Father-son financial advisors say their most successful clients practice 4 smart habits to pass wealth to their kids
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- Gerald Grant Jr. and Gerald Grant III are financial advisors in Miami and coauthors of a new book about building generational wealth.
- They specialize in wealth management, estate planning, business succession planning, and retirement planning.
- They said their most successful clients practice four habits: They prioritize savings, spend less than they earn, continually learn, and invest their money for growth.
- This article is part of "Money That Lasts," an ongoing series about generational wealth from Personal Finance Insider.
- SmartAsset's free tool can find a financial planner to help you take control of your money »
Gerald Grant III was 12 years old when he read the personal-finance classic "The Richest Man in Babylon."
His father, Gerald Grant Jr., had offered his daughter $100 to read the book and write an essay about how she'd implement the lessons, and Grant III wanted in on the deal.
"It's funny because as a young kid, I was just doing it for a hundred dollars," Grant III told Business Insider. Only later did he realize that those principles for building wealth would apply so crucially to his life and career, he said.
Grant III and Grant Jr. are financial advisors at Equitable Advisors in Miami. They are also coauthors of the new book "The Power of Generational Wealth: It's More Than Just Dollars and Cents," where they explain how families can build a legacy of prosperity.
The father-son advisors say there are at least four smart habits their most successful clients practice to create generational wealth.
1. Pay yourself first
You have to build wealth in order to pass it on to the next generation. The most straightforward strategy for doing that is by paying yourself first, Grant Jr. said.
Like any habit it takes great discipline, but eventually becomes second nature if you're consistent, he said.
"Many of my clients are Christians, so they understand the concept of tithing," Grant Jr. said. "So if you put away 10% of every dollar, every time you contribute to the church you make the same contribution to yourself. That's how you really, really accumulate wealth."
Put another way, it's the choice to save a portion of your income before allotting any cash to non-essential expenses.
"Without accumulating assets and growing them, there is no wealth and without being able to reciprocate this process, there is no generational wealth," they write in the book.
2. Live below your means
Spending less than you earn is another tenet of wealth building. In essence, this means following a budget so you're controlling your spending, not merely aware of it, Grant Jr. said.
"You must be able to identify that if you make X, you can only spend Y if there's to be something left over to build Z," they write in the book.
Grant Jr. said they often ask their clients to create a short wishlist of big-ticket items or experiences they really want. If they come across something that isn't on the list, they probably shouldn't buy it.
"You actually buy the things you really want instead of just accumulating things, and that's how you make your money last," Grant Jr. said.
Grant III said it's ultimately about getting comfortable with delayed gratification.
"We live in a consumer-driven society, so there's always a reason to spend money," he said. But understanding what's at stake in the future — and that you don't have to give up everything to enjoy life now — is key.
3. Never stop learning
Wealth and success can breed complacency, Grant Jr. and Grant III write in the book, and the best antidote is knowledge.
"If you stay curious and continuously learn, you will continue to elevate yourself in multiple facets of life," they write. Being a lifelong learner is empowering for yourself, those around you, and future generations because it enables you to make the most of the wealth-building tools at your disposal, they said.
Research agrees. Financial planner and author Thomas C. Corley studied the habits of over 170 self-made millionaires and discovered that 88% of them "devote thirty minutes or more each day to self-education or self-improvement reading" and that "most did not read for entertainment."
"The rich read to acquire or maintain knowledge," he wrote in his book "Change Your Habits, Change Your Life."
4. Make your money work for you
There are smarter ways to build and sustain wealth than working a 9-to-5 and socking away a percentage of your salary.
"Working hard and saving is a great way to build your foundation, but that alone won't build generational wealth," they write. You have to invest your money to make it grow, whether by starting a business, buying stocks, or owning real estate.
Most important of all, they said, you have to teach the next generation how to do it, too. As Grant III puts it, you wouldn't give your kid a brand-new shiny car without teaching them how to drive and maintain it. The same goes for inheritance.
"You can teach your children these practices at a young age because whether you have hundreds, thousands or millions, the same concepts apply," they write.
SmartAsset's free tool can find a financial planner to help you take control of your money »
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