important part of the puzzle; after all, it happens by default — if you have no plan and happen to have a large some of money at your death, you’ve left the resources, for better or worse. Is it for the better? That depends com- pletely on how well you prepared the recipient. Think of gasoline, simply a resource that can be used for good (fuel in a cargo plane bringing food to the needy) or evil (fuel for an arsonist to destroy an enemy’s property). The difference is education, stewardship, and motivation of the new owner of those resources. Successful business owners throughout history have clearly demonstrated that if you have the knowledge and drive, you can lose the money and other assets and quickly build them back. In con- trast, thousands of lottery winners and unprepared descendants of first-generation wealth have demon - strated that receiving assets with- out education almost guarantees they will end up bankrupt in a short time. While financial education is the most important and most forgotten element to achieving generational wealth, it is only useful after the first generation has grown and held onto money and assets. Following are tools to grow and retain assets. GROWING FINANCIALASSETS – THEACT OF SAVING. The first principal to accept is the value of delayed gratification or spending less than you earn. It sounds simple enough, yet most of us know without consistent focus, making it a habit and automating it, few will be successful long term. Many will focus on how to reduce spending, and this can be effec- tive for a while, yet like dieting it is seldom effective long term. All the abundantly minded individuals I sur-
round myself with focus on increas- ing income instead. In his book, Heads I Win, Tails You Lose, Patrick Donohoe introduces the next important step in a concept called Hierarchy of Wealth where he illustrates what successful business owners and investors have experi- enced throughout history but what is also ignored by market-focused financial advisors in America today. The key to successfully growing wealth with investments is to keep the risk of losing the funds as low as possible. You achieve that by focus - ing the money where you have the highest control like improving your own skills, your businesses, and your directly owned rental properties. RETAINING FINANCIAL ASSETS – THEACT OF PROTECTING. For most financially successful families, annual income taxes and death (estate) taxes rob the family of all wealth in just 2-3 generations. The lack of knowledge and prudent planning to protect hard-earned dollars from annual income tax is the largest risk to retaining family wealth. Today the estate tax risk is only discussed by ultra-wealthy fam- ilies, yet the nearly $25M exemption for couples’ estates is frequently under attack and is set to automat- ically reduce in 2026. Generational wealth families like the Rockefellers and, so far, the Waltons avoid these tax traps by storing and efficiently growing their assets where they are permanently protected from taxes. A foundational component to this is private family banks. In a previ- ous article, I described this strategy often called “infinite banking” that uses a uniquely designed cash value whole life insurance policy to earn uninterrupted compound interest in
a private, tax-advantaged account earning well above bank rates. It has been a cornerstone of finances for successful families since the begin- ning of America and is used similarly across the globe. It also provides the vital structure for teaching future generations about the concept of family banking, the stewardship of family assets for generations. CONCLUSION Growing and holding onto wealth requires continual focus and unique tax-efficient tools to be successful for generations. The funds must consis- tently grow to outpace inflation and be protected from the lethal impact of taxes, including while they are sit- ting in cash as reserves and in prepa- ration for the next investment — wealthy families use infinite banking to achieve this. Once families become successful at limiting the impact of annual taxes, they must also prepare for death taxes at each generation — tax free death benefit from the infinite banking policies is again the solution. Take a deeper look at this 200-year proven approach to growing perpetual wealth. •
Gary Pinkerton is a wealth strategist, military veteran, entrepreneur, speaker, best-selling author and real estate investor. He has degrees in engineering
from the US Naval Academy (BS) and the University of Illinois (MS), commanded the attack submarine USS TUCSON in his 25 years as a Navy nuclear submarine officer, was a Pentagon division director for the Joint Chiefs, and a senior ethics professor at the Naval Academy before retiring as a Captain. Gary has extensive experience designing, owning, and helping others implement high cash value life insurance, real estate, and alternative investments. He is passionate about furthering entrepreneurship and helping American families achieve financial dreams, establish a lasting financial legacy, and reduce taxes. He lives in Florida with his wife, Sue and their two sons.
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