What is Generational Wealth & Who Has Access to It?

by Angelica Imhoede

Generational wealth? What is that? How do you get that, and where does it come from? These were all questions I asked when I first heard the term in college. After doing a little research, I realized there was more to this concept of generational wealth.

History of Generational Wealth in America

Let’s see, where shall we start? Generational wealth was once referred to as “old money.” In most societies, there were the bourgeois, the affluent, and the wealthy upper class. These people had wealth that had been passed down from generation to generation. They would inherit things like land, property, gold, and other material items of value.

Then there was everyone else. The rest of the people were often lower class or poor. At this point in time, there was no middle class. In fact, the concept of the middle class didn’t emerge until the 18th century. Why? Land was no longer the only source of wealth. The 18th century introduced the Industrial Revolution, which brought about significant change for the lower class. Trading goods and manufacturing became very common, and people took advantage of the open market by creating businesses based on the products they made.

With the emergence of the middle class, the term old money (now known as generational wealth) began to materialize in the wealth-building process. Every day, middle-class people could build businesses and acquire property and assets. These people would often have inheritances or trusts for their descendants and pass them on generation after generation.

This follows the same concepts of today. As someone most interested in creating a legacy for my child(ren), I’ve often thought about what it would take and what it would mean.

Modern Generational Wealth

You see, we live in a time where you actually can get access to information at your fingertips. I would still like to preface this by noting that race and ethnicity play considerable roles in how easily generational wealth is obtained. We’ve seen situations, especially in the United States, where all races have not been able to prosper in the same way, if at all, due to discrimination and racism. Luckily, we have seen a push within the last 20 years across all underrepresented groups to increase their wealth. This push is supported by the implementation of more policies and regulations around equality.

A few months ago, I created an Instagram post about how America’s median income increased for all races between 2018 and 2019.

  • ‚Ā£Asian Median Income¬†increased to $97,174 in 2019 from $87,194 in 2018, an increase of $9,980.¬†
  • White Median Income¬†increase to $76,057 in 2019 from $70,642 in 2018, an increase of $5,415.¬†
  • Hispanic Median Income¬†increased to $56,113 in 2019 from $51,450 in 2018, an increase of 4,663.¬†
  • Black Median Income¬†increased to $45,438 in 2019 from $41,511 in 2018, an increase of $3,627.

This averages out to $68,700 across all ethnic groups. Of course, more can be done, specifically for the Hispanic and Black communities.

However, it still helps provide an overall picture. Wealth is still trending up, and thus more wealth creation is being generated across minority groups than ever before.

That takes us to our steps on how to build generational wealth, no matter who you are. Let me break it down into five primary steps!

1. Owning Assets

An asset is an item of material that appreciates over time. Examples include investments, inventory, real estate, land, business, paintings, etc. Owning an appreciating item such as the previously listed items will help grow your wealth over time. You can also pass it down in your will or estate once you die.  

The easiest way to do this: Buy a house or property. Owning real estate creates value because property generally appreciates over time. We live in an age of record low interest rates, so if you can, buy now. 

2. Investing  

You can invest in many different items these days. Examples include stock, real estate, gold, mutual funds, ETFs, etc. Like most things, investing comes with risks that everyone should be mindful of when participating. However, with the S&P 500 out-performing any savings rate, you are more than likely to make money. Also, diversifying your assets will help safeguard against the risks. 

The easiest way to do this: First, save for retirement by investing in IRA, ROTH, 401K, or 403B. People underestimate a consistent contribution to retirement accounts. Consistent contributions create millionaires every day.

3. Estate Planning

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As mentioned in #1, planning is essential if something happens. You want to¬†have a will¬†and¬†insurance¬†left for loved ones. I’ve had family members die in the last few years, and only two had life insurance policies. It’s a must, especially if you know the people you leave behind will be worse upon your death. It’s essential to consider your options, whether term or whole life insurance. Something is better than nothing!

The easiest way to do this: Sign up for term life insurance or full life insurance online. It takes a few minutes to do and provides a safety net in case something happens.

4. Getting rid of debt

Debt is a hindrance; there’s no way around it. As someone who has paid off credit cards and personal lines of credit before, I would say that debt prevents you from building your wealth.¬†

Remember, total assets minus total liabilities equals your net worth. 

If liabilities exceed your assets, you have a negative net worth. I wouldn’t necessarily recommend dumping all your money into paying off debt. Always create an¬†emergency fund¬†first and then proceed with debt pay-off. Life happens, and you don’t want to find yourself in a worse position than before because you didn’t have money for an emergency.

The easiest way to do this: Pay consumer debt, credit cards, personal loans, or car notes. Those high-interest rates are more competitive than any investment or savings rate. You are losing money in the long run if you don’t prioritize paying it off because of the rate of inflation.¬†

5. Starting a business or side hustle

Creating multiple income streams is critical in building wealth. Whether it’s a YouTube page, selling shirts, or flipping houses on the side, that additional income helps expedite wealth-building. Not to mention, if one of your income sources fails, you have another to fall back on.¬†

The easiest way to do this: Find something that you enjoy that makes money. Then, do it consistently. Anything worth having is worth working toward.

Anything you do in life takes consistency and dedication.

Like I’ve always said, I’m big on generational wealth. I want everyone to participate in that. It will be easier for some people to reach this milestone and much harder for others. However, please don’t give up; keep going. It’s essential to be financially sustainable in a capitalistic society because, as we’ve all learned in a crisis, the government may only give you a $600 stimulus check and say, “Good luck!”

Related Reads:

Free Downloadable Guide to Managing Debt

Create Your Will Now, Online

Do You Really Need Life Insurance?

Best Finance Books for Growing Wealth


Meet Angelica Imhoede, creator of Financial Lioness, a platform dedicated to advocating generational wealth and bringing insight to financial literacy. Having spent the last decade in banking and financial services, Angelica created her platform to bring awareness to the wealth gap in America and the inequalities that come with systemic racism in the financial sector. She spends a lot of her time online creating and publishing digital content related to all topics covered under personal finance.
She recently published her first e-book, Investing for the Everyday Investor, a step-by-step guide of investing for everyday people to learn the foundation of investing.


Angelica is a native of Minneapolis, Minnesota, where she currently resides with her husband and son. She attended the University of St. Thomas and received a degree in finance. She’s currently obtaining her Masters in Data Science. She loves cooking, dancing, and spending time with her family.
You can always catch her online on her IG page at Financial Lioness or her website.

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