ALBANY, Ga. (WALB) - Generational wealth is often misunderstood as simply being rich, but it’s more about creating systems that last beyond a lifetime.

Kent Patrick with Bush Wealth Management said the term doesn’t mean being wealthy in the traditional sense.

“What it really means is creating financial systems that you can have in place to pass down to the next generation that will set them up for success,” Patrick said. “If your kids have to start financially at zero, it’s going to be very hard for them to get ahead in life.”

One key difference is understanding income versus true wealth. Income is salary, bonuses, or commissions, but building wealth also includes owning assets such as real estate, investment portfolios, or businesses.

“Income would be salary, bonus, commissions. That’s great. We all have to live off of that, but it’s not really going to serve the next generation,” Patrick said. “Building wealth includes owning assets such as real estate, investment portfolios, maybe intellectual property, maybe even real estate or other businesses.”

Patrick said families should focus on assets that produce income without requiring active work.

“I would start with the investment piece. That would be an investment portfolio. The sooner you can start, the better,” he said. “I would also look at real estate, any type of asset that can produce income without you having to actually show up and work a job.”

Building wealth isn’t just about money. It’s also about education. Patrick said financial literacy is the foundation for generational wealth.

“Ultimately, if you don’t start with financial literacy, no one’s really going to know what to do,” he said. “So investing early, avoiding lifestyle inflation, understanding taxes and understanding how you actually own a business or operate a business. All of those habits that you can pass down will really help the next generation.”

One of the biggest barriers is not talking about finances at all.

“The biggest barrier is not talking about it,” Patrick said. “The older generation a lot of times doesn’t like to necessarily talk about money. The families that get ahead the most are the ones who actually talk about it.”

Patrick said families who discuss finances openly put everything on the table and let children and grandchildren ask questions. They pass down values and explain financial decisions made over decades.

“If you can have a conversation, that’s really going to put you in the step in the right direction,” he said.

Patrick said taxes, poor planning, and a lack of communication destroy most wealth.

“If we could fix those and right the ship, generational wealth would be a much more common term that we talk about,” he said.

For those looking to get started, Patrick recommends four steps:

First, invest consistently. Set up automatic monthly transfers into a savings account to help your money grow.

Second, focus on ownership, such as real estate or businesses.

Third, structure taxes to limit the amount that goes to the government.

Fourth, teach the next generation by explaining financial decisions and systems.

“If you could hit those four bullet steps or bullet points, it would be a monumental feat as far as generational wealth,” Patrick said.

Starting early and having open conversations can make all the difference when it comes to building wealth that lasts.

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