I’m sure you heard of the Walton family, which has a net worth of more than $238 billion, the Mars family owns Mars Candy Company with a net worth of $142 billion, the Koch family with $124 billion, the Hermès Family with $112 billion, the Saudi Royal Family with more than $1.4 trillion, and the list can go on and on. Those are few of many families that have managed to acquire enough wealth to passed on to the next generations. They didn’t achieve this amount of wealth by having a regular mindset. They had to think and act differently.
In this article we are going to reveal things that you can do to change your financial situation for the better.
First, what is Generation Poverty?
Generation Poverty is when a low-income family passes their poverty to their children. When that happens, the children tend to pass it on to the next generation since that is what mom and dad taught them. I was born in Africa, and everything around me was poverty. People used to defecate outside, the water wasn’t clean, and people had to walk for miles to fetch water, did not have enough food, schools weren’t as good, and worst of all, it was hard to sit in the classroom while thinking that we might not have lunch or dinner tonight.
When my family relocated to the United States of America through the Refugee resettlement program, I realized that there was another life. I never thought we weren't rich when I was in Africa because everyone around me was poor. so, I thought that was how life was supposed to be, especially for Africans in Africa. But, when I moved to the United States and saw how other people live, something woke in me, and I started to learn different ways to make money until I had enough confidence to start my own business and left my 9 to 5.
In this article, I will inform you how you can escape the poverty mindset and how you can create wealth to pass on to your offspring.
1. Invest in yourself.
The best investment anyone can make is to invest in themselves. You can lose money, but you cannot lose what you know. If you lose the money but still have the knowledge, you can make that money faster than you did before because you are starting from experience.
There are many ways you can invest in yourself. You can attend school and take the classes you need to gain financial and personal growth knowledge. If you are not a fan of going to school, you can read books and articles like the one you are reading right now, listen to YouTube videos and podcasts, attend seminars, and do other things that might help you improve yourself. To be clear, you will have to keep learning to stay ahead in your industry or profession.
2. Change your circle of friends.
Be honest with yourself. When you look through your friends’ list, what do you see? Are they helping you grow? Are they holding you back? Do you see them as good role models? Do you look up to them? These questions will help you determine whether your friends are worth keeping or if it is time to start making new friends that can help you grow financially and mentally. You can fool people and yourself. But you can lie to yourself all you want but once the reality kicks in, that's when you will know how much influence your friends have on you. You should always check whether your friends are helping you or dragging you down.
When you hang around broke people, you are likelier to be broke because you are the average of 5 people you spend your precious time with. To break the generational poverty in the family, you must take the challenging route by leaving your friends, bad habits, family members that hold you back, and other things that you think are not helping you to become the person you want to be.
3. Start A Side hustle
Whether you have a job or don’t have a job, you need to start a side hustle as soon as possible. Every business you can think of in the world, began as a habit. If you have something you enjoy doing, find a way to make money on it. It doesn’t matter how much money you make from it because it is your extra cash.
4. Open a Limited Liability Company (register Your Side Hustle)
You might ask yourself; do I need a registered company to generate wealth? The answer is Yes. Ownership is a powerful tool for wealth creation and power in the society. Let me ask you a quick question. Have you seen a wealthy person who doesn’t have an LLC or some other form of company? if you know one, let me know in the comment section.
Wealthy people understand the power of ownership. If you own a company, banks and authorities start to see you differently because now you are the CEO of your company. When you own a company, banks trust you more than if you were an individual. Have you ever tried to ask for a loan from your bank and see how they treat you? But if you are a business owner, they treat you as a business. That increases your chances of getting a loan and it helps with reducing your tax bill since you can claim every expense you spend on the business.
The power of ownership is vital. It can turn an individual with a criminal record into a respectable a business mogul. For instance, Let’s say a person returned from jail and now has a criminal record. If he lives a normal life, the authority will always see him as a criminal and worthless person. However, on the other hand, if he owns a business and registers all his cars and other assets under his business name, every time police type his car’s license plate in their system, it will come up under his company’s name. This will tell them that you are a good citizen who owns a business that contributes to the country’s economy instead of seeing you as a criminal and worthless. Always remember that ownership is the greatest weapon to win in life.
5. Invest in Stock and Cryptocurrency
When you invest in a stock, you buy a piece of an established company. When the company’s stock price increases, the value of your investment increases. In the United States stock market history, the S&P500, an ETF that tracks the best 500 companies in the United States, goes up 8% yearly. This means that your initial investment can go up at least 8% per year as long as your money stays invested. If your LLC generates more cash and invests a big chunk of it in the S&P500, you can pass on the stocks to your family as generation wealth, and if you educate and raise your children well, they can pass it on to the next generation too.
I’m sure that you have heard of bitcoin and cryptocurrency. Cryptocurrency is digital money that is held on the blockchain. It is decentralized since the central bank or government does not regulate it. Bitcoin and other cryptocurrency projects such as Ethereum, Cardan, Polygon, Solana, and other Cryptocurrencies are the new class of assets. It is recommended to do a throughout research before investing in the cryptocurrency because they don’t have enough data to see how they have performed in the past. The whole cryptocurrency market is just speculation for now, making it riskier than investing in the stock market.
However, if you are old enough to remember when the internet was new in the early 2000’s people called it risky. Today, the internet is the best thing that have happened to the financial and political world. The moral of this example is that the blockchain is the internet of the internet. I believe that some cryptocurrencies will go bankrupt ten years from now. However, the ones with the strong case of use will be massive, and people who are investing in them now will be happy that they did. Please do a lot of research before investing your hard-earned money in cryptocurrency. After the collapse of FTX, Terra Luna Classic, Voyer Digital, Celsius Network and others, it showed that you can lose your money in the blink of an eye. Remember, the higher the risk, the bigger the return.
6. Invest in the Real Estate
Most wealthy people own single homes and apartment buildings. Real Estate is one of the most profitable businesses anyone can get in. The best thing about starting a real estate investment is that banks are willing to give you the money as long as you have a job or other income that proves you can pay the mortgage's monthly bill on time.
Once you have the real estate assets, you can hire a real estate management company to take care of them. Once you put your house under management company, they do everything for you. Including finding tenants, evict, collect rent, and send you a check every month. However, you still have to check on your houses or apartments every once in the while to make sure your investments are in the good condition. Real Estate and the Stock market are a form of passive income because once purchase a house or stock of a company, you sit and collect checks monthly or quarterly in the form of dividends. To be clear, there is no such thing as a 100% passive income because you still have to do little work to ensure that your assets are going well.
Inconclusion
Generation poverty is not a curse. It is a mindset and lack of information. Many people are smart, but they are poor because of the environment they live in. Traveling around and seeing how other people live is always recommended because that is the only way you can learn how to improve yourself. Just remember, Generation wealth is not something that comes overnight. It requires patience, discipline, and time. So, what do you think about this article? Let me know in the comments.
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