What Is Generational Wealth (And Why You Need It)
Generational wealth is money that gets passed down to your kids and grandkids. But what it represents is so much more than that.
It's financial freedom - It's options.
It's the ability to make choices based on what you want, not what your bank account tells you.
Most people think that in order to build wealth, you have to be born into money or get really lucky.
But the truth is: The wealthiest people in the world didn’t rely on luck to get them there.
They built a system and followed it.
Think of it like climbing a mountain - you won’t get to the top in one day.
The higher you climb, the more you learn. And the more you learn, the more you could potentially earn.
Most people fail at building wealth because they don’t build a proper system.
They invest before they save, have too much debt, or don’t know where they’re money goes every month.
That's like trying to run before you can walk.
Today, let’s break down how to build generational wealth in 6 steps - we’ll show you what you need to do and give you actual steps to implement along the way, with our CLIMB to Wealth framework.
CLIMB stands for:
C - Create your financial base.
L - Lead your money.
I - Interest-free living.
M - Multiply your income.
B - Be great.
Once you’re done, keep reading to learn how you can find unique potential opportunities with our weekly investment report, Market Briefs Pro.
Why Building Wealth Starts In Your Head (Not Your Bank Account)
Before you actually start stacking cash, you need to build a wealthy mind
You could hand someone the best investment opportunity ever. If they don't believe they can do it, they won't.
All success starts with your mindset. You have to be wealthy in your mind before you can be wealthy in your bank account.
Why It's Your Duty to Become Successful
Here's a harsh truth: The majority of people are broke. Over 50% of people are unhappy with their money. Over 50% hate their jobs.
The wealthiest people on the planet didn't get there because of their job. They got there because they were business owners, investors, and asset owners.
If you don't understand money, you'll always work for people who do.
The Two S's That Keep People Broke
Saving and spending.
If you save all your money, inflation eats it alive. Your $1,000 today buys less than it did 50 years ago.
If you spend all your money, you have nothing left to invest.
The key? Save strategically, then invest aggressively.
Action Steps for Building Your Mind:
- Think about what you're willing to sacrifice - Building wealth requires the decade of sacrifice. What are you willing to give up now to get what you want later?
- Write down your "why" - Who are you doing this for? Yourself? Your kids? Your parents? Write it down. This drives you through hard times.
- Change your language - Stop saying "I can't afford it." Start asking "How can I afford it?" This simple shift changes everything.
Why This Matters
You can learn every financial strategy in the world. But if you don't believe you can do it, you won't.
Build the mindset first and everything else should follow.
How to Create Your Financial Foundation (The Right Way)
One you have you build your mindset, you’re ready for the climb.
That starts with C - create your financial base.
The bigger the house, the deeper the foundation needs to be - the same thing applies to wealth.
First, Understand How Money Really Works
There are two ways to get paid in our economy:
- From your labor - You trade time for money (jobs, contracts).
- From your equity - Your assets make money (stocks, real estate, businesses).
Most people only use option one. Wealthy people use both.
Second, Save Your First $2,000 (Fast)
If you don't have $2,000 saved, you're in the financial danger zone.
Your car breaks down? You go into debt.
Your AC stops working? You go into debt.
Your kid breaks their arm? You go into debt.
Here's how to save $2,000 fast:
- Cut spending aggressively - No restaurants, No vacations. This is temporary, but necessary.
- Sell your stuff - Got extra electronics? Clothes you don't wear? Furniture collecting dust? Sell it.
- Negotiate your bills - Call your cell phone company. Call your insurance company. Ask for better rates or temporary discounts.
- Report your finances - Take 60 minutes. Write down every dollar coming in and going out. Find where you're overspending and where you can cut back.
Third, Pay Down High-Interest Debt
If you have high-interest debt, it may be destroying your chances at building wealth.
Credit cards charging 20%+ interest? That will eclipse any return you get from investing.
Two methods work:
- Debt avalanche - Pay highest interest rate first (saves most money).
- Debt snowball - Pay smallest balance first (psychological wins).
Pick the one you'll stick with. That's the one that works.
Action Steps for Your Financial Base:
- Build your financial report - Spend 60 minutes tracking every dollar
- Save $2,000 as fast as possible - Get aggressive
- Pay off credit cards - Stop bleeding money
- Set your savings goal - Figure out 3-12 months of expenses
Why This Matters
You can't invest what you don't have. Create the base first, then build on it.
How to Make Your Money Work For You (Even While You Sleep)
Now that you’ve started to climb, it’s time to L - Lead Your Money.
There's a limit to how much you can work. You need sleep, you have to take breaks.
But your money can work 24/7, 365 days a year.
