Ever wondered what you can do with your money once you’ve earned it? Besides spending your hard-earned income, you may want to save some of it, along with investing the rest elsewhere. If you’re curious, where do rich people keep their money? They don’t keep it all in a bank, but they’ll spread it out in multiple sports to preserve their wealth.
In this article, I’ll go over seven areas where the rich store their money. These places to put money are utilized by the rich to maintain or build their wealth for the long term.
- Short-Term Cash Reserves
- Treasury Bills
- Real Estate
- Alternative Investments
- Reinvest Money Into Their Business
Why target the wealthiest people?
By no means, I’m not criticizing people who have created a lot of wealth. It’s in no way an “anti-rich” stance; however, it’s to better understand how wealthy individuals think and make decisions.
If these individuals have built great amounts of wealth, they’ll likely use it for good purposes. For example, they may donate it to charity or go into philanthropy.
By understanding the mindset of the rich better, you can make better decisions on how to use the money you’ve rightly earned.
Do rich people keep their money in bank accounts?
- Wealthy people keep parts of their money in short-term reserves, like emergency funds. In addition to investing, there is money left over to spend on nice things.
Where do the wealthy store their money?
Those who are wealthy put their money into multiple places at a time. There are several areas that build long-term wealth, pay fewer taxes, and reduce the risk of losing it to inflation.
The stock market is a common area for the wealthy to invest their money. Companies raise capital by selling stocks, which become shares of ownership between them and individual shareholders.
If the stock price of a company goes up in value, the shareholders will receive a dividend. It’s not easy to make money in the stock market, which is why most people likely lose money in the end.
It’s why the wealthy will take the time to learn about different stocks, or they’ll hire a financial advisor (or two) to manage their wealth.
Short-term cash reserves
Most wealthy people keep some of their money in an emergency fund. In the event things happen unexpectedly (i.e. a visit to the ER), having a fund set aside for unplanned expenses helps.
They won’t set aside a lot of money in cash. The wealthy understand that putting too much into cash or a savings account means their money is sitting around. Their strategy is to put their money to work, rather than sitting around and declining in value (i.e. rising inflation).
For the most part, they’ll put aside at least 25% of their money into short-term reserves. Putting it in an emergency fund is a great starting point.
If you live in the United States (U.S.), Treasury bills (t-bills) are short-term securities provided by the U.S. government to raise money. As short-term notes, they usually come with shorter maturity dates.
Similar to emergency funds, they’ll keep them reserved for shorter periods of time. I won’t go over too much about t-bills. If you want to read about them more in-depth, check out this informative article if you think t-bills are worth looking into.
For hundreds of years, real estate has been one of the most popular investments for the wealthy.
Real estate is necessary for society because people need shelter to survive. It’s why it remains relevant and a lucrative business for people to take advantage of.
You can invest in real estate by buying a property, which you can then rent to tenants. This is a common method for most people who get into real estate.
In other cases, they may invest in commercial real estate, including office space, hotel buildings, and even stadiums. There’s even more potential for income if you go into the commercial real estate sector.
Regardless, real estate is a great investment for long-term planning, which can earn you passive income. Not just in small amounts, but in large amounts that will keep recurring again and again.
Commodities are known to be excellent stores of value for the long term. Some of the most common ones include gold, silver, copper, and cattle.
It’s important to keep in mind commodities are not meant to build wealth. Instead, they’re mostly for preserving wealth in the long run.
For example, gold (as a precious metal) is traditionally a safe haven in an inflationary environment. When inflation rises, the price of gold will go up and be seen as a better alternative to fiat currency (i.e. the U.S. dollar).
Alternatives are tangible assets such as artwork, musical instruments, or even sports apparel. Believe it or not, small things such as baseball cards can be worth a lot more in the future.
For example, I know someone who has some sports jerseys framed up on their wall. These former athletes happen to be Michael Jordan and Brett Favre, with their signatures on their jerseys! I can recall seeing them while I was in this person’s basement, so those can be worth a lot of money down the road.
