Building Generational Wealth

One thing I did when my daughter went to school, was renovate my basement.  My goal was to generate another stream of income, increase my property value and help someone have a safe affordable place to live.  At the time, I was not thinking I was building generational wealth.  The renovated basement is now a safe affordable place for my daughter to reside as she has completed her degree and is back home.   Although I haven’t looked at the cost of apartments in years, I know that that the cost is extreme to me.  Rent is more than I pay for a mortgage.  I remember paying $700 per month with all utilities included in 1999 when I had my daughter (and that may be high as I can’t really remember).  My apartment also had a washer and dryer.  According to https://ipropertymanagement.com/research/average-rent-by-year the apartment rentals increased 8.85 percent since 1980. 

 My daughter is back home, she was blessed to find a job after completing college, she has been able to continue her independence by residing in the studio apartment.  One of the things I say to parents is to establish boundaries; I will write about that later.  However, for now, I will share that my daughter does pay rent.  Staying with the theme of building generational wealth; the plan is to yes use some of the rent for the household but also save a portion of the rent to gift to her when she decides to move out of our home.  Sssshhh, she doesn’t know that part.  My hope is that she stays in our home as long as possible, continue her educational goals and save money.   My hope is that when she decides to move that she is ready to purchase property.  If I save $250 per month of the rent, she pays over 12 months will be $3,000. If I take that money and put it in a high yielding account, her money will make money.  At minimum at $3,000 over 3 years will provide $9,000 not taking into consideration the dividends from the high yielding account.  Disclaimer, I am not a financial expert, please consult someone or do your own research. I am sure I don’t have to convince you how making my basement into a studio apartment is helping my family build generational wealth, so if you can consider the option. 

I do know that everyone may not be able to do the same thing I have to build generational wealth, there are other ways to build wealth.  Some other things to explore are investing, real estate, opening a business, life insurance, protecting assets by setting up a trust and have a will, which are some ideas.