In order to build generational wealth, you need to learn how to put your money to work so it grows even when you're not working.
Build a Financial System
Most people follow the same pattern: Make money → Spend money → Wonder where it went.
Wealthy people follow a different pattern: Make money → Invest money → Spend what's left.
The difference? A system.
The 75-15-10 Rule
For every dollar you earn:
- 75 cents maximum = spending.
- 15 cents minimum = investing.
- 10 cents minimum = saving.
This scales with your income.
Make $30,000? Follow 75-15-10. Make $300,000? You can follow the same rule.
Once you hit your savings goal (3-12 months of expenses), convert to 75-25. Now you're investing 25 cents of every dollar.
Want to go aggressive? Try 50-30-20:
- 50 cents maximum = spending.
- 30 cents minimum = investing.
- 20 cents minimum = saving.
To do this, you'll need three different bank accounts.
Create Three Bank Accounts
- Spending account - Your daily expenses.
- Investment account - Money waiting to be invested.
- Savings account - Your emergency fund.
Why three? So you don't accidentally spend your investment money or save your investing money.
You can even automate this in 2026, so it’s easy to separate the chas you want to sav , spend, or invest.
Action Steps for Leading Your Money:
- Create your financial system - Pick 75-15-10 or 50-30-20.
- Open three bank accounts - Separate spending, investing, saving.
- Stick to your goal - Ignore quick-money schemes or random “hot stocks”.
Why This Matters
You can't work 24 hours a day - but your money can. Build the system, then let it run.
How to Stop Making Your Banker Rich (And Keep More Money)
You’re on your way up the mountain now - the next step is I - Interest-Free Living
Why Consumer Debt Is Killing You
Consumer debt = Borrowing money to buy things that don't pay you back.
Your car? Doesn't pay you.
Your vacation? Doesn't pay you.
Your new TV? Doesn't pay you.
When you use debt for these things, you're using tomorrow's income to pay for yesterday's expenses.
Now, that doesn’t mean you shouldn't buy things. But buying this you can’t afford while paying interest that drains your bank account?
This is how most Americans live - and if you live like most Americans, then you’ll end in the same financial situation as most Americans.
The Truth About 0% APR and Buy Now, Pay Later
Companies offer these because:
- You'll buy more stuff (no pain of immediate payment).
- Most people miss payments and get hit with 25%+ interest.
If you can't afford it with cash, you can't afford it.
The Rule of Five
If you can't buy five of them, you can't afford one of them.
Want a $100 shirt? Can you afford five of them ($500)? No? Then you can't afford the one shirt.
This applies to everything except necessities (housing, transportation, food).
It makes you really think about every purchase you make and ask yourself: “Do I really need this, or just want it?”
Wants vs needs are two different things - it's great to have wants. But until you can afford it, you can’t spend money on it.
Should You Pay Debt or Invest?
Answering this depends on four things:
- Risk tolerance - Paying debt = guaranteed return. Investing = potential higher return but risk.
- Financial goals - Building wealth fast? Consider Investing. Prefer security? Think about paying down debt first.
- Type of debt - Credit card at 25%? You might want to think about paying this first. Mortgage at 3%? It could make sense to invest first
- Experience - If you’re new to investing, it might make sense to pay off debt first - but if you’re more experienced, you could do both.
Obviously, do what makes sense for you and your financial situation.
Action Steps for Interest-Free Living:
- Stop using consumer debt - No more financing things that don't pay you.
- Talk to your spouse - Get on the same page about spending.
- Choose debt payoff method - Avalanche or snowball, pick one and stick with it.
- Assess your spending - Look at your financial report, find the waste
Why This Matters
Every dollar you pay in interest is a dollar that can't grow for you. Stop the bleeding before moving on to the next step.
How to Fuel Your Wealth Machine (By Earning More Money)
You’re almost to the top of the mountain! Now, it’s time to M - Multiply Your Income.
This is where things really start to accelerate.
If you can earn more money, you'll have more money to invest. Which means you'll reach your goals faster.
Create an Income-Generating Machine
Most people think they lack the tools to earn more money.
The key is creating income that's scalable - something that can make you money, without you working every minute of every day.
Examples:
- Online courses - Create once, sell forever.
- Digital products - E-books, templates, tools.
- Service businesses - Hire people to do the work.
- Rental properties - Tenants pay you monthly.
- Dividend stocks - Companies pay you quarterly.
Embrace Failure
You will fail - but think of each failure as one step closer to success.
Every failed attempt teaches you something and each failure brings you closer to what works.
Action Steps for Multiplying Income:
- Think about income changes - If you're unhappy with your income, what changes would you make?
