Do you ever think about how you want to leave a legacy? Every one of us has the opportunity to empower the next generation. This blessing is as old as time and foundational to what it means to be human. After God created Adam and Eve, Genesis 1:28 says that he blessed them to “Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.”
Be fruitful and multiply. God put multiplication in your DNA. Pastor, real estate investor, and my friend Dan Dyer says, “When God creates a thing, he creates generations of a thing.” This truth is coded in your cells, and it’s evident through your ancestry. When God created you, He also considered every person you would influence, how they would go on to impact others, and so forth.
What is Generational Wealth?
So, empowering the next generation entails more than having kids (though, for some, that’s certainly a part of the equation.) When I think about multiplication, I think about investing, and investing is all about producing a return. We are always investing our time, talent, and treasure into something, whether we know it or not.
Generational wealth is the treasure chest you gift to those who come after you. Building it requires the selfless, intentional stewardship of everything you have to produce a return for the next generation. It is a gift that keeps on giving long after you are gone.
The Time Value of Everything
A concept called the Time Value of Money (TVM) can teach us a lot about how to leave a financial legacy. The TVM states that money has more value now than it does in the future because of its earning potential. In other words, the sooner I invest my money, the sooner it can accrue compounding interest.
The Rule of 72 illustrates this perfectly. Here’s how it works: divide the interest rate on your money into 72, and the answer is how long it will take your money to double.
So, time is quite literally money. At an interest rate of just five percent, your money will double in fourteen years. An interest rate of eight percent will double your money in nine years, and a rate of 12 percent will double in a short six year period.
If you start investing today, your children and grandchildren will reap the benefits. It may seem slow at first, but over time your money will continue to multiply at an accelerated rate. Building generational wealth is like planting a tree you will never eat from. However, when done correctly, it will leave a legacy that will sustain your family and community for generations to come.
The concept of time/value relates to more than money. When you invite the Holy Spirit into any situation, what you invest in will produce a return. Invest in people, and you will gain relational equity. Invest in a skill, and you will gain expertise. Consider what you want to pass on to future generations, and start investing in those areas today. Time is valuable, and compounding interest is evidence of the grace of God. We do our part, but God does immeasurably more—especially when our motivation is to love and bless the generations that come after us.
The Law of Leverage
Levers equip you to move heavy things with a minimal amount of force. Greek mathematician Archimedes famously said, “Give me a place to stand on, and I will move the Earth.” Using the principle of leverage, he invented block-and-tackle pulley systems so sailors could lift objects too heavy to be lifted with brute strength alone.
Similarly, financial leverage involves taking on ‘good debt’ to make a larger investment that will provide enough passive income to pay off the debt (and then some.) Leverage is why you can purchase a $300,000 home with just $15,000.
Every single one of us leverages something from the previous generation–wisdom, finances, spiritual legacy, etc. We stand on the foundation of those who came before us. Their ceiling is our floor. The height that the next generation will be able to reach is largely dependent on our stewardship. Being fruitful and multiplying what we have matters.
Teach the Next Generation
I recently had a conversation with a couple that understood this concept well. We were hosting a real estate roundtable with about fifteen people, and this particular couple pulled me aside and started asking questions about their portfolio. They wanted to know how much of a return they should aim for and how to manage their expenses. So, I jotted some things on a napkin, and the husband began to tell me his story.
He said his family owned approximately 900 million dollars (today, it would be over a billion) in ranches and office buildings. The wealth was split between him and his two brothers. He told me that they had way more money than they needed coming down the pipeline.
I said, “Let me stop you right there. You’ll have to help me with something–why are you here?”
He chuckled and looked at his wife. “Well, I’m here for her and my kids. We want to teach our children how to manage wealth.”
This couple had adult children, and they purchased several single-family homes as an incubator to teach them how finance worked. Ninety-nine percent of the time, the primary concern of high-net-worth individuals is how to leave their health in a place of responsible stewardship. However, you don’t have to be a millionaire for these concepts to apply to you.
Take time to consider your sphere of influence. Who is watching you, and what will you pass on to them? There is no shortage of financial wisdom in the Bible, and how we steward our resources is paramount. The sooner you learn these lessons, the sooner you can teach and impart them to the next generation. Here’s the cool part about investing–it’s most challenging initially, but it’s much easier once you create the system. The next generation will be able to leverage your hard work and learn from your mistakes. Consider the Rule of 72– if you gain financial wisdom and teach your children, how much more will your grandchildren’s children inherit?
How to Empower the Next Generation
We have two great opportunities for you to empower the next generation. Do you want to learn biblical, financial wisdom that you can implement and pass down to your sphere of influence? If so, The WealthBuilders Conference is for you. Join us February 17-19th in Denver, Colorado, for a power-packed weekend full of sessions and workshops on business, investing, real estate, and leadership. You can learn more about the event here and save $100 on your ticket for a limited time.
We also have an opportunity for you to partner directly with us as we invest in the next generation. At WealthBuilders, our goal is to teach people how to make money so that they can make a difference. Our partners financially support the creation and distribution of faith-based financial content to every continent in the United States. If that excites you as it does us, you can learn more about our partnership program here.