Money for Tomorrow: How to Build and Protect Generational Wealth

Introduction

Wealth does not pass three generations.

The ancient Chinese proverb mentioned above is an aphorism, meant to describe the sometimes-inevitable transfer of wealth and power that would happen within dynasties. We’ve seen it happen time and again— people inherit fortunes, but somehow manage to blow it all within a few decades, or sometimes just a few years.

This economic adage addressing the longevity of multigenerational wealth has been well studied across cultures and professions. Some studies report that 70 percent of affluent people will have lost their wealth by the third generation.¹ It may sound like a myth, but this proverb has been proven true more often than not. Furthermore, it’s still applicable today. This trend has also been well documented in famous families, such as the Vanderbilts, Kluges, Hartfords, and Pulitzers, as well as with celebrities like Shia LaBeouf, Michael Jackson, MC Hammer, 50 Cent, Heidi Montag, and Nicolas Cage. You might even know someone like this.

When I first heard that proverb, the question that came to mind was Why? Why is it so difficult for people to create wealth and keep it in the family for generations? I decided to do my own research, and what I found was eye-opening.

In almost every instance where wealth has disappeared within three generations, financial literacy was the root cause. The truth is that many people simply do not have enough financial education to properly manage their wealth. All the wealth passed on by one generation quickly dissipates due to a variety of reasons: excessive spending, bad debt, bad decisions, poor investments, or simply failing to educate and empower the heirs who inherit their wealth.

We already see this coming to fruition. According to CNBC,² baby boomers have more wealth than any other generation, but their millennial children stand to inherit less. Though quite a few factors influence this, the biggest culprit is a lack of knowledge surrounding financial literacy and investments. So much bad information and marketing are disguised as advice and contribute to this problem.

American society conditions us to follow a certain life narrative. We’re often told to work hard so we can get a good education and be accepted into college (often at the cost of spending time with family and friends). Once we have a coveted college degree, our next step is to find (and keep) a good job. After that, it’s marriage and kids while putting aside a bit of money each month into a retirement account. Hopefully, we have enough saved forty years later that we can spend the last few decades of our life with our family, doing things we actually love.

What a perfect storm waiting to erode your family’s wealth. And is that truly the American dream?

The fact that you’re reading this book tells me that you want more. You’re interested in leaving a mark on the world—one that will last for multiple generations. If so, you’re in luck. It’s not too late, and you’re in the right place to learn exactly what you need to create multigenerational wealth that will benefit you and your family for generations to come.

Yes, it sounds like a lot at first. But I promise you that by the end of this book, you’ll have the skills you need to make it happen. In fact, you’ll start having aha moments within the first few chapters—that’s my guarantee to you. How can I be so sure?

Well, just a few years ago, I was exactly where you are now—thinking that once you make more money, once you close the next deal, you’ll be able to solve your problems. You see, as an investor, even though I was closing hundreds of thousands of dollars in deals each year, I still felt broke. If you’ve ever felt similarly, know that you’re not crazy—in fact, this is a common feeling I’ve heard my clients talk about.

Does any of this seem familiar to you?

I make good money at my job, but I feel broke.

I think about my finances all the time, more than I would like to.

I am afraid to overhaul my finances; I don’t even want to look at them.

I don’t have clarity on my financial goals, which makes me feel insecure.

My partner and I fight over money regularly.

I hate talking about finances; I would rather just do deals.

These feelings are completely normal and more common than you’d think. You shouldn’t feel ashamed for feeling this way either. Know that you are in good company, and I hope to help you reduce (and maybe even eliminate!) those fears. It’s difficult to master generational wealth—and experience the joys of investing—with these fears hanging over you.

Think of this process as a grand board game. It’s the multigenerational wealth game, and your winning hinges on understanding your objectives, the rules of play, and how to find your success.

The first step involves knowing your objective. You need to determine the type of life you want to live and how you want to use passive income.

Once you have your objective in mind, you shift to learning the rules of the wealth-building game. This book is broken up into four sections, which function as the pillars for your multigenerational wealth strategy. Each pillar provides a rule you can use to achieve your objective.

Last, you’ll learn how to play the game successfully. With clear objectives and rules in mind, you’ll be able to make tactical plays on the game board. These are your financial decisions, investments, and wealth-management techniques that will take you from financial stability to financial prosperity that will last generations!

Throughout the book, I will demonstrate these three concepts, which I’ve learned through hard work and trial and error. The skills I have acquired and the knowledge I have gained allow me to create wealth beyond my wildest dreams. I’ve created a foundation for my family’s future, my daughter’s future, and generations beyond. These very same principles I live my investing life by are the same principles I teach my clients through my Investor Accelerator Program at AshWealth.com. I’m excited to share them with you throughout this book.