- Create value ideas - What problems can you solve for others? People pay for solutions.
- Go fail - Try something. It's okay if it doesn't work. You'll learn what doesn't work, which brings you closer to what does.
Why This Matters
Your financial system works faster with more fuel. More income = more investing = faster wealth building.
How to Protect What You've Built (And Give Back)
Congratulations, you’ve made it! You've climbed the mountain.
Now what? You need to protect it if you want generational wealth with B - Be great.
Protect Your Assets with I-E-T
When you start building wealth, people will try to take it.
So, you need a shield.
The shield has three layers:
- Insurance - You’ll need protection with insurance - think life insurance, business insurance, or maybe even liability insurance.
- Entity - Separate your personal assets from business risks with LLCs, corporations, or trusts.
- Team - Tax advisors who do tax planning (not just filing). They can help you pay less in taxes, legally, and estate planning attorneys can help you create wills and trusts.
Tax Planning vs. Tax Filing
The tax code is a rule book, but once you know the rules, you know what you need to do in order to win.
This works by legally reducing your tax liability with these rules.
It’s not avoiding taxes - that’s illegal.
Tax planning means strategizing throughout the year. What deductions can you take? How can you structure investments to reduce taxes?
Estate Planning
When you die, your money goes somewhere.
Either to who you choose (with planning) or to who the courts decide (without planning).
Build a will, consider a trust so that your family will avoid fights over your assets when you’re gone.
Give Back
Once you build wealth, you get to choose what to do with it.
Now you get to be generous by giving back to your community.
You can finally support causes you care about and help others climb their own wealth mountain.
Because wealth isn’t just about sitting on a pile of cash - it’s about making a difference in your life, your family’s live, or the lives of others around you.
Action Steps for Being Great:
- Build your I-E-T shield - Start looking for a good tax advisor and attorney.
- Get insurance - Don't skip this step - if you haven’t built wealth yet, your family can’t afford to lose everything.
- Plan your estate - Even if you're young, start thinking about this.
Why This Matters
Building wealth is hard, but losing it is easy.
So you need to protect what you've built and then use it to make the world better.
Frequently Asked Questions About Building Generational Wealth
How much money is considered generational wealth?
There's no magic number. Generational wealth is any amount that can support your family beyond your lifetime.
For some, that's $500,000.
For others, it's $5 million. It depends on your family size, lifestyle, and goals.
How long does it take to build generational wealth?
This also depends on when you get started, how long you stick with it, and how much you invest over time.
Some can build generational wealth in just a few years, while it may take others a decade or more.
Don’t measure your behind-the-scenes to someone else’s finished product.
This is your your journey - so stick to the path you’ve made and worry less about the time and more about what you need to do to achieve your goals.
Can I build generational wealth with a normal job?
Yes - in fact, lot’s of people do!
Someone making $50,000/year who invests 15% consistently will build more wealth than someone making $200,000/year who spends it all.
What's the biggest mistake people make building wealth?
They don’t build a system.
They want to invest before they have savings. They want passive income before they control spending. You need to build a system and stick to it if you want to build wealth.
Should I pay off debt before investing?
It depends on the debt - High-interest credit card debt (20%+)?
Consider paying it off first.
Low-interest mortgage (3-4%)?
You might invest while making minimum payments. Look at interest rates, your risk tolerance, and financial goals.
How do I protect wealth from lawsuits?
The I-E-T system: Insurance, Entity, Team.
Consider different types of insurance, LLCs, or attorneys that can help you legally pay less in taxes.
What if I'm starting late (40s, 50s, 60s)?
The sooner you start, the better.
The best time to plant a tree was 20 years ago.
The second best time is today. Focus on increasing income and investing aggressively.
How much should I invest each month?
Follow the 75-15-10 rule minimum. That's 15% of your income. As you earn more or reach your savings goal, increase to 25%+. The more you invest, the faster you build wealth.
The Bottom Line on Building Generational Wealth
Generational wealth isn't about being lucky. It's not about having rich parents or having a huge salary.
It's about following a system.
Build the right mindset first.
Create your financial foundation.
Make your money work for you.
Live debt-free.
Multiply your income.
Be great by protecting what you built.
Do these six things in order, and you'll have a great chance to create wealth that lasts beyond your lifetime.
Once you have a system, how do you know what to invest in?
Our market analysts are researching new stock market opportunities every week in Market Briefs Pro.
What’s that? Our weekly investing report that shows you where smart money is moving, before the rest of the market catches on.
It tells you the specific stocks that could benefit from new shifts in the market, and gives you the research and data you need to make a smarter investment decision.
If you want to find new potential stock market investing opportunities, subscribe to Market Briefs Pro.
