How to Build Generational Wealth Through Hiring Your Child
Making financial decisions is not always easy. Many people struggle to follow through on the decisions they make from day one. For example, hundreds of thousands fail to keep up with the goal of saving a certain amount of money per month. The number one reason for struggling like this is lack of clarity. People are not clear about their end goals. For example, why are you saving $100 each month? Is it because someone told you to do so? Or are you doing it because your boyfriend is also doing it? As such, the first step is to have that clear goal in mind so that everything else falls in place in an orderly manner. In this article, I, therefore, want us to be clear about two things. First, it is what you must do, which is hiring your child, and secondly, to know why you must do it, which is building generational wealth. From the above, what you need to do is to “hire your child,” and the reason why you need to do it, which is to “build generational wealth.” So, we are clear about what needs to be done and why. Having those two things in mind helps you understand this article better. You can hire your child if you run an LLC, Sole proprietor or if both parents are partners in a Partnership.
Why hiring your child?
I understand that many people still believe that children cannot be exposed to a work environment. If you tell that to a billion-dollar family, they will laugh their lungs out. However, I am not here to laugh at anyone but to educate you so that we all are on the same page, geared for financial growth. So, why hiring your child? Right from the start, when you hire your child, it must help your family build generational wealth. It is the number one tax strategy that the Trump administration blessed us with. It’s easy to implement and can result in tens of thousands more saved from taxes. I do not know of another way of creating more income and keeping it in your family like this. Below, I will explain how hiring your child helps you build generational wealth.
How does hiring your child helps you build generational wealth?
Generational wealth is all about the wealth you pass down from your kids to grandkids and their grandkids. So, for there to be wealth to be passed down, it must be created first. Everyone can do it. This is not only for the billionaires you read about in the news every day. Therefore, how will hiring your child help you build generational wealth?
1. It helps you start building up, from $1
When climbing up the ladder, you start from the bottom step. Similarly, when building a million-dollar reserve fund, you start by setting aside the smallest amount you can and start building on that. Some people can afford to start by a thousand dollars, others can afford a hundred dollars, and others ten dollars. All these figures do not matter. What is important is that you start the building process. And here, I am saying begin by paying your child. Therefore, when you hire your child, two things will happen. First, the employed child earns a salary, and secondly, not only you now has money to save, but your child, too, has it. Instead of it being a one-horserace towards the goal, suddenly, your family has two or more horses going for the same price – generational wealth. How does this all work? Well, your child is allowed to open their own savings account and start contributing. They can also start contributing to their Roth IRA and save money tax-free. If you start them very young, by age 30, they will have enough money to start being a serious investor in the stock market. In their forties, they can even become a millionaire and start growing towards serious wealth that can be left for generations to come. But remember, it all begins by hiring your child now. If you feel burning to do it and are confused about how to go about it, do not worry, I have an excellent course coming up just for you. It is called the How to Hire your Child Masterclass. Head over to this page and read more about it, and sign-up.
2. It helps you shape your child’s mindset
After hiring your child, they see how the business runs, and they learn to be responsible with their money, including how to invest some of it for future use or buying investments. Growing a person’s net worth from zero to billions is not an easy game. It takes a lot of discipline, decisiveness, and business acumen. When you hire your child, they will gain all these qualities. With these qualities and hundreds of thousands saved up in their Roth IRA well before retirement, your child can do wonders in business. Also, do not forget about your own business. As your child grows up, you are also growing older, meaning they will also have it to run, expand and safeguard your family’s net worth. This, too, requires a steady mindset.
3. Succession planning
Finally, there is no generational wealth if there’s no successor to take over the management side when you are gone. I touched a bit on this above, but here, I tell you how succession planning works. Whenever there is a plan for someone to succeed a current leader, there is a lot of training that goes into it for years. The best way to train the child, in this case, is if they are walking side-by-side with you in the business, learning how everything works. More so, succession planning is all about safeguarding the family’s philosophy or way of doing things and taking care of everyone in the family. Now, that requires a lot of discipline that you can teach your child if you hire them. Do not forget to head over to this page and read more about my upcoming How to Hire Your Child Masterclass and sign-up. It is what you need to start building generational wealth.
People have also asked the following questions
1. What are the Tax Benefits of Hiring Your Children? There are two main tax benefits of hiring your child. 1. Their salary is not subject to social security, Medicare, and FUTA taxes. 2. You can deduct their salary as a business expense. 2. Why It’s Tax-Smart to Hire Your Children? Hiring your children does not only result in tax savings but the money you save is kept in the family. For example, if you pay one child $12,550 in 2021, that will be a full tax deduction, but the money remains in the family through your child. 3. Is Hiring Your Child as an Employee a Good Idea? Yes, this is a great idea! 4. What Are The Risks Of Hiring Your Child? There are no known risks of hiring your children. In fact, hiring them results in several tax benefits and other benefits, such as them learning how to run a business at a young age. 5. What are the benefits of generational wealth? Generational wealth removes poverty from your family and protects your future decedents from the lack of money. 6. What is the definition of generational wealth? Generational wealth is wealth/assets passed down from generation to generation (in the same family) without losing their value.