Redefining Generational Wealth: The Unspoken Requirements
It’s been said that money makes the world go round. Whether you subscribe to that way of thinking or not, what can’t be denied is that money and finances heavily influence nearly every aspect of our society and personal lives — regardless of if we like it or not. So, it’s no surprise that the concept of generational wealth is one that has been around for thousands of years. If you’re like me, your understanding and appreciation for it is rooted in Biblical principles. More generally, the thought of having enough money and financial assets to sustain yourself and immediate family in the present, as well as family you may never even meet well into the future, is a circumstance that almost anybody would welcome. Because of the pivotal role money plays in our lives, the thought of achieving true generational wealth assumes a sense of freedom and peace, since the stress of financial hardship is not looming.
What exactly is “true” generational wealth, though? A quick Google search will give some version of the definition I offered above: the passing of assets with financial value from one generation of the family to the next. By this definition, there is no specific amount of money that constitutes wealth. Any form and/or amount of (a) financial asset(s) could be passed down, regardless of the total value. However, in our society, we also use terms such as working class, middle class, rich, and wealthy to establish just how many (or little) financial assets somebody has amassed. In other words, it’s levels to this money game. Although the way to distinguish between rich and wealthy is often discussed as being that of principles and mindsets as opposed to actual value, the general consensus is that wealthy is a step or level above rich. In the great words of the Shawn Carter: “F*** rich, let’s get wealthy.” With this in mind, the idea of generational wealth is not solely about passing any financial asset along, but a surplus that can give the next generation and beyond a level of financial comfort that will benefit them greatly.
But what if the way we have been thinking about generational wealth has been incomplete? More specifically, how do our ideas about generational wealth change when we consider the need for more than financial assets to generate and maintain it? Many blogs and online think pieces dedicated to helping people figure out how to build generational wealth will usually list similar steps or ways to earn more money and invest it properly. Yet, focusing solely on the financial aspect of generational wealth is a privileged mindset that, at best, takes for granted several other factors required to establish that wealth. Based on my own experience, as well as the observations of the lives of others (often up close, but also from a distance), it appears to me that there are major interpersonal and intrapersonal aspects of generational wealth that we largely ignore. Allow me to use my personal experience as just one example.
As my wife and I strive to be as intentional as possible about building generational wealth for our family, I can’t help but recognize that there is absolutely no way we could do it alone. It has required the help and support of family and community, along with the blessing of good health, to make whatever progress we have been blessed enough to make thus far. As two well-educated, established professionals with a 6-year-old daughter, we are in a financial situation where we don’t have to live check-to-check, but we also have plenty of days where we are tired, stressed out, and in need of mental breaks. One of the saving graces for us is having loving, supportive parents in close proximity who can take our daughter for a night or a weekend when we need a quick getaway. We also have a great, affordable daycare that has been instrumental in our daughter’s development, the ability to take time off of work when needed, the capability to pay increased prices for healthy food, have the access/ability to pay for therapy, and more. Having all of these people and resources has also allowed us to continue to grow in our personal and professional development, which lends itself to more increase and progress toward our financial goals.
Don’t get it twisted, we’re not “rich” or wealthy…yet. We are constantly planning for our financial future. However, simply creating the time and mental capacity to do so has required us to take advantage of all the benefits I listed above. What happens if we don’t have those luxuries, though? Imagine if our parents aren’t around or we’re not on good terms; if we didn’t have outside help to work through or process our anxiety and mental stressors; if we couldn’t take vacations or breaks when needed; if we had physical health issues that required us to be in the hospital on a regular basis, pay for several forms of medicine, or limited our activity; if we didn’t have each other in raising our daughter and were doing it as single parents on one income. Any one or more of those scenarios being true would have made it substantially more challenging for us to have achieved any financial goals we have set for ourselves. Unfortunately, far too many people do not have the same privileges we have been afforded, and so, taking the steps to build generational wealth is exponentially more difficult.
As a Black man in America, I can’t examine my own journey without considering the historical context of my community. So, this is the part where we do a brief history lesson. We all know that everything about the experience of Black folks in America has some connection to the enslavement, oppression, and systemic discrimination we have faced in this country. Of course, the disproportionate accumulation of financial assets such as cash, homes, or businesses is just one consequence of this unjust treatment. It has also been documented that our community has several physical, mental, and emotional health challenges that impact our quality of life, as a direct result of systemic disenfranchisement (read up on environmental racism, as just one example). There has also been a fracturing of families that we have been dealing with since we were brought to this country. So, while I have been fortunate enough to take advantage of the love and support of my family, and been healthy enough to maintain a level of stability that has prevented any significant interruptions to my life, the same cannot be said for too many in the broader Black community. Given how significant support from loved ones and overall health is to building and maintaining generational wealth, reconsideration of what constitutes it and how to generate it may be required if we are going to increase the wealth within our community.
