Where Do Billionaires Keep Their Money? (2024)

With inflation still elevated, credit card debt rising, and housing costs skyrocketing over the past few years, many Americans are trying to hold onto the money they currently have and hopefully find a few ways to grow it.

That's why it's worth looking at what the ultra-wealthy are doing with their money right now. There's not tons of hard data out there on how billionaires manage their money. But a recent report from Capgemini Research, a global think tank, sheds some light on where high-net-worth individuals (HNWI) -- people with $1 million or more in financial assets -- keep their money.

Here are the top five places wealthy individuals invest their assets and a few suggestions for storing your money, no matter how much you have.

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1. Cash and cash equivalents

It might seem contrary to some people's assumptions about the wealthy, but the Capgemini report found that HNWI keep a large and growing portion of their assets in cash and cash equivalents, like short-term mutual funds or certificates of deposit.

The data shows that wealthy people have 34% of their assets in cash -- the largest percentage of all the asset allocation categories -- and that it's becoming an increasingly popular place to put it.

In the previous five years, just 25% of financial assets were kept in cash, but with interest rates rising and inflation up over the past few years, HNWI have opted for a less risky place to put their money.

You don't have to be rich to make a similar move with your money. Many banks currently offer high-yield savings accounts, making them an attractive option for safely growing your money.

2. Stocks

Not surprisingly, owning stocks is one of the main categories where millionaires and billionaires prefer to keep their money. The survey shows that 23% of wealthy people's money was in stocks.

Interestingly, HNWI have retreated from stocks slightly over the past year. Capgemini data showed that rich investors put 29% of their assets in stocks in 2022, before paring their allocation back this year.

The types of stocks they invest in have changed, from buying riskier technology stocks to owning more value stocks.

3. Real estate

Wealthy individuals currently have about 15% of their financial assets in real estate. That's roughly the same percentage the affluent have allocated to the financial segment over the past five years.

Rising mortgage interest rates are keeping many people from putting more into the real estate market. Collapsing commercial real estate values across the country will likely keep some investors away from that market as well.

4. Fixed income

Wealthy individuals put about 15% of their assets into fixed-income investments. These are stable investments, like bonds, that earn income over a set period of time.

For example, some bonds, like Series I Savings Bonds, pay 4.3% right now and pay out the interest every six months. Typically, you have to leave the money in the bond for at least one year and you'll receive an interest penalty if you try to cash it in before five years.

5. Alternative investments

The lowest allocation among high-net-worth individuals was for alternative investments, including digital assets like Bitcoin or commodities like gold and silver.

High-net-worth individuals may also have alternative investments that include venture capital endeavors, private equity investments, and art collections.

This category made up just 13% of a wealthy person's assets, but that's still up from 9% in 2018.

Where to put your money

You don't have to match the ultra wealthy when it comes to where you put your money, but you should have a strategy in place. For example, if you want to build your emergency fund and need a safe place, opening a high-yield savings account is a good choice.

On the other hand, shifting some money into a brokerage account where you can buy stocks may be best if you're trying to grow your assets. Fortunately, you don't need to be good at picking stocks to invest in the stock market. Choosing a low-cost index fund can be a great way to passively grow your money over time.

The important thing to remember is to have a plan in place for what you want to accomplish with your money, whether you have $1 million in financial assets or $1,000. If you're unsure where to get started, you may want to consider online robo-advisors, which have low fees, low minimum investment requirements, and can automatically reallocate your investments.

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Where Do Billionaires Keep Their Money? (2024)

FAQs

Where Do Billionaires Keep Their Money? ›

Common types of securities include bonds, stocks and funds (mutual and exchange-traded). Funds and stocks are the bread-and-butter of investment portfolios. Billionaires use these investments to ensure their money grows steadily.

