I’m a Financial Advisor: 3 Signs You’re Building Generational Wealth

Every time you check your savings or review your investments, you’re making sure you’re on track to meet your financial goals — whether that means buying a home, retiring early or staying prepared for emergencies. But even with smart money moves, you might wonder: is your wealth strategy built to last?

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You Have a Well-Defined Plan You Invest for Long-Term Growth You Have an Estate Plan

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Building lasting wealth isn’t just about earning more; it’s about protecting your future, your loved ones and your legacy for generations to come. Here are three signs you’re on the right path.

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You Have a Well-Defined Plan

According to John Jones, investment advisor representative at Heritage Financial, many people focus too much on individual financial products like stocks, mutual funds or business interests without considering how they work together. To build lasting wealth and a strong financial legacy, you need a comprehensive plan that aligns all these elements in your best interest.

“To me, looking into products before a plan is like putting the cart before the horse,” Jones said. “Once a plan is in place, then we have direction to reach the client goal, whether that be retirement planning, tax efficiency or leaving a lasting legacy.”

Having an investment manager, or at least a well-rounded financial plan, helps ensure you’re not just achieving your short-term goals, but also considering the long-term impact on your loved ones after you’re gone.

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You Invest for Long-Term Growth

As you develop your investment strategy, you should be factoring in all the standard wisdom about savvy investing, like diversifying your portfolio. Adam Hamilton, CEO of REI Hub, encouraged people to focus on assets that reliably appreciate over time, emphasizing that real estate is considered one of the best types of investment for building generational wealth.

Whether you’re buying or selling stocks, a key rule of thumb is to avoid fixating on the hot stock of the moment. Instead, prioritize stable, long-term assets that can consistently support your financial goals and legacy.

You Have an Estate Plan

Estate planning is essential for ensuring your loved ones are provided for after you’re gone. Or, as Jones put it, “What good is creating wealth if it doesn’t go to whom you want it to, or follow the rules you’d like it to?” According to him, your estate plan should be able to answer two questions: Who do you want to get specific assets? What are the rules associated with receiving those assets?

Jones also pointed out that one of the most often overlooked aspects of legacy planning involves providing for surviving spouses in addition to leaving assets for beneficiaries. He’s seen income decrease and taxes increase for surviving spouses — on top of the emotional burden of grieving their partner. As you develop your estate plan, you should pay attention to minimizing the tax burdens for your family.

“For individuals with a net worth above the lifetime exemption amount, which can differ depending on the year and your state, estate tax becomes a consideration and should be considered and anticipated long before the time of passing,” he said.

He gives the example of someone inheriting a $1 million IRA, which, based on the current law, must be liquidated at the end of 10 years. While some heirs are as financially prudent as you are, others might not plan accordingly and could end up taking a lump-sum taxable distribution that pushes them into a higher tax bracket.

Odds are, you’re already working with a financial advisor. But if you’ve added an estate planner to your financial all-star team — and you’re discussing how to minimize the tax burden for your beneficiaries — you’re making great strides toward generational wealth.

Caitlyn Moorhead contributed to the reporting for this article.

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