It is my hope that you will enjoy this book as we explore how to find your objective, the rules of the multigenerational wealth game, and determine how to measure and build success. My true wish is that you go beyond this enjoyment and apply the principles laid out for you to change the trajectory of your life and create a secure future for your family for generations to come.

When you master the multigenerational wealth game, you will be an unstoppable investor (real estate or otherwise), intrapreneur, entrepreneur, partner, and family member. At the end of the day, isn’t that why we do what we do? To be the best version of ourselves for those that we love and value? You owe it to yourself and to the people you love. Let’s get started!

1Generational Wealth: Why Do 70% of Families Lose Their Wealth in the 2nd Generation? Nasdaq, October 19, 2018, https:// www .nasdaq .com /articles /generational -wealth%3A -why -do -70 -of -families -lose -their -wealth -in -the -2nd -generation -2018 -10 .

2Jessica Dickler, Booms have more wealth ‘than any other generation,’ but millenials may not inherit as much as they hope, CNBC, Dec 9, 2022, https:// www .cnbc .com /2022 /12 /09 /great -wealth -transfer -why -millennials -may -inherit -less -than -expected .html .

CHAPTER 1

What Wealth Really Means

‘Financial freedom’ is not a dirty statement. It means your lifestyle is paid for and you can focus on what you were put on this earth to do.

When I am introduced on stage at speaking events, the audience hears that I am a partner in more than $800 million worth of real estate, including over 6,500 multifamily units, 2,200-plus self-storage units, a dozen car washes, and more. I would imagine if I were in the audience’s seat, those numbers would sound impressive. But my immediate next thought would be, How on earth can I replicate that?

I’ll let you in on a little secret: When I started my wealth journey, I didn’t have a plan, nor did I know the rules of wealth building. Looking back, I really didn’t know anything—I wish I had a playbook like this to help me get started! What I did have was a strong desire to figure it out. I knew it would be up to me to make it happen. Fast-forward to today, and where I am now is the result of many years of work and many lessons learned the hard way.

How My Wealth Journey Began

It all started in 2002. my relationship had burned to the ground. I had been left with a mortgage payment on a house I couldn’t afford and no idea how I was going to make the payments each month. In addition, the house needed a full gut rehab in order to sell. I was in dire straits, but I came up with a plan: I was going to complete the rehab myself.

I stuffed the house full of roommates and did DIY renovations by getting my friends to help me and paying them in sushi, beer, and pizza. Sure, it was hard. YouTube didn’t exist back then. However, Home Depot did. I bought their Home Improvement 1-2-3 book to learn how to do all the renovations on my own. But it was rewarding work.

Eleven months later, I sold the property. I was relieved the house was off my hands, but after the dust settled and the check cleared, a light bulb went off in my head.

Not only did I manage to sell the house, but I made a significant profit on it. Because I had roommates, my living expenses were covered in full— mortgage, utilities, everything. I actually had extra money each month. In fact, I made more money on that single transaction than I was earning per year at my day job, which had me often traveling eighty hours per week. And I eliminated my personal living expenses in the process.

That first foray into real estate lit a fire in me I’ve been kindling ever since. However, I got my first reality check early. My second live-in flip didn’t go as well. I did everything I wasn’t supposed to do in real estate and managed to break even on it just before the financial crisis that started in 2008.

That didn’t stop me. I knew that there was money to be made and that flipping real estate could be wildly profitable. So, my husband and I started doing just that—moving into properties that needed a little TLC, renovating them while we lived there, and then selling them for a profit. We’re a great team, and over the next ten years, we went on to flip over $5 million in residential real estate.

But despite this, I knew something was a little off. After we sold a house, we had to be on the prowl for the next one. If we didn’t keep flipping, we could run out of money. We were pros at creating equity, but we lacked monthly reliable cash flow to feel confident enough to step away from our W-2 jobs. Even though we were moving in the right direction and building our net worth, we were still shackled by the golden handcuffs of paycheck dependence. We had more money, but our financial situation wasn’t where we wanted it to be.

After years of house hacking, rehabbing, then selling properties, a casual conversation with a friend gave me an aha moment. My friend’s million-dollar question was: Why don’t you put a tenant in it? I know it may seem like an obvious point, but I had never thought of it. My friend was right. Plus, I had housed tenants before, in my very first flip. I just didn’t see my roommates as tenants because I was living there with them.

My husband and I shifted our business model. We started flipping properties outside of our home. But instead of selling them, we turned them into rental units. The rent from each property covered the mortgage and expenses related to the home, and the extra money created a healthy cash flow for us. With reliable monthly income coming in, plus the new value of the property after renovation, we were able to refinance out most of the money we spent on the project to invest in new deals— the BRRRR strategy. Our cash flow situation really changed, and we were able to hold on to the property equity and increase our net worth.