My proposition is that we no longer think about establishing generational wealth solely from a financial standpoint. Instead, I would argue that it takes minimally three things: 1) sufficient health, 2) a village, and 3) financial stability. Allow me to explain:
Health
Health consists of our overall physical, mental, emotional, and spiritual well-being. To be unhealthy in any of these areas can prevent people from being their best selves and following through on the necessary steps to generate wealth. From a practical standpoint, the ability to create and enjoy generational wealth literally requires you to live, much less have a quality of life that makes it possible to do what is required to build the wealth. The ability to hold down a job and/or get established in a career, stick to a financial plan, and have available funds to invest all require a level of stability in your health. Any significant interruption to a person’s well-being can either make it physically impossible for them to make steady money or can cause such a level of distress outside of their physical abilities (severe anxiety, trauma, mental illness, etc.) that “getting by” is the best they can do. So, while suggestions to invest in the stock market and creating a business may be great advice for starting your generational wealth journey, it’s also crucially important that you take stock of your health and do what you can to maintain it so that you can live long enough to generate said wealth. This includes eating well, exercising, healing from trauma, staying spiritually grounded, etc. Without health, generational wealth cannot be established.
Village
Additionally, it takes a village to help support the overall health of any individual. Strong relationships with family, friends, and other community members who can assist with raising kids, providing resources, making connections, sharing information, creating new opportunities, and more are invaluable. We all need to lean on others at different times, and it is essential to have people who can step up to support, as needed. Having loved ones in our lives also brings us joy and contributes to overall quality of life. Further, children are the ones who will ultimately inherit this wealth. Establishing strong family ties also makes it easier to set the next generation up for financial success and help them understand how to manage what they will ultimately inherit. It also limits any fighting, disagreements, or disappointment about how the wealth is distributed. That and your actual financial plan, which leads us to the final element…
Financial Stability
Of course, health and a village aren’t enough to achieve generational wealth if we don’t have financial stability. This stability constitutes livable wages, access to affordable services (e.g. daycare, grocery stores, transportation, etc.), and access to financial literacy. In other words, you need to be able to have enough money to live, pay bills, have enough to invest, and be educated on how to do so to create a foundation for your wealth. Part of the education about finances and wealth includes how to increase it and how to properly pass it down through the generations. This includes all those practical tips and tricks for how to increase the value of your money as much as possible, as well as coming up with a plan for what happens with your wealth when you ultimately go to glory (e.g. a trust) and transparent conversations with your kids/loved ones about finances. The ability to build wealth, having a plan for it beyond yourself, and teaching your children/the next generation about how they can maintain it are all necessary for generational wealth to start and last.
If any one of these elements (health, village, financial stability) are not well intact, the chances of building generational wealth become increasingly difficult. You not only need all of these to build generational wealth, but they should be how we define it. The family members who inherit the wealth also need all of these elements to sustain it. If there is not a quality of life that allows the person/people who inherit the wealth to live long, the village to help them maintain their health and fortune, or the education about how to manage it, then that wealth is not likely to last long. Neither the person/people passing along the inheritance nor the person/people receiving it should feel that they have generational wealth if they do not feel that their health, village, and finances are all in abundance. The entire premise of generational wealth is that it is being handed over to other people. But if those people are not in the best position to take care of that wealth, it effectively ceases to be generational.
We can’t truly help people achieve generational wealth if we don’t think about it more holistically. For those who say they want to help people build generational wealth, guidance about how to establish it can no longer be reduced to financial assets. Similarly, we can also acknowledge when people or organizations are setting the groundwork for generational wealth in ways that have nothing to do with money. I think about my own work in serving young people and emphasizing their well-being from a holistic perspective. While it may sound cliché, the notion of planting seeds that will help students live more healthy lives and feel connected to a community of people they can rely upon is vital. Even if those of us in youth development are not able to provide the financial stability for students ourselves (in some instances we can), we use our village and network to so. Although we’re ultimately “playing the long game,” the very idea of generations spans over the course of a much longer time frame. Therefore, the investment in people and their development over the span of a few years is also an investment in their wealth and the generations that will benefit from it.
I’ll reiterate that I’m still trying to figure all of this out myself. I don’t claim to have all the answers about generational wealth. I also don’t presume that what I have outlined in this article is a complete model or definition. That said, I hope it serves as a way for us to think about generational wealth in a more complete and nuanced way. By doing so, we may have a better chance of building, achieving, and enjoying that wealth across generations, the way it is intended to be. If we can get our health and our villages right, then maybe we can get our money right too. For us and those to come.