Where do the richest people keep their money? ›

How the Ultra-Wealthy Invest
RankAssetAverage Proportion of Total Wealth
1Primary and Secondary Homes32%
2Equities18%
3Commercial Property14%
4Bonds12%
7 more rows
Oct 30, 2023

What bank do billionaires use? ›

1. JP MORGAN PRIVATE BANK. JP Morgan is named the world's best private bank by Euromoney magazine, the leading authority for the world's banking and financial markets. JP Morgan Private Bank is especially known for their investment services, which makes them a great option for those with a lot of money in their account ...

Do billionaires put their money in the bank? ›

It's not very practical to keep large amounts of cash on hand, so rich people often use it to invest in cash equivalents they can convert to cash quickly and easily if they need to. Cash equivalents are liquid assets such as bank CDs, Treasury bills, money market funds and short-term debt instruments.

How do billionaires hold cash? ›

Billionaires do not keep their money in one place. They have diversified portfolios, owning stocks, bonds, businesses, real estate, etc. They definitely don't have a savings account sitting around with $1B in it. That's because inflation risk hurts the rich most of all.

Where does Elon Musk keep his money? ›

What makes up Musk's net worth. Musk lacks significant tranches of cash; his money is largely tied up in ownership stakes of his companies. To buy Twitter in 2022, he leveraged his large share in Tesla and solicited investors, rather than relying on liquid sums.

How do millionaires protect their money in banks? ›

Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank. Other millionaires have safe deposit boxes full of cash denominated in many different currencies.

Does Kim Kardashian have a bank account? ›

But rest assured: Kim Kardashian is doing just fine financially. Better than fine, actually. Reports this week claimed that Kardashian made $80 million off of her mobile game (spoiler alert: she probably didn't.) But she still has quite a bit of money in the bank, and she's clearly smart with her finances.

What bank does Warren Buffett use? ›

One of Buffett's best investments

Not only is Bank of America a large investment for Berkshire, but it is one of the most successful in its portfolio. Buffett first invested in Bank of America in the wake of the financial crisis -- in an unusual way.

Where do millionaires keep their money if banks only insure $250k? ›

Millionaires can insure their money by depositing funds in FDIC-insured accounts, NCUA-insured accounts, through IntraFi Network Deposits, or through cash management accounts. They may also allocate some of their cash to low-risk investments, such as Treasury securities or government bonds.

Do billionaires use credit cards? ›

What Credit Card Do the Super Rich Use? The super rich use a variety of different credit cards, many of which have strict requirements to obtain, such as invitation only or a high minimum net worth. Such cards include the American Express Centurion (Black Card) and the JP Morgan Chase Reserve.

Can you keep a billion dollars in the bank? ›

Can you put a billion dollars in a savings account? No. Most financial institutions would be dwarfed by the size of your deposit. They only make money by INVESTING your deposits, and earning a higher rate of interest than what they have to pay to you.

Do billionaires have checking accounts? ›

Some billionaires may have accounts at multiple banks for diversification and security reasons, while others may consolidate their accounts into one or a few banks for simplicity and ease of management. It's also important to note that not all billionaires may keep their wealth in traditional banks.

How do billionaires avoid taxes? ›

Billionaires (usually) don't sell valuable stock. So how do they afford the daily expenses of life, whether it's a new pleasure boat or a social media company? They borrow against their stock. This revolving door of credit allows them to buy what they want without incurring a capital gains tax.

Do billionaires live off loans? ›

Wealthy people aren't afraid of borrowing. But they typically don't borrow money to live beyond their means or because they failed to save for emergencies or make a plan to cover expenses. Instead, rich people tend to use debt as a tool to help them build more wealth.

Are all billionaires in debt? ›

Most billionaires don't actually have much cash sitting around in bank accounts. Their wealth is in the form of assets — usually stock in the company that lifted them to billionaire status. In order to access their money, they would either have to sell some stock or borrow against it.

Do millionaires use credit cards? ›

Although most adults have credit cards, millionaires are even more likely to use them. According to the Federal Reserve, almost all adults with incomes over $100,000 have a credit card in their name.

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