How to Create Multi-Generational Wealth
By: Derick Van Ness
Tags: Financial Planning, Rockefeller Family, Wealth Creation, Wealth Management, Banks

In a year when some estimate that 74% of Americans are living paycheck to paycheck, many don’t even feel like they can get their heads above water long enough to build wealth for the next generation.

But it is possible, and you can do it. There’s a foolproof tool that families like the Rockefellers have used to hand down wealth for six generations or more.

They’ve set up a system in which money gets passed onto a generation, that generation gets to use that money, and then the money gets put back into the family so the family can continue to grow wealth.

1. Create a trust

This is often an estate planning trust. The sum of money usually comes from one of these sources:

Life insurance death benefit

Sale of property

Sale of businesses

Gradual funding during the life of the person who created the trust

2. Purchase life insurance policies on all heirs

The trust purchases types of life insurance policies that are specially designed to build cash. As each child grows up, that money builds up safely, in a tax-advantaged way, and earns a guaranteed rate of return.

By the time these kids are 18, 19, 20, or 21, they have money to buy a car, go to school, get married, or maybe even start their first business! The kids are taught how to use this account like a banking system.

3. Interest goes back to your family instead of to the bank

When they make a large purchase but pay the money back into the life insurance policy, they can recapture the interest that would have been paid to the bank.

Imagine: All that interest you’ve paid out to banks over your lifetime — credit cards, mortgages, car loans — what if that went back to your pockets instead? What if you had it in an account growing consistently over the course of your entire life?

4. The system protects generations to come

With most families, the wealth is gone by the third generation. The grandkids never saw Grandpa earn the money. They only saw the lifestyle Mom and Dad got, so they don’t know how to steward that wealth. This system provides a safeguard.

A real-life example

Because the trust owns the insurance policy, let’s say Child 1 gets married, uses some of the money, then gets a divorce. Let’s say their spouse wants to take half. Well, Child 1 doesn’t own that policy — the trust does! The child gets to benefit from it, but they have to go to the trust and ask permission for their purchases. It’s like having an eternal rich uncle who will always lend you money for the things you need.

It’s like having an eternal rich uncle who will always lend you money for the things you need.

This system also protects Child 1 if they file bankruptcy or have creditors come after them, and it keeps them from spending all the money on drugs or gambling because the money has been designated for specific purchases that will help them improve their lives — like homes, businesses, education, and cars.

The idea is to empower them to do anything they want to with their life — except nothing.

They can do whatever they want to with their life — except waste it.

You don’t have to be a finance guru or have an extreme risk tolerance to build lasting wealth for your family. Just use this one safe, guaranteed strategy that the wealthiest families have known for decades.