Building wealth is not about having a bigger house, a better car or the fanciest vacations. It is about having enough money to pay your bills and sustain a desired lifestyle, even during personal or widespread financial instability. Financial cushions help weather unexpected financial emergencies or setbacks, reducing stress levels and improving quality of life.

Wealth-building provides financial stability while ensuring lifestyle maintenance and financial independence during retirement. It also supports philanthropy through donations and volunteering, the pursuit of further education, and other entrepreneurial endeavors.

Perhaps one of the most important impacts of wealth building is the ability to leave a legacy for your children by passing on assets from one generation to the next for their continued financial security – this is called generational wealth.

Building generational wealth is essential to economically empowering Black, Indigenous and People of Color (BIPOC) communities. For centuries, systemic racism and discrimination have limited opportunities for BIPOC communities to accumulate wealth, leading to a significant gap in finances compared to white families. According to the Federal Reserve, the average net worth of a white family in the U.S. is 10 times that of the average net worth of a Black family. Fortunately, there are opportunities for BIPOC communities to build generational wealth.

How is wealth determined?

“Wealth can be defined in terms of the accumulation of assets – cash, and other things that people invest in like real estate, insurance, stocks, bonds, valuables, etc.,” says Stephen Spears, senior vice president of Twin Cities community banking at Bremer Bank.

Accumulated wealth can be calculated by subtracting liabilities from their assets. Liabilities include expenses like mortgages, credit card and tax debt, student loans, and other financial obligations.

What is generational wealth?

“Generational wealth is the ability for someone to pass their accumulated assets down from one generation to the next, setting succeeding generations up for success. It means not depleting all accumulated assets in a single generation or family,” Spears says.

Homeownership is one of the most common ways to pass on wealth. Other passed-down assets can include financial investments, businesses, valuables and cash savings.

The median net worth for white families is almost seven times that of Black families and 3.5 times that of Hispanic families. Spears notes how the impact of rapidly widening disparities in wealth and income can be challenging to process.

“Wherever you may be sitting in your journey of increased income and wealth, it feels like more people are getting to the next level faster, and that can be very discouraging” he says.

Historically, generational wealth has been more prevalent among certain groups, particularly white families. The wealth gap between white and Black families exists due to challenging factors, including income inequality, limited access to quality education and college, and a long history of housing discrimination and other systematic forms of discrimination.

However, generational wealth is not limited to any one group. People and families from all backgrounds can accumulate and pass down wealth to future generations through sound financial planning.

Steps to building generational wealth

Living frugally while saving and investing early and consistently can make a significant difference in your journey of building generational wealth.

“You can develop generational wealth through a saver’s mentality,” Spears explains.

The following are steps to take to build wealth, regardless of your income level or financial situation.

Consistent income

To start saving, you first need to consistently earn enough money to cover your necessities, including housing, utilities, food and health care. If you do not currently have consistent income, it may be worth furthering your education or gaining new skills to increase your income potential.

Monitor your spending

Spending more money than you have on items and experiences is easier to do than it may originally seem. By tracking your spending, you can identify where your dollars are going and potential areas for improvement.

Proactively save

Once you have a steady stream of income and understand where it’s going, you can then begin to proactively start saving. One easy and effective way to do so is to set up automatic transfers from your paycheck into a savings account.

Look for financial education opportunities

Working with a financial institution like Bremer Bank or finding financial literacy classes to fill any gaps in your finance knowledge and learn more about available resources are valuable ways to build wealth. Understanding how money works, how to invest, how to improve your credit score, and how to effectively manage finances can go a long way. This is especially true for BIPOC communities who have historically faced barriers to education and financial literacy.

Create a financial plan

Financial institutions like Bremer Bank, professional financial planners and community organizations can serve as a valuable resource in working with you to create a personalized financial plan.

“These plans help identify your goals and your understanding of where you are now and where you would like to be in the future, regardless of whether you’re an individual or a business owner,” notes Spears.


Homeownership is a critical way to build generational wealth, providing stability and allowing families to build equity to pass down to future generations. While BIPOC families have historically faced discrimination in the housing market, making it more difficult to buy homes, many programs and resources are available today to help combat these challenges.


Starting a business is an opportunity to create a legacy and build wealth to pass down to future generations. BIPOC communities have a long history of entrepreneurship, with a study by the Association for Enterprise Opportunity reporting that Black business owners have 12 times more wealth than Black wage earners.


While investing in stocks, mutual funds, and real estate can provide significant long-term return, limited access to investment opportunities and education, particularly for BIPOC communities, paired with fears about financial uncertainties or downturns can cause natural hesitation. Before investing, seek the expertise of financial advisors and investment professionals who understand the opportunities and unique challenges faced by BIPOC communities.

Building generational wealth is crucial for everyone – especially for the economic empowerment of BIPOC communities. Education and knowledge, homeownership, entrepreneurship, and investing are all essential tools to leverage when building generational wealth.

See Original Article at Minnesota Spokesman-Recorder