Rethinking generational wealth

January 02, 2026

When I hear generational wealth mentioned, there is a certain image that I get in my head. Private jets, multiple houses, and never having to think about what something costs. There is probably a staff consisting of landscapers, housekeepers, nannies, lawyers, and accountants just to name a few. It is what I think about when I think of how the ultra-wealthy live their lives. With this image in mind, how do we actually define generational wealth?

I am sure there are many definitions, but Investopedia defines generational wealth as "...generational wealth refers to financial assets passed from one generation of a family to another". That makes sense to me. It is one thing for someone to make a lot of money and spend it all, but that wouldn't be generational wealth. Money needs to survive past a single generation. After all, it is in the name! If you poll people though, it's not as simple as passing down a small sum of money in an inheritance. Looking at this thread on Reddit, you can see that the general consensus is that the amount of money needed to be "generational" is enough to retire as soon as you get access to that money. This lines up with the image I have in my head.

Now that is a fair definition, but the problem I have with it is that it is not achievable for 99% of the population. Very few families will be in this situation. But I like to create goals and work towards them, so I like to define generational wealth closer to that of the Investopedia definition and hopefully people can start to think about it that way too.

You may not be able to give your children an estate that has tens of millions of dollars for them to retire with, but you can give them money for tuition. If tens of thousands of dollars for tuition is too much, maybe you can give them a few grand toward their first house. If a few grand for a first house is too much, then maybe you can let them live with you when they graduate so that they can pay off loans, save for a home/apartment, or maybe both. Generational wealth shouldn't be thought of solely as an option for the ultra-wealthy and there are many ways to set up future generations for greater financial success.

The power of investing is compound interest. Ten thousand dollars invested for 30 years with a 6% return gets you ~$57,000. That is pretty powerful if you make that investment at 30 years old for your retirement. But that same investment for 60 years is ~$329,000! A one-time investment when a child is born leads to a large sum of money for their retirement. Little things like this can lay the foundation for generational wealth and are very achievable.

I recognize that not everybody values generational wealth the same. Many people may want to spend the money on themselves which is perfectly okay! You did work hard to save it, there is nothing wrong with enjoying the money too. My only hope is that we can all think a little looser about the definition of generational wealth and think of it as something you can work toward should you choose to.