A house is the default generational wealth move, but a Twitter poll shows people prefer inheriting a diversified stock portfolio. Bumping up retirement contributions by a few percent generates hundreds of thousands of dollars. A house split among siblings creates conflict; a Vanguard portfolio doesn't.
I already need to lay down the law when it comes to generational wealth and real estate. It is so funny that in America, almost nobody talks about investing or wealth generation except for two freaking examples. Can you catch what they are? Number one. Well, I'm getting married, but I would really prefer to have a small, simple wedding and instead put a down payment on a house. And then the second one, we had kids. We need to buy a house so we can pass on generational wealth. Why are you not talking about a random Tuesday? Hey, we really should increase our investment contribution rate from 7.5% to 8.5% of gross income. That would be great. That would actually be worth hundreds of thousands. Nope, you don't do that. You only equate it to real estate, and you don't even know why. I asked my audience on Twitter, what would you rather inherit, a house or stocks? And they were like, overwhelmingly, I want the stocks. I want an investment portfolio. Think about it. Your parents live in a city that you probably don't want to live in. They live in a house that probably you don't want to live in. It has not been renovated since 1984. Also, what if you have siblings? You have three siblings, and suddenly you're given one house. How are you all going to do it? One person wants to sell it, the other wants to keep it, but they can't afford it. The third one says, I'll do whatever the other person says. Now you're in a pickle. Now you don't talk to each other for the next six generations. They would rather you just build a nice Vanguard portfolio and then give it to them in their 30s and 40s.
