CentrAL INC! | Central Alabama Business Journal Mar/Apr 2024 March/April 2024 | Page 40

GO-TO

STRATEGIES FOR BUILDING

GENERATIONAL WEALTH GENERATIONAL WEALTH

Learn how to create a nest egg that can sustain your family ( and future family ) long after you ’ re gone .
The phrase generational wealth is thrown around a lot with the consensus being it ’ s a goal worth pursuing . But aside from the obvious — who doesn ’ t want to be wealthy ? — why is it something we should strive for and what are the practical steps to achieve it and pass it on ? We asked local expert Shaw Pritchett , President and Wealth Advisor with Jackson Thornton Asset Management , for his insight .
GEN WEALTH 101
CINC : What is “ generational wealth ”?
Pritchett : The specifics of the definition vary among individuals , but basically , it ’ s wealth that someone generates that is expected to last beyond their lifetime . Many probably think it has to be this massive amount , but that varies too , and depends on a lot of factors , like different lifestyles .
CINC : Why should someone work to build it ?
Pritchett : Often , the people who deem it important are the first to create it , meaning they didn ’ t grow up with the benefit of generational wealth . They view it as a way to give family members a leg up , opportunities they may not have had . They know decisions they make today can give future branches of their family tree an advantage .
That said , we deal with some people who express reservations about passing on a lot of wealth , probably thinking about the old saying , “ The first generation makes it , the second generation maintains it , and the third generation spends it .” These people are concerned about creating an entitled mentality in future family members ; they see that as a hindrance that could wipe out wealth ’ s benefits .
MAKE MORE , SAVE MORE
Saving is essential to creating generational wealth , but the more money you make , the easier it is to put money aside . Consider an additional revenue stream to boost your income . A popular choice is creating a source of passive income , which is money coming in from assets that requires little time or continual effort . One example is buying a house ( or houses ) to rent . Or add a side gig to your current job .
40 CentrAL Inc !