Build Generational Wealth From Scratch: Four Pillars and the Family Pressure That Comes With It

NerdWallet's Smart Money Podcast

Financial advisor India Elliott joins hosts Sean Pyles and Elizabeth Ayoola to break down how first-generation earners can build and protect generational

Key takeaways

• India Elliott defines generational wealth as passing down freedom of opportunity and decision-making to children, grandchildren, and beyond.
• Her four pillars for building wealth are earn, manage, protect, and grow, with education serving as the critical foundation.

Main topics

• Generational wealth definition
• Four pillars of wealth building

Notable quotes

"Wealth in the terms that I will speak to it can be defined as money used to create freedom in whatever capacity and whatever freedom looks like to you."

Conclusion

The episode delivers a practical, mindset-driven roadmap for first-generation wealth builders to secure their

Transcript preview

Speaker 2 (0:00) Being the first person in your family to build wealth can be challenging, but it can also be rewarding. Today, we're going to be learning about how to build generational wealth and the tools that you need to get there. Speaker 1 (0:14) Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles. And Speaker 2 (0:21) I'm still Elizabeth Ayola. Now, we're answering listener questions today, thank you to everyone who sent them, about generational wealth. Don't forget, while we're here and while we have you, to send any money questions that you might have, whether it's about building wealth or how to work through mental roadblocks that you have with finances, whatever your question is, we want to hear it. And in case you don't know where to send it, send it to podcast at NerdWallet. And Speaker 1 (0:44) to help us answer these questions about generational wealth today, we have India Elliott, a financial advisor at Wells Fargo Advisors. India, welcome to Smart Money. Thank Speaker 4 (0:52) you. Thanks for having me. Speaker 1 (0:54) Okay, Speaker 2 (0:54) so for listeners and viewers, we are on YouTube, who missed it during a summer episode, I actually mentioned going to Chicago, which is now one of my favorite cities in the world. And I attended the Women's Impact Initiative Network Conference, which is hosted by the Association of African American Financial Advisors. And there I met the lovely India. Now during this episode that you guys may have missed, I asked you guys to send in any questions that you had around generational wealth, and you sent them and India's here actually to help us answer those. questions. Speaker 1 (1:24) Let's start, India, with a really basic question. That is, what is actually generational wealth and how does it differ from other kinds of wealth, just regular wealth as we might think about it? Speaker 4 (1:34) That's interesting because wealth in general can be defined differently by different people. And so wealth in the terms that I will speak to it can be defined as money used to create freedom in whatever capacity and whatever. freedom looks like to you. So freedom in time, freedom and opportunity, freedom and decision making is what I would define as wealth when money can achieve that. And then when you add generational to wealth, we are now talking about that freedom of opportunity, that freedom of decision making that can pass down literally to the next generation, whether it be your children, Speaker 2 (2:17) your grandchildren and beyond. Now, India, do you define yourself as a first generation wealth builder? I Speaker 4 (2:23) actually do. Yes. I have not come from a lineage of where financial wealth has been passed down. Maybe wealth in other terms like wisdom or culture. But money has not been something that's been passed down generationally. I will say my grandparents, my parents have made some. really amazing decisions with their money and have put themselves in a great place. And maybe they will begin the trickle down of generational wealth when they pass on. But as for me, where I am in my journey, I would still consider myself a first generational wealth builder. I'm Speaker 1 (3:01) curious about your journey, India. How did you begin to build wealth in this way that your family hadn't previously? Speaker 4 (3:06) It's been such just a random journey for me. I actually... studied journalism in college, and I thought I would be doing something similar to what you all are doing today. But I found myself graduating and working in finance. And so I started off at a brokerage firm and began to learn all about money, all about investing, all about wealth in general. And then I coupled that with some things that my parents had done. I had grew up seeing my parents meet with their financial advisor. once or twice a year. And so I started connecting those dots. And while I thought I was just getting a job for the time being in finance, it grew into a passion for me and it really transformed my mind and showed me that there's some tools and there's some knowledge. that I Speaker 2 (3:57) now have that can really change my life for the better. So would you say getting started in India is maybe first about setting that knowledge foundation and learning as much as you can about how to build wealth and just finances generally? Speaker 4 (4:09) Absolutely, because you don't know what you don't know. I like to joke and say when I started in the finance industry as a stockbroker, I couldn't even spell the word stock. Like I knew nothing. It was, I took one math class in college. This was not anywhere on my radar. So I went into a world knowing nothing and then my eyes were opened. And so I would say, yes, start with education. Start with familiarizing yourself with terms and strategies. Just kind of soak in the knowledge first. Application will come next. Speaker 2 (4:45) Well, if you had to list out a couple of wealth building pillars, I know you've kind of mentioned some now. Let's say you had to pick, I don't know, four. What would they be? I Speaker 4 (4:54) do have four pillars that I actually live by and preach every day on my job. The first I will say is earn. You have to earn. You can't do anything if you don't have money. I meet with people every day and they say, where do I start? Start with your earning ability. Earn as much as you can. Secondly, manage. Now that you're earning money, you have to properly allocate that money to where it needs to go. Pay your bills, pay down your debt, start a savings fund for yourself. Make good decisions with what you already have to maintain. Third is protect. Now that you're at a place where you're earning and you're stable, you're maintaining, you have to do things to protect what you have. already before you can go any further. Protection looks like insurance. Protection looks like trust, estate plans, will. Those are ways to protect what you have, where you're at. And fourth, the final pillar would be grow. From there, you're ready to reach new heights. Take what you have and start exponentially growing. Speaker 1 (6:05) All right. It sounds like actually a really well-rounded strategy that anyone could apply. Speaker 4 (6:08) It's really simple. We think wealth is this fancy term used for people that are not like us because all those people have money and I don't and I can't be a part of those conversations. But it's not true. If you can manage what you do have and decide to make simple decisions with what you have, you will only increase from there. Yeah, I'm a living testament. Speaker 2 (6:31) All right. Do we want to hop into the first money question now, India, so that you can help us answer the listeners questions? So Sean is going to read this one. Let's do it. Speaker 1 (6:38) All right, yeah, here it is. It came from a listener's text message. Here we go. They wrote, Speaker 1 (7:04) Two of us are the first in the family to go to college. While all this change is super exciting, I'm also curious how to begin building real wealth for both myself and my family. All right, India, what do you think about Graham's situation? Speaker 4 (7:15) I love the fact that he's saying he broke the curse, right? Just by simply moving out of a small town. I come from a small town too, Marion, Indiana, moved to Kokomo, Indiana. They're both very small towns. And sometimes you can feel trapped and you can feel like... All the money people are somewhere out in L.A. and New York and Chicago. And as long as I'm in this small town, I will always be small. And that can be true. Your mindset can be limited by your surroundings. So kudos to him for at least taking a step to get out and change his environment and to expand his mind and understanding of things beyond a small town. And Speaker 1 (7:56) it seems like if they aren't already, Graham could apply those four pillars that you laid out around, you know. earning more money, protecting what you have, expanding what you are investing just to build a life of true financial wealth. Speaker 4 (8:08) Yeah, as we know, larger cities, you tend to earn more. So there's the first check right there. Hopefully he's making good decisions, managing that money once you make it. And then from there, protect and grow as someone like myself, a financial advisor can step in. You don't have to know those two parts. We help you protect and we help you grow.