Where Do Billionaires Keep Their Money

There are ~3,311 billionaires in the world according to visualcapitalist.com and we all think about what it might be like to be on that list. At least you aren’t Elon Musk carrying a sink into Twitter before the acquisition (yes it happened).

The three biggest areas that anyone with cash can invest in I’d recommend starting with.

#1: Gold IRA

#2: BitIRA (Bitcoin IRA)

#3: NovatechFX (trading Forex / crypto platform)

As you go down the list, it becomes harder and harder to get your cash into the investment types. It’s not because you don’t know about it, it’s because you have to be one of the accredited investors. We’ll get to what that is and why it matters a bit later but just know that you should think about getting yourself setup with a gold IRA from Augusta Precious Metals, NovatechFX to jump into precious metals and cryptocurrency with your existing 401k and investment portfolio.

Gold IRA & Precious Metals

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With the tension in the world around inflation, war and the US government printing 20% of our total money supply during the COVID times, we need to be thinking outside of what your financial advisors may be telling you about your liquid assets. You may have money market accounts and vey lucrative investments sitting in USD but do you know what is going to happen with the US Dollar? It’s hard to really think about the tried and true investment options like index funds, mutual funds and just the stock market in general having capital appreciation overtime.

What happens if we see a real global issue that causes global