Building generational wealth isn’t about affording high status purchases, it’s about consistency, structure and foresight. Financial experts say that the people quietly setting up their families for long-term security are often doing it through patient habits and smart planning, not showy success.
Here are six signs that you’re building generational wealth steadily and quietly.
1. You Invest and Save Consistently
“One of the clearest indicators that someone is building generational wealth is their commitment to consistently saving and investing a percentage of their income, regardless of economic conditions or income fluctuations,” said Chad Harmer, founder of Harmer Wealth Management.
A disciplined and strategic approach, maintained even during challenging periods, builds substantial wealth over time.
Lawrence Gore, senior vice president at Tompkins Financial Advisors, agreed: “Consistent savings and investing improve the ability to meet long-term wealth creation goals … given tax-efficient and long-term compounding opportunities.”
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2. You Own Assets That Appreciate Over Time
Wealth that lasts beyond one lifetime is rarely built on cash alone, however.
“Long-term wealth creation is usually a combination of investment strategies,” Gore said. In addition to traditional investing, people who benefit from long-term appreciation of real estate or a growing valuation of a business, or assets such as art can all contribute to generational growth, he added.
3. You Have a Long-Term Plan
Those quietly building generational wealth tend to plan several steps ahead. They work with advisors to design tax-efficient strategies and legacy plans rather than simply focusing on short-term returns.
Truly building generational wealth in the most effective way possible requires a blueprint and forethought, according to Stephen J. Landersman, CFP, president of Unifi Advisors LLC. “In order to preserve what you have, protect it from the dangers of income tax, market forces and litigation, and finally pass it on to heirs … you will need to take advantage of all the tools available to you.”
He said that you must think with the end in mind. “What’s the vision of the legacy they want to leave for their family and their community? Without that you’re just guessing what will happen.”
4. You Include Insurance, Estate Planning and Financial Education
Protecting wealth across generations also involves careful risk management and preparing heirs to handle their inheritance wisely.
Insurance, estate planning and financial literacy “are key to educating and transitioning wealth to the next generation,” Gore said. He stressed that “financial literacy is a critical element in educating the next generation … and provides a higher probability of asset preservation over the long term.”
Insurance plays an especially key role in preserving wealth, Gore noted, and your insurance needs can change over time. “[H]aving the ability to backstop high-income earners, create liquidity upon an untimely passing and fund trusts for future needs are all key reasons to have insurance in place.”
These tools can protect wealth from taxes and litigation while ensuring it’s distributed efficiently and intentionally.
5. You’re Intentional About Future Generations
Those truly focused on legacy think beyond their own retirement. They set up vehicles to support children and grandchildren, sometimes in ways that aren’t immediately visible.
“There are many available tools for parents and grandparents to support future generations,” Gore said, citing “custodial accounts, 529 plans to support educational needs, setting up educational trusts as well as trust planning to provide future funding.”
6. You Regularly Review and Adjust Your Financial Plan
Generational wealth requires check-ins and recalibration. People building lasting wealth understand that their finances should evolve with their goals and circumstances.
“People should have a periodic check-up on their finances, i.e. assets, liabilities, income and expenses,” Gore said. “Essentially, having and updating a financial plan, allows people to monitor progress, make necessary changes and plan for the future.”
True wealth builders often don’t look rich. They prioritize funding retirement plans, education and building lasting assets instead of chasing status symbols.
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This article originally appeared on GOBankingRates.com: 6 Key Signs You’re Quietly Building Generational Wealth