Other areas can be intellectual property rights, such as rights to songs or movies. So these are considered to be alternative investments as well.
Reinvest money into their businesses
Around more than two-thirds of millionaires are entrepreneurs. So if a wealthy person has a business, they’ll likely reinvest their money back into growing it further.
If someone has a bigger vision of their company, they’ll go out of their way to make it even better. If that’s scaling the business, they’ll use their money to invest in more business growth.
To learn how to start (or even scale) a business, I recommend checking out a place where I invest my money. I put my money into paying for an annual membership at this platform, and it’s worth every dollar for sure.
As mentioned earlier, there are multiple ways to put your money away besides doing it in a bank. The main purpose of this article is to understand the mindset of the wealthy.
If you can grasp how they think and where they put their money, you’ll be multiple steps ahead in building wealth for yourself. Whichever route you choose to take, make sure to do it wisely.
Again, if you want to put your money into starting a little business for yourself, check out my top recommendation for getting started today. The best part is it’s free to start now, so try it out yourself.
Your Turn: Where would you put your money?
I would like to get your thoughts on this subject. Did you know where rich people put their money before reading this post?
Are you surprised, or did you know these were common places to put money in? Which of the seven areas interests you the most?
Do you have a different perspective on how the rich think? Do you desire to have a wealthy mindset to thrive and do well?
Feel free to share your thoughts by leaving a comment below. I look forward to reading your responses, and I look forward to responding promptly.
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Eric is a content writer and the site owner of notimekillers.com. He takes great pride in helping people manage their time and grow their businesses. Eric is a firm believer in time freedom, as he believes in taking ownership of time. “Time is your most important asset. It can be your best friend or worst enemy. How you use your time can shape the future you desire to have.” In his leisure time, Eric loves to write and read whenever possible. He enjoys going for long walks outdoors while doing in-home workout videos every week. You can follow Eric on LinkedIn.
4 thoughts on “Where Do Rich People Keep Their Money? 7 Areas To Invest”
I have just started investing and was just looking around for something like this the other day. Do you plan on something like a defi review or something about crypto exchanges?
I’d like to find out more about those along with more about real estate investment.
Have you invested long? Which one do you personally favor the most?
Having that interest or curiosity to learn about investing is important. The problem is that people don’t understand or are well-educated about what they should invest in.
As far as my investment decisions, I’m not going to give out advice. I don’t like to give recommendations since I’m not a financial advisor.
However, I will say that it’s more of an educational perspective that I believe in. A post such as this one can give you some insights, but I won’t give firm recommendations.
The reason is that everyone’s situation is different, and not all investments are the best for every single individual. Not all investments are created equal- there’s always a risk no matter the circumstances.
So hopefully, this post gave you a general understanding of that topic. But it’s not something I don’t have much expertise in as well.
Thank you very much for your understanding, and for asking those questions. I appreciate what you have to say.
I really enjoyed reading your perspective on where rich people keep their money. I have seen both sides of the coin and believe that wealthy people think differently in general.
It’s important to learn about the choices available so that you can try to grow your money over time. I’ve personally had good success with real estate and investments.
But everything you’ve mentioned has its own unique pros and cons. I think a long-term strategy that is diversified can be lucrative.
But like anything, it’s always wise to learn as much as possible before starting. Thanks for a great read!
I think that’s what makes it unique about wealthy people in general. Their mindset is much different when it comes to thinking about money, which is something I’m fascinated with at times.
The purpose of this post is to educate people on areas the wealthy usually invest in. I would be doing a disservice if I were to make a flat-out recommendation.
I believe you need to learn and understand how these options work before you put your money into anything. If not, you’ll make a lot of mistakes that you’ll regret later on.
So you and I agree on that point, and it needs to be emphasized more than ever. That’s what this article is all about.
Thank you very much for sharing your thoughts- they’re greatly appreciated.