4 Things to do if you want generational wealth
4 things to do if you want generational wealth. Eliminate consumer debt, cut your expenses, increase your income and invest the rest in income generating assets.
Eliminate consumer debt
You may want to eliminate your consumer debt. Your money is going to end up either one someone else bucket or your bucket. Using your money to buy stuff that are not assets is not a good idea. I am referring to bad debt. I am referring to liabilities.
It is ok to have good debt, because you are buying asset that generate you income.
Cut your expenses
You may want to cut off your expenses when ever you able to. You can call you internet company and negotiate a discount. Or you can live on a cheaper house or apartment. Or you can pay a cheaper cell phone monthly bill, You may cook more at home, you may buy things in bulk, Etc.
Increase your income
You may want to increate your income. with more income you are going to be able to invest even more. you can start a side hustle like a blog, YouTube channel, podcast that generate you recurring income 24/7. You can also do freelance work that generate you active income.
Invest in income generating assets
You may want to invest into income generating assets. Such as qualified dividend Growth investing.
Taxes changes every year, lets look at 2021
In 2021, If you were single and your only yearly income of $40,400 or less was coming from qualified dividend growth investing. Your federal income tax would be 0. This is because in 2021 the long term capital gain tax rates is 0 for single earing within $0 – $40,400 qualify income.
On qualify dividend growth investing it appears that there is no social security tax, no Medicaid tax, and possibly no State tax depending on the state.
In 2021, if you were single and your day job yearly wage income was $40,400 then your total federal income tax for that year would be around $3,146. But it does not end there, you may has to pay social security tax, Medicaid tax, and possibly State tax.
Now, start and adjust as you go.