Generational wealth is not something that is easy to develop. Only 7% of U.S households has incomes over 100K per year and only around 2% have generational wealth. Generational wealth is the entry level to the upper brackets of the upper class. Like the old aristocracy it means the children of the wealthy patron never have to work.
Isn’t it the goal of most business owners to become so wealthy that they have money flowing into their bank coffers with little effort? Most of us want to be rich. It doesn’t take much to figure that out when everyone is purchasing houses they can’t afford, buying clothing at boutiques and leasing expensive cars. If we don’t want to be rich we all want to at least look rich.
Most entrepreneurs have dreams of taking their ideas and going to the finish line. They have dreams of large manufacturing plants spewing out their products, owning international firms and having their sayings quoted in books on the best seller list. These big dreams drive them to work longer and harder than ever before. A few might make it but the majority simply runs out of steam.
In order for an entrepreneur to build generational wealth and all the perks like property, education, vacations and domestic help they must understand that they no longer can run their businesses. That doesn’t mean that they aren’t involved in them but it does mean that they do not have to run them if they don’t want to. In other words their businesses are designed and set up to run independently of the owner.
Not running your business means that it is large enough, strong enough and solid enough to run on its own. There are managers who can keep the business going and growing without your constant attention, accountants who can keep track of and invest your money, and a sales staff that encourages growth. Once you have put your business on auto pilot you have the opportunity to have continual income.
Most businesses owners know that if they get sick or miss days of work they aren’t likely to make money on those days. As soon as they are done working their business is done working. Yet things cannot happen like this if you expect your children to be able to make a living off of the same industry you are.
Setting up your business takes a lot of effort and work. You must first determine what type of business you want. Do you want a Limited Liability Company, a Corporation or a Sole Proprietorship? Once you have determined the form of your business you then need to grow it and hire the right talent. This growth and hiring is probably the hardest stage to contend with. Finally, you need to set the business up for your departure so that it continues to earn your family money for decades to come.
Developing generational wealth for your family is not an easy affair. It usually takes many decades, much thought and lots of energy. The majority of people do not have this ability to stay focused on their dreams and desires for such a long period of time. Building something great is like a “right of passage” where only a few will earn the prize.