want to manage this wealth.
Building Wealth That Can Be Passed Down
To leave behind wealth, you must first cultivate it. While this can be easier said than done, there are some common approaches worth exploring. One method is purchasing stocks. The stock market is known for its historic ability to provide returns to participants. While risk and volatility are always factors to contend with, one potential benefit may be the creation of generational wealth if participants remain active in the market for a long period of time and maximize their returns.
Real estate is another method used to create generational wealth. There are many potential avenues for this method, such as appreciation of owned real estate or acquisition of supplemental income by renting out properties. A real estate asset may appreciate over time as inflation rises and its underlying usefulness remains in demand. For real estate used as an income-generating rental property, rent collection can turn a smaller sum of up-front money into a larger sum over time through collected payments.
Lastly, recipients of generational wealth may benefit from learning more about precious metals and how they can play a role in diversifying a financial portfolio. Precious metals have often been highlighted for their ability to serve as a safe-haven asset class that can help protect portfolios in times of economic turmoil and appreciate in price over the long term. As such, purchasing precious metals can be part of an overall strategy of diversification to hedge against the risks involved with single-asset portfolios.
Preserving Generational Wealth
Once generational wealth is created and passed to a subsequent generation, the question can then become how to preserve this wealth. While there are many options here as well, U.S. Money Reserve suggests first building an educational foundation that can help guide recipients’ choices. Possessing a better understanding of the available options for wealth preservation can help inheritors avoid common pitfalls such as engaging in overly risky activities or failing to diversify their assets, which can lead to losing portions of an inheritance.
This is why diversifying with precious metals can be so advantageous. Gold has the benefit of being a tangible asset that can be passed directly to recipients, which may give individuals greater control over how their wealth is disbursed. The benefits of holding gold can also be realized through a self-directed precious metals IRA. Regardless of method, owning gold and other precious metals is considered by many to be a time-tested method for creating and preserving generational wealth.
You can learn more about making precious metals part of your own generational wealth plan by speaking with a knowledgeable U.S. Money Reserve Account Executive.
About U.S. Money Reserve, America’s Gold Authority®
U.S. Money Reserve is one of the nation’s largest private distributors of government-issued gold, silver, platinum, and palladium products.
Founded in 2001, U.S. Money Reserve has grown into one of the world’s largest private distributors of U.S. and foreign government–issued gold, silver, platinum, and palladium legal-tender products. Hundreds of thousands of clients across the country rely on U.S. Money Reserve to diversify their assets with physical precious metals, primarily in the form of legal-tender gold and silver coins.
U.S. Money Reserve’s uniquely trained team includes coin research and numismatic professionals equipped with the market knowledge to find products for precious metals buyers at every level. U.S. Money Reserve goes above the industry standard to provide superior customer service, with the goal of establishing a long-term relationship with each and every one of its customers. U.S. Money Reserve is based in Austin, Texas. Like them on Facebook, connect on LinkedIn, and follow on Twitter.