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The term ‘generational wealth’ isn’t something that often comes up in discussions of financial prudence, but it definitely should. The main problem when discussing generational wealth is that you don’t directly benefit from it in your lifetime, but your future generations do. And in today’s world of immediate gratification, most people don’t want to plan that far into the future.

Acquiring and retaining wealth over time is a difficult job as many economic factors can impact an individual’s income and expenses in any generation. But the benefit of generational wealth is that if done properly, your successors can find themselves in the top 5% of their generation’s most financially successful people.

If this concept interests you and you want to know more, here’s a basic rundown of the rules of acquiring and retaining wealth long-term.

The Rules of Real Wealth

No matter the generational differences, there are a couple of rules to building wealth that has been universally applicable since the dawn of civilization. The first rule is not spending more than necessary and avoiding as much luxury as possible. If you’re the first generation in your family’s generational wealth plan, your job is to accrue as much money and assets as possible.

This can be done in many ways including creating a fixed deposit account, using buy now pay later apps, saving money on shopping by using discount offers as much as possible, and sticking to more cost saving habits. So if possible, create another revenue stream aside from your main job. If you splurge and spend money on luxuries, it will be very difficult for the next generation to build wealth on what you accrued.

The second rule is to expand on the first generation’s accrued wealth. It’s then the responsibility of the following generations to use the wealth you’ve accrued and expand it by using it to set up multiple income streams and other financial investments that passively accrue value over time, such as bank accounts that provide high-interest rates on deposits.

Passing It On

Most financially successful people commonly agreed on stock markets and foreign exchanges as the most effective sources of passive income. Other options include investing in up-and-coming companies, technology, and businesses that allow for shareholders.

The third rule to building generational wealth is to retain what you’ve earned across multiple generations. Keeping the spirit of the first generation alive across multiple generations is undoubtedly the most difficult part of the plan. Usually, the second and third generations of wealthy families become too busy spending what the previous generation accrued.

This results in more expenses than income which can seriously drain a family’s finances. One needs to remember that money continuously loses value over generations, so without significant effort being put in to balance out the expenses, a generational wealth plan becomes a disaster.

Stand the Test of Time

For your family’s financial legacy to stand the test of time, wealth-building’s progression must be continuous and organic. Some of the richest families all across the globe are the results of generational wealth building. People like Jeff Bezos or Elon Musk, who achieved huge successes during their lifetime, are more the exception than examples, so you need to think realistically.

Building wealth takes time, and it takes insight and strategic planning to take advantage of investments that might not necessarily pay off immediately but will do so in the future, possibly decades down the road. Basically, you’re hedging all your bets and putting all your effort into a plan that might not succeed in your lifetime.

Creating a strong family bond and passing down your values to your children, who in turn will pass those values down to their children, is very important in all of this planning. This means you need to successfully raise your children properly to naturally and organically build on your family legacy. Each family member must not think individually but rather as a whole unit.

All of this might sound a bit intimidating at first, but over time with careful planning and strategy, you can gradually implement all of these tips and ensure your legacy stands tall a few generations down the line.

Leaving a Better Future

Building generational wealth might not seem appealing given the time and effort required, but it’s the most tried and tested wealth-building method in human history. If you’re willing to walk the extra mile, you yourself can live a successful and productive while leaving a better future for the next generation. So if you want to do just that, start working on your own generational wealth-building plan ASAP.

These days, many wealthy people are buying their citizenship in locations where it is easy for them to preserve their wealth. There are actually numerous countries that allow what is called an immigrant investor program. These programs are set up by the countries’ governments in order to bring wealthy people into their ranks, and benefit from those people.

Countries with Immigrant Investor Programs

Countries like Cyprus, Spain, Malta and Australia have these programs. It is likely that in the future, more and more countries are going to begin implementing these types of programs. Especially as more countries are feeling the strain of the global financial crisis. This can help energize their economies. The most popular locations are in Europe, the Caribbean, and the Mediterranean.

An example of this type of program can be found in Malta. Their program is called the Malta Citizenship by Investment Programme. This program grants ‘naturalization by investment to reputable individuals and their dependents, after a rigid and thorough due diligence processes that make a significant contribution to the social and economic development of the country.’ What are the benefits? After five years of buying property in Malta, this will be tax exempt on sale. There is also no inheritance or death taxes, no estate duty, no net worth or wealth taxes and no municipal taxes, rates or real estate taxes. Dual citizenship is also available.

The examples above for Malta are just the tip of the iceberg when it comes to the benefits for the wealthy related to immigrant investor programs. These programs are specifically aimed at the very wealthy. The investments required can range from $500,000 to several million dollars. For those that do make this kind of investment, this is a very small amount. In Europe, Bulgaria requires a $700,000 investment in government bonds for five years, whereas in the Caribbean, St. Kitts& Nevis requires a $400,000 investment in real estate or the sugar industry.

Why are the wealthy investing in new citizenship in this manner?

So if the investment is minor for these investors, then what makes them want to participate in this type of investing? The main reason for doing this is the tax benefits. The super rich are always looking for ways to keep their money out of the hands of their government, and hold onto as much of it as they can. In this instance, the countries offering these programs, like the ones mentioned above, offer lower income taxes, and, more importantly, inheritance taxes.

There are other incentives as well. These include:

• Access to better education
• A desire to escape political instability or disagreement
• Better passport or visa-free travel to more countries, especially those in Europe as part of the European Union
• Higher standards of living
• Tax advantages

There are even some of the very rich who try to avoid taxes altogether by bouncing between countries around the globe with different citizenships and residence permits.

Who are these extremely wealthy people making this type of investment?

Those who are gaining citizenship through investment are from all over the world. Generally, many of these wealthy are from the Middle East, India, South Africa and China.

So how can the not-so-wealthy take advantage of these programs?

There are a few countries that do not require as large of an investment, like Bulgaria, in order to invest in citizenship, but gain all of the benefits. Dominica, for example, is the most inexpensive deal. With only an investment of $100,000 plus some fees, citizenship can be bought. Even St. Kitts and Nevis has a cheaper program than the $400,000 mentioned above. For only $25000, you can make a non-refundable donation to the St. Kitts & Nevis Sugar Industry Diversification Foundation to get access to citizenship.

There are also many countries that offer citizenship for an investment below one million US dollars. These include Malta, Portugal, and other EU countries where you can also gain all the benefits of the EU. Of late, citizenship by investment in Malta is gaining popularity due to various benefits. Moving and living in Malta has become so popular also due to the economic boom there is on the island

The least expensive of them all may be Latvia, where with a five-year residency costs merely $96,000. The benefits associated with this program include a common visa policy shared by twenty six European countries, but there is no telling how long this deal will last.

More countries are now offering this type of Immigrant Investor Program to help their economies bring the wealthy, and not so super wealthy, into their citizenship.