Think About Your Future Like Members of The Upper-Middle Class

The people most likely to build “generational wealth” are not those who set out to make, save, and invest money solely for that purpose.  The people most likely to create inheritable wealth are those who set out to build secure and comfortable lives for themselves and their immediate family.

The Two Groups of Workers

Excluding those who possess inherited wealth, most people work to earn money to live and survive in this world.  (The money they earn covers housing, nutrition, transportation, education, and other costs.)  Only a small percentage of workers manage to accumulate enough money or assets to bequeath to their children or grandchildren after they die. Of that smaller group of people, the accumulation of “generational wealth” is not intentional.  It is the result of those people accumulating money to stave off (potential) life risks.

The Distinguishing Thoughts

Much like Maslow’s hierarchy of needs, there is a hierarchy of risks or threats to your existence and quality of life.  (The battle to provide food, clothing, shelter, and transportation is the first level.)  Second level threats include health issues, legal troubles, financial hardships, and relationship problems.  Rather than living life thinking that everything will work out well, the more cautious people among us spend considerable time thinking about the likelihood and impact of these hardships on their life, should they occur.

The goal for this lot is to have money at the ready to fund retirement, personal long-term care, care of aging parents, home repairs, car repairs, job loss, natural disasters, unexpected lawsuits, funerals, and or unfavorable health diagnosis.  These people understand that ignoring these risks can turn their status from fine to flat broke in a short period of time.  Consequently, they work smarter to earn more and spend less.

The Way Forward

To better our chances of creating what is called “generational wealth”, we must focus on our personal survival and the survival of our immediate family.  That is, work to cover our basic needs, unexpected risks, and future wants.  Here are some of the things you may find when adopting this method of thinking:

1. You are reasonably prepared to fend off the “unexpected”.
2. You may end up with a surplus of assets available after your death.  (The “unexpected” may not occur.)
3. You increase the likelihood of living with dignity in your older age.
4. You learn that the prudent few are not ultra-greedy…they are ultra-sensitive to human frailties.

What do you think?