We were on the right path—after all, our financial situation was a far cry from what it was when we first started. But it was still hard for us to hold on to our wealth. Sure, money makes you rich, but it’s what you do with that money that makes you wealthy.

On top of that, the business ate into our time, and even though our rentals were profitable, scaling them was difficult. We worked in the business as much as on it. Even though we worked with property managers to complete the work, I was still balancing loans, bookkeeping, making construction decisions, as well as finding and underwriting the next deal.

What’s the point of having money if you can’t enrich your life and the lives of those around you? We were again losing our time freedom at an alarming rate. I kept thinking to myself that there had to be another way.

When I Started Thinking About Multigenerational Wealth

As the years went by and our family started to grow, the idea of passing our wealth on started to become more of a priority to me. I wanted to create a solid foundation that would support us and the next generation of our family. I didn’t come from a family who laid a foundation for me. Money wasn’t something we discussed, and I didn’t even know what financial literacy was until I went in search of it as an adult in my thirties. I wanted to be different from the way I was raised.

That’s why I wanted to write this book—to share my story and what I’ve learned about building generational wealth.

Hope isn’t a plan. If you don’t have a plan for your time and money, someone else will—and I can promise you that it won’t end up being half as good as what you could’ve come up with on your own. Not having a plan is especially hard on the family members you left behind. In my immediate family alone, three estates have gone through probate and two estates have been passed along through trusts. Note the word estate doesn’t mean it actually has money! As a matter of fact, those combined five estates lost over $700,000 in potential wealth transfer to my generation alone. Ninety-five percent of that money could have been saved with simple financial education and planning.

Now, I know what you’re thinking: Whitney, you co-own thousands of properties. Is having an additional $700,000 really that important to you? Yes, it is. Because the real issue arises when you look at the potential growth and compounding of that money over time. That $700,000, compounded at 7 percent over 30 years, is a $5.3 million net loss to my family’s future wealth plan. A loss that simply didn’t have to happen.

My situation isn’t unique. This happens to countless families every single year. Almost everyone in my personal network has experienced something like this, and I can confidently guess that you have too.

And that, dear reader, is what this book is about. It’s about understanding the principles that will help you execute the four phases of multigenerational wealth: creating wealth, keeping wealth, investing wealth, and passing on wealth.

Of course, this all comes with a disclaimer: This book is not meant to offer financial, legal, or tax advice, and I would strongly suggest consulting with your professional team before making any major decisions. (Creating a solid team of professionals is one of the things we touch on in this book as well.) These are the things I’ve learned along the way— through experience and learning from thousands of hours of books, podcasts, workshops, seminars, and paid coaching.

I’ve set out to consolidate and simplify the principles into a workable plan, so you have a guide that you can consult as you take on this rewarding challenge. They say that the shortest distance between two points is a straight line. But what if you’re able to fold the paper in half and connect those two dots, essentially collapsing time? That’s what this book does. It collapses all the steps for you, saving you time so you don’t have to do it all on your own.

The principles contained herein have been around for millennia. They work now and will continue to work. They ignore inflation and recessions and can be applied in any economy around the world. I think of it like trying to find the exit in a dark room that’s filled with obstacles. If you flip a light switch, you’ll be able to see exactly where to go without stubbing your toe or crashing into something that could hurt you.

This book is your proverbial light switch. Once illuminated, you’ll be able to thread together the perfect path for you, one that will secure your future, the future of your family, and bring you true freedom.

Personal Symbols of Wealth

What was a symbol of wealth to you when you were growing up? For me, the symbols were having a pool, fancy cars, lots of cool toys and gadgets, and designer clothes; traveling out of the country; and going to an elite private school. I’ve had this conversation with so many of my clients, and the answers changed depending on who I asked. I’ve heard: living in a two-story house, owning a cell phone (this was before they became an extension of our bodies), and being able to take vacation abroad every year.

You probably don’t still have those same views on wealth you had as a kid. The true definition of wealth will vary based on what you value as an individual. And that’s the very first step in creating a foundation for multigenerational wealth: figuring out what being wealthy means to you.

The national conversations on wealth are changing. Financial freedom, for example, is a concept popularized by the FIRE (Financial Independence, Retire Early) community. It’s based on the idea of achieving positive cash flow from investments so you can retire early.

On the face of it, the FIRE concept seems fulfilling enough. But in my opinion, it leaves a lot to be desired. There isn’t much emphasis on building a legacy, and you’re often limited by what you can do after early retirement because the focus is on investing only to keep up with inflation, not to create multigenerational wealth. For example, you might have to move