Most people think generational wealth is for old money families and trust fund babies. It’s not. It’s a mindset, a plan, and a set of decisions you start making long before you ever talk to an attorney. Emily and I have been having this conversation for years, and we finally sat down to dig into it.
The Basics
Before anything else, you have to define what generational wealth means to you. That sounds simple, but most people skip it entirely. For me, there are two distinct phases.
Phase one is retirement wealth: building a vehicle large enough that when Emily and I stop working, we’re still earning more than we’re spending. Not depleting. Growing. Most retirement plans are designed to run out right around the time you die. Mine is designed to keep compounding so there’s actually something left to pass down.
Phase two is what comes after that: the stuff you leave behind. Here’s the thing nobody talks about. You can set up a trust, name an executor, hire attorneys, and do everything “right” on paper. My dad did exactly that. He died at 54 with $2,800 in his checking account, a car he owed more on than it was worth, and a pile of credit card debt. I spent months as his executor paying off creditors. All that preparation, and there was nothing to protect.
The vehicle only matters if you build something to put in it.
A trust is essentially a tax-advantaged bucket that holds your assets, including real estate, investments, life insurance, and other holdings, and governs how they’re transferred when you’re gone. Without one, the government taxes inherited assets at an aggressive rate. With one, you control the rules: who gets what, when they get it, and under what conditions.
Potentially the most important piece people underestimate is educating your kids. What’s the point of building something if the next generation burns through it? Spending problems, bad decisions, a divorce without a prenup. It happens constantly. The financial education you give your kids now is part of the wealth-building strategy, not a separate conversation.
The Action Steps
Define your number. Know what it costs for you and your household to live well. Then figure out what you need to earn in retirement so that you’re still growing, not shrinking. That number tells you everything.
Set your kids up now. We use 529 plans for education and whole life insurance policies started early. The better financial footing they have going in, the less likely they are to blow whatever you leave behind.
Talk to a trust attorney. Not a financial advisor. An attorney who specializes in estate planning. They set the rules. A fiduciary, a financial professional with a legal obligation to protect your assets, then governs the decisions and distributions.
Don’t lock things up too soon. Trusts become illiquid. Once assets go in, flexibility goes down. If you’re still actively building and earning off your assets, you may not be at the point where everything should be tied up yet. That’s okay. Timing matters.
Keep building the snowball. None of this works if you haven’t built enough to sustain your own retirement first. A trust with nothing in it is just paperwork.
The Bottom Line
Generational wealth isn’t a product you buy. It’s a result of the right mindset, compounded over time, combined with smart legal and financial structure. Most people never get there because they skip the fundamentals: defining the goal, building past their own needs, educating the children who’ll inherit what they’ve built, and putting the right legal vehicles in place before it’s too late.
Start with the snowball. Protect it as it grows. And bring your kids along for the entire conversation.
Stock Tip
Sofi Technologies Inc (SOFI)…as I type this it is beaten up off of a decent earning report. It is trading at $15.55 as I type this. This was a $30+ stock 6 months ago. I think it is safe to buy at these levels with some stop loss triggers in place. I could see a bounce to the $22-$24 range over the next 3-6 months. That’s a 50% gain from here.
