Growing up in a single-parent household, we didn't have much. We always lived frugally and well below our means. 

When I was in my twenties and single, I only cared about building my career. I didn't think about my own financial future, in part because the idea of retirement felt so far away. I focused on short-term goals and thought moving up the corporate ladder was the surest way to financial success. 

"Just show up, do your work, and someone will reward you for it" was my original formula for success. 

In hindsight, this was short-sighted. My mindset about money changed completely when I had my two kids. I wanted to not only prepare them financially for the future, but build generational wealth that could change the trajectory of my family forever. 

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My wife and I became intentional about managing our money, doing everything we could to learn about personal finance. By the time I was 37, our net worth surpassed a million dollars. My wife and I also founded the website Parent Portfolio, where we share our experience and resources with other parents who want to achieve a similar goal. 

Here's how I'm building generational wealth now:

1. I consistently acquire assets

One of the first steps to building generational wealth is owning an asset — something that has increasing monetary value, or that can generate income over time, like stocks or real estate — that you can pass on to your children. 

A few years ago, we began acquiring assets by investing more intentionally, particularly in the stock market and in rental properties. 

We're big fans of low-cost index funds that track the S&P 500, because index funds are diversified, and that helps to mitigate risk. They can also be a simple way to generate passive income through dividends. 

2. I take advantage of tax-saving strategies

In my 9-to-5, I make sure I use every tax-saving opportunity that is available to me. 

I always take advantage of my employer's 401(k) match option, for example, and contribute pre-tax dollars to a Health Savings Account.

Additionally, I invest the HSA dollars, which allows for tax-free growth and withdrawal.

3. I prepare for the unexpected

I've found that building generational wealth has required me to have a more clear-eyed relationship with my own mortality.

That means that we have spoken with an estate planner and have a life insurance policy in place, as well as a family trust. The last thing we want is for our kids or their caregiver to have to deal with an additional burden of financial stress during a time of grief. 

Setting up an estate plan allows you some control over your assets even after you are gone. A family trust can give instructions as to what the money is used for, such as paying for college, making a down payment or starting a small business. 

It can be set up to distribute money gradually, over time, instead of in one lump sum. And the trust can stipulate that the money used to fund these opportunities should be paid back to the trust for future generations, too.

4. I teach my kids about money early

It's so important to us that our kids have a core foundation in basic financial and wealth-building literacy. We make sure that our children don't see money as a lottery ticket or blank check, but as a tool that gives them access to opportunities for success. 

Now that our kids are older, we've begun giving them an allowance. We teach them to divide up their allowance into five parts: giving, needs, wants, saving, and investing. 

Ultimately, it's up to them on how much they want to contribute to each category. Most importantly, we always remind ourselves how blessed we are, and never take what we have for granted. 

Jonathan Sanchez is the co-founder of Parent Portfolio, where he helps readers take control of their financial future and build wealth for the next generation. He was raised with frugal habits and by practicing wise money decisions, became a millionaire in his 30s. Follow him on Instagram and join his newsletter at Parent Portfolio.

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