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American baby boomers are expected to pass on an astronomical $84 trillion in inheritances to their heirs over the next 20 years in what’s being dubbed “the great wealth transfer.”
However, offering monetary gifts to adult kids can be tricky. On the one hand, many parents likely want to do everything they can to provide their kids an advantage in this inhospitable economy. On the flip side, some may worry whether their kids are ready for such a sudden influx of wealth.
A caller on The Ramsey Show was grappling with this exact dilemma. He told personal finance guru Dave Ramsey that he wanted to “gift” his childhood home to his 18-year-old son — but he wasn’t sure if it was a “bad idea.” Ramsey was surprisingly open to the idea, albeit with a few caveats.
“Yeah I’d give it to him,” Ramsey confirmed after listening to the caller speak highly of his son. “But I’d put some terms on it,” he added, suggesting that the caller’s son should have solid plans for his life beyond owning a home.
In the U.S., 65% of parents admitted to providing some sort of financial assistance to their adult kids between the ages of 22 and 40, according to a USA Today study.
The great wealth transfer is a situation that experts say could reset a historic divide when it comes to personal finance and homeownership for younger generations. Those who receive an early inheritance passed down by their parents during their lifetime — like the caller’s son — are some of the first beneficiaries of this transfer. It’s expected to make millennials the richest generation in American history.
If you are among the lucky inheritors of generational wealth in the form of a gifted home, Ramsey recommends that you consider any maintenance or renovations the property may need in the future — and to set aside money for that.
If you’re looking to grow your savings even more, Advisor.com offers a more convenient way to find and connect with qualified advisors who can help you plan for a wealth transfer from your parents, including inheriting a home.
With some basic info about your wealth goals, time horizons and risk tolerance, Advisor.com will connect you to a broad network of wealth professionals who specialize in financial planning, investment management, and tax advice.
If you’re not expecting to inherit a home, there are other ways to take advantage of the hot real estate market without having to buy a house or make an enormous down payment.
Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 A.M. tenant calls.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually.
Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.
Getting started is a quick and easy process. With a minimum investment of $250, you can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest in the properties of your choice in as little as 30 seconds.
While some platforms have democratized real estate investing by lowering entry barriers, those seeking larger-scale, institutional-quality commercial property investments often require a different approach.
For accredited investors with a higher risk tolerance and investment horizon, there are ways you can tap into the potentially higher returns of commercial real estate.
First National Realty Partners (FNRP) focuses on properties leased by industry-leading tenants such as Whole Foods, CVS, Kroger, and Walmart.
FNRP offers investors the opportunity to own a piece of essential retail infrastructure, with an experienced team that oversees every facet of the investment process, from property acquisition to leasing and property management.
Leveraging proprietary technology and a deep understanding of the market, FNRP has the potential to deliver exceptional returns while maintaining the highest standards of investment performance.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
