Watching Your Wallet: Building generational wealth

FRESNO, Calif. (KFSN) -- Multigenerational households are becoming more common in America.

While finances are among some of the hardest things to discuss among family members, investing in your future can help you take care of yourself and those closest to you.

"Generational wealth is something you build for your loved ones and family members," says Charah Coleman, founder and Financial Wellness Program Manager of the UC Merced Financial Wellness Center. "It actually doesn't have to be passed on when you pass away. It can be something you can grow while you're living."

Think of it as assets or resources you'll be handing off to your loved ones.

Coleman says in addition to property or land that can generate income, there are retirement investment accounts you can set up for your kids with their earned income, including a custodial Roth IRA.

This after-tax account allows earned income to grow tax-free.

"It can grow exponentially because we know the younger you are or the earlier you invest, the more you have potential of earning income on that compound interest," Coleman said.

Consider diversifying investments.

"As economies go up and down, you'll be able to weather the storm a lot better if you have diversified assets," Coleman said.

Coleman says you don't have to be a millionaire to build generational wealth. It starts with modeling good financial behavior for your kids.

"It does resonate throughout families and generations when you do that, when you talk to kids about money, when you have those conversations to de-stigmatize money," Coleman said.

Coleman also mentioned taking advantage of potential investment matching opportunities from your employer.

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