Generational Wealth for Healthcare Professionals

After talking with some friends who work in professional careers about personal finance struggles, I noticed a recurring theme that appeared with those who were first or second generation residents in their new homeland. They were interested in acquiring assets to pass on within their family. This leads us to generational wealth for busy professionals!

This is something that never occurred to me being in my 30’s and several generations down from the first generation in my family who settled here. However, after listening to their desires and intentions, I become energized and interested in learning the ins and outs of generational wealth.

What is generational wealth?

Generational wealth is wealth or assets such as real estate, stocks, or businesses that are acquired then passed onto the next generation.

You might be thinking, generational wealth is not a priority for me right now or I need a better financial foundation before venturing off into acquiring real estate or businesses. Don’t worry! Personal Finance for Healthcare Professionals is a great place to learn about both building a financial foundation and allocating money to work for you. 

Before we dive into how to build and acquire generational wealth, let’s start with how not to lose what wealth we may already have to pass on.

The importance of financial literacy = generational wealth

It’s reported that 70% of wealthy families lose their wealth by the second generation and a shocking 90% by the third generation! Think about that for a moment. The legacy that you worked so hard for and passed on will nearly be gone by the time it gets to your grandkids. Yikes!

The reasons for this:

  • Generations are taught not to talk about money
  • 78% of the previous generation feel the next generation is not financially responsible enough and will become lazy and entitled 
  • Most have no idea about the value of money or how to handle it

These statistics all point to the importance of teaching financial literacy to our children and especially grandkids. Where the second generation may remember some of the sacrifices, hard work, and struggles from the financial goals achieved by the first generation, the third generation does not see the sacrifices and disciplines required by the first generation to acquire this generational wealth. Check out our How to Teach Our Children Financial Responsibility post!

The results of parents not talking with their kids about their wealth and what happens when they are gone, likely result in unnecessary taxes, costly estate fees, or family conflicts.   

Ways to prevent deterioration of generational wealth:

  1. Grow communication about wealth: preparing the next generation for what to expect with the passing of generational wealth through teachings and discovering shared values and passions among family members. These discussions may best be facilitated by wealth experts or advisors.
  2. Include the next generation in decision making: This will help members understand how the wealth needs to be managed. Instead of assigning beneficiaries to be in charge of management assets they have no prior knowledge about. Including members in the decision progress builds trust, helps establish core values, and family goals with the continual passing of generational wealth. 
  3. Third party trustee: It may be beneficial to have a third party trustee to help ensure wealth is managed properly freeing decisions solely on emotional attachments some members may have over certain intangible assets preventing litigation among family members.
  4. Create a plan: create a will, trust, and or estate plan and share the decisions you have made and reasons why. Gettins as specific as possible in your plan will prevent any ambiguity with your intentions leaving opportunity for differences between family members to develop. 

Stock market

If you are looking to build wealth over the long term and make your money work for you then investing in the stock market is a great place to start. 

Investing in the stock market may sound scary, but it is an important way to build wealth in your lifetime and pass on to your family. 

Warren Buffet, known as the best investor of all time, has repeated that low cost index investing is the best way to invest for the average investor with the least amount of effort. 

Real Estate

Real estate has the potential to both provide a steady cash flow and increase in value over time. Both look promising to build wealth to pass on to your children. 

If you do not have time to manage tenants and the responsibilities of being a landlord, then property management is an option or crowdfund investing.

Crowdfunding offers investors to become shareholders in a company, or in this case, in a real estate property. 

Popular crowdfunding sites:



Although I have not jumped on the real estate band wagon yet, here is another finance blogger, Paula, who does an excellent job sharing her real estate adventures.  

Build Your Own Business

Owning your own business can be very rewarding on many levels. Having the potential of infinitely more income than your hourly rate, being your own boss working for yourself, and doing something that you are passionate about and enjoy all sounds like wins in my book. 

If you start or have a business and your children’s business interest, goals, and values align with your own then this may be something to pass on to your children. Getting your kids involved at a young age will help them understand how the business operates and one day how to successfully manage it.

If no child has interest in the business, then ensuring the company is managed well with a portion of profits going to children is a way to pass wealth down generations. Or you may consider selling the business to fund other forms of generational wealth.

Investing in your child’s education

The average 2019 student debt was nearly $29,000 putting our children in a poor financial position before they even start their careers.

A great way to start our kids on the right financial path is teaching them financial literacy and creating investments early that will pay for their education.

Having a daughter who will probably go to college outside the U.S., I was concerned about the best way to save for her education and wanted to choose the best investment option combining great growth, best tax treatment, and minimum fees. 

What I found fit this criteria was a 529b account which provides tax advantages that other options such as a custodial investment account for your children do not. 

To make things easier, we have created a 2 part video series for learning about 529 accounts and opening 529 accounts. These videos are located in a playlist here!

Why custodial accounts may not be the best vehicle for saving for our children’s future

The 529 tax advantage.

  • Most states allow you to deduct your 529 contributions on your state income tax return. 
  • Your investment earnings are deferred from federal and often state taxes.
  • You will not be taxed on withdrawals if the withdrawals are used for qualified educational expenses.

As long as the educational institution of choice is eligible for Title IV federal student aid, then 529 funds can be used at these locations. This includes over 400 institutions outside of the United States.

To look up institutions click here!

For more information about 529 accounts from brokerages refer below:

Vanguard 529 plan

Fidelity 529 plan


After you have a financial foundation, refer to Personal Finance Guide for Healthcare Professionals, decide which assets, examples listed above, are best to invest in for you and your family to start building generational wealth. 

Once you start building these assets, you will want to protect them by creating a plan to pass them onto the next generation. As mentioned above in more detail, The importance of financial literacy = generational wealth, this plan could include a will, trust, or estate plan, and beneficiaries to your account with open transparent discussion with the next generations making clear your intentions. 

Further engagement with family may be required depending on the assets being passed. Such as further discussion about family wealth goals, values, and asset education may be essential to ensuring the family wealth will be handled with care for generations to come.

How have you passed on generational wealth in your family?

Disclaimer: Financial decisions you make are yours alone at your own risk. Rehab Rebels holds no responsibility nor liability for your financial decisions. Refer to full Disclaimers & Terms and Conditions for more details.

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