Building Generational Wealth Is All About Your Kids
Some years back, I used to work in my dad’s office, and I was very young then. We were in Washington, DC, and I must say that not many things were pleasing about me. For example, this was in an impoverished, predominantly African American community. I saw firsthand the struggles that people go through. The struggles were part of my life too – perhaps, until a time when generational wealth became a subject of interest.
Having been working with my dad, that was the time when I started my own generational wealth journey. For him, he was also playing a part in something that could end flourishing when my kids are older. This means that this kind of wealth is focused on kids you have now, as well as theirs in future.
Looking at the above, it is clear that, being a business person, you can’t just work alone for your kids. But you fulfil the generational wealth conundrum by helping your kids become business minded too. If they can’t be like that, how are they going to sustain the wealth you build today? Only their business acumen and financial discipline will ensure that there is generational wealth some 30 years down the line. In short, you build generational wealth while working with them.
Kiddipreneurs and the generational wealth conundrum
After saying all the above, it makes sense to bring the subject of kiddipreneurs. This is a word used to describe kids that become entrepreneurs. I brought them in this article to show you that generational wealth is not only about hiring them. But goes beyond them using the set of skills they learn while working in their parents’ business to build their own.
Therefore, as you hire your children, make sure to steer them towards business leadership and entrepreneurship. These are the qualities they will use to grow and sustain generational wealth.
I know, many could wonder if it is possible for kids to start businesses. I say that it is totally possible. “My name is Hannah Grace and I’m 12 years old. I love using health and beauty products and I love making them too!” This is the message you get on the homepage of BeYOUtiful, Hannah’s bath bomb business website. She is only twelve years old, but has been in business for a couple of years now.
From her story, I discovered that she was challenged by her father to make the things she loved. And, by mentioning her father, I am reminded of the role that parents play in helping their children become millionaires. Even if we are to say Hannah’s dad did not own a business to hire her, he helped her develop an entrepreneurial mindset. And we don’t know how much business acumen she is still learning from him.
So, by hiring your children, you want them to run a bigger business in future. That bigger business they will be running is the one that creates more generational wealth.
How can parents help their children become millionaires?
First, you got to learn how to hire them. This, you can do through learning from a tax practitioner or accountant. The purpose of going through an accountant is so that they tell you what tax benefits you stand to get. They tell you how to avoid payroll taxes legally.
Secondly, once you start saving money from tax, you now have something to reinvest in the business – so, that helps you grow YOUR current business. The child can inherit it later when it grows. That is another part of building generational wealth.
Still on this, there is the money that you pay your kid. Teach her to save this money since that young age. We spoke about various means of doing so in the previous How to Hire Your Child Masterclass. For those that did not attend, the replay is available for purchase.
In terms of her saving her earnings, the IRS allows her to invest up to $6,000 per annum. Now, this is a lot of money, especially if you teach them when they are still under the age of ten. The money grows to something amazing after 50 or so years.
Therefore, think about it this way; there is now the business you grew through tax savings from the IRS. And there is also her money that she invested over all these years. These two, combined, gives her an amazing shift in her net worth. With all this money, she can invest in real estate, stock market, or expand the family business, opening up new branches. That is how you build generational wealth.
Thirdly, besides all things money, tax breaks, and so forth, part of generational wealth building involves learning. When you hire your child, you show her many things about the business. Every task you let her do is a learning curve. Importantly, you also show her how to work with teams since that young age.
Besides the above, your child also learns how to handle her finances since that young age. I know someone that does not own a business but always gives her kids some money so that they know how to own it. Some people just get all over the place whenever they get money in their hands. So, as soon as your kids start earning, they will learn to own money and make good decisions with it. When the time comes for them to enhance wealth accumulation, they will do it responsibly.
Therefore, the conclusion to this matter is that as a business owner, all your decisions must be about the child. By running that business, you already started something, and to take it to millions, you will need someone to carry on the load. Therefore, the best way to ensure that someone is available when needed is to hire your child. And, hiring them must be done lawfully.
Ps. Watch out for our upcoming “Business Taxes for Kids”. Coming this Black Friday.