Where Do Millionaires and Billionaires Keep Their Money? [8 Most Common Places]

Millionaires and billionaires keep their money by investing in different things. Some specific people come to mind when you think about the word ‘billionaire.’

Beginners in the field of personal finance often wonder ‘where do millionaires/billionaires keep their money?’, and it’s a completely valid question.

Here are some of the options these people explore to invest their assets and keep them: 

With all of these options, it’s imperative that you do your own research and completely understand the various investment options before investing your own money. Speak with a certified financial professional so they can help you with your individual financial situation.

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1. Cash and Equivalents 

Equivalents (also known as cash equivalents) and cash are specific types of assets. This includes currency and all short-term investments that you can quickly turn into cash. 

The primary reason why people invest in cash and equivalents is that it doesn’t require anything from you. In other words, it’s the safest form of investment.  

If there is any particular event (for example, a drop in the market prices or something that impacts society, like a war), then your investments could lose value. It doesn’t happen that way with cash and cash equivalents, so they are a safer option. 

Some millionaires and billionaires made a lot of their fortune by working in high-paying jobs. Those people often choose to have up to 25% of their investment portfolio in cash and equivalents. 

Wealthy people also prefer having multi-deposit accounts to hold their money. Other types of accounts often have limitations in terms of how much interest they can give you, so multi-deposit ones might be more convenient. 

2. Funds and Stocks 

Millionaires and billionaires frequently want to build a diverse investment portfolio. This allows you to both grow your wealth and learn new things, so it’s one of the best ways to increase your assets and develop. 

Investing in stocks is a fantastic strategy to diversify an investor’s portfolio, and it’s also one of the wealthy people’s methods to keep their money. A lot of people can significantly grow their wealth by investing in the right stocks too, which is why you might be interested in it as well. 

Some investment types include index funds, mutual funds, or stocks. Each of them offers advantages, disadvantages, and risks, which is why assessing all options is crucial before choosing one of them. 

On some occasions, wealthy people invest a minimum of 20% of their money in stocks. Mutual funds, on the other hand, are often a beginner’s choice because you get liquidity (you could sell your shares if you want) and you can manage your investment at a low cost. 

Although some people invest a minimum of 20% of their assets in stocks and funds, some choose to risk much more than that, and they can even invest 90% of what they own.  

3. Businesses

Most (if not all) millionaires and billionaires either get rich by running businesses or significantly expand their wealth by doing so. Elon Musk, Steve Jobs, and Jeff Bezos are some of the most notable examples of this. 

You need a unique idea, courage, and perseverance to start a business and commit to it. Even so, it’s a fantastic way to keep the money because you’re diversifying your investor’s portfolio and putting your assets in something that can give you some revenue as well. 

Once millionaires and billionaires are successful, they don’t simply invest in new businesses before carefully assessing them. Instead, they often have a team of people that evaluate the option and they make the final choice. 

Therefore, investing in businesses is not as easy as it might seem sometimes. This option can provide you with benefits, but it also has its risks. 

Millionaires and billionaires risk a lot of things when they’re trying to build their wealth. After that, they have to keep their money, and investing in potentially-successful businesses is a fantastic way of doing so. 

A common strategy for millionaires and billionaires is to invest in technology-related businesses, especially because these could generate high returns on investment. 

4. Real Estate Investment 

Many millionaires and billionaires choose real estate as one of the methods to keep their money. There’s a reason why this option is so popular – it’s one of the safest investment alternatives if you know what you’re doing. 

Unlike stocks, the real estate market is much more stable. Millionaires and billionaires can buy properties, and these can offer them a diversified portfolio and cash flow (if they rent them). 

Beginner investors might not choose real estate as their go-to option to invest in, particularly because of the funds you need. With time, this alternative might work for you. 

Mutual funds and stocks are the most common options that some millionaires and billionaires go through first. Once they’re in a stable position, they often buy property to diversify their portfolio and increase their wealth through real estate investment. 

Just because real estate is a more stable option than stocks or cryptocurrencies doesn’t mean it’s without its risks. It’s a convenient alternative for millionaires and billionaires to keep their money, but they still have to evaluate it. 

When billionaires and millionaires wish to keep their assets and invest in real estate, they have to consider various properties and try to choose the best ones to put money in. It is possible to lose money with real estate and it often takes a lot of cash upfront in order to get started in this asset.

5. Commodities

Keeping money as a millionaire or billionaire means assessing different alternatives. Commodities involve various precious metals and other assets you can invest in, for example, gold or even cattle. 

This option might be convenient for you if you don’t want to deal with fluctuating market prices. Some commodities’ prices are very stable, and these might be ideal for you. 

You must still assess which ones are convenient for your goals, though. Gold, for example, has delivered negative returns to some people even though it’s a true investment. 

The downside of investing in commodities is that they require storage and numerous things you might not want to deal with. If you’re getting gold bullion, for instance, you need a place to store your gold bars. 

Storage can be an issue for some billionaires and millionaires, especially because you need to make sure that your assets are safe. 

Another reason why some investors don’t like commodities is that this option doesn’t offer high returns on investment.  

Investing in commodities, though, allows you to guard your assets against inflation. Prices will rise, but your money will often remain safe. 

6. Cryptocurrencies 

Nothing has been the same ever since cryptocurrencies came into existence. They haven’t been around for nearly as long as commodities, but this option has still become one of the most popular ones for billionaires and millionaires to keep their money. 

Crypto typically isn’t the main investment asset though. It often will only make up a small portion of their portfolio, usually 10% or less.

Cryptocurrencies are digital assets, and unlike regular currencies, they are not regulated by a bank or government entity. Investing in cryptos means you completely depend on the value that the market decides to assign to the coins you’re buying. 

In other words, people are the ones who decide which crypto is valuable, and they do so by choosing specific ones over others. Cryptocurrencies use special technology called the blockchain to secure transactions and regulate the creation of new units. 

Investors often choose cryptos precisely because of the blockchain – this type of technology reduces the risks of suffering from fraud. Some millionaires and billionaires such as Elon Musk invest in cryptocurrencies because they believe that these coins could change the future of the world. 

You must take certain precautions when investing in cryptocurrencies, though, especially if you’re a beginner investor. Even though they sound like they could be the correct option for you, this market is immensely unstable. 

Cryptocurrencies have brought benefits to many people, but the market is still unstable and unpredictable. Before investing in them, you should know more about how they work. 

It’s not uncommon to have a 30% or higher increase or decrease in value in a short period of time making cryptocurrency a highly volatile asset. Plus, if you choose the wrong crypto to speculate in, you could lose all of the money you put in.

7. Private Equity and Hedge Funds

Hedge funds and private equity are two options that are almost exclusive for billionaires and millionaires.  

Equity funds include two categories: private and public equity. The latter gets its funds by the trade of shares on stock exchanges, whereas the former gets funding through large organizations like universities. 

When you want to invest in private equity funds, you often have to be an accredited investor. On most occasions, you’re required to earn at least $250,000 in annual income or have $1,000,000 in net worth, not including your home. 

Both individuals and organizations can become accredited investors, but you need to comply with a number of regulations.  

Hedge funds, on the other hand, are entirely different. In this case, they use pooled funds and specific strategies to earn massive returns for the investors. 

Equity and hedge funds sound like promising options, but they’re definitely not the best option for a beginner. 

Billionaires and millionaires keep their money in different investment alternatives, and you could try some of these options even if you don’t have that much money. Hedge and equity funds, though, are often exclusive to the wealthiest people out there.

You frequently have to comply with various regulations if you want to consider them as an investment option. 

8. Alternative Investments 

Some billionaires and millionaires keep their money in alternative investments, which can be very profitable as well. Investors can, for example, invest in antiques, vintage items, rare and expensive music instruments, NFTs, artwork, wine, and even intellectual rights. 

If you’re a beginner investor, you might wonder how you can even choose between all these options. The truth is that when it comes to alternative investments, you have to weigh what you enjoy and what would be profitable and convenient for your portfolio. 

Nowadays, investors often choose NFTs, for example, because they believe that these are the most profitable option. 

Even so, that doesn’t mean that there aren’t other alternatives to keep your money. Sometimes, you can achieve that and have fun at the same time. 

Some people prefer collecting wine or antiques because they simply enjoy it much more than other alternatives. If you love music, you can even hold the intellectual rights to some songs, which can be a very lucrative investment because you can decide what to do with them. 

When it comes to alternative assets, you have to examine which options align with your goals. At the same time, you need to evaluate which one you can enjoy the most. 

What Banks do Millionaires and Billionaires Use?

In the USA, there are a few banks that millionaires and billionaires use to keep their money. Bank of America, Union Bank, HSBC, and Citibank are some examples. 

All of the previously mentioned banks often have specific requisites for the ultra-rich, for example, personal bankers or the option of placing trades. 

Many billionaires and millionaires often store their money and assets in foreign banks, particularly Swiss ones since they’re famously well-guarded, exceedingly private, and immensely safe. 

When it comes to keeping their money, millionaires and billionaires are often very careful. Banks offer specific security measures for these purposes as well, so it also comes down to the person being willing to work with the representatives and explore their options.

Investing in commodities often requires millionaires and billionaires to make specific choices related to their assets. On some occasions, investors might have to pay for additional storage alternatives, especially if they’re investing in precious metals or stones. 

In other cases, they might have to acquire land, particularly if they’re holding cattle or other kinds of animals. 

Overall, managing your assets as a millionaire or billionaire requires you to consider many different factors. You have to make sure that you make the best decisions to keep your money and increase it, and you need to guarantee that it’s safe. 

Most billionaires and millionaires have a team of people that they work with to guarantee they’re always making the best choices. 

No ultra-rich investor works on their own. Instead, financial advisors and numerous trusted experts work with them to guarantee that they can keep their money in the long run. 

When you’re a beginner, you don’t need to worry about having a team of financial experts around you. Instead, you can focus on trying to make the best investment choices and carve your path to success.

It’s imperative to do your own research and understand what you’re investing in completely before parting with your money. If you need help deciding, hiring a CPA or credentialed financial advisor is the best option.

The Bottom Line

Billionaires and millionaires keep their money by using different strategies, such as investing in stocks, funds, cryptocurrencies, alternative assets, real estate, and commodities. Some focus on one of these options, but most of them often diversify their portfolio and pick a few alternatives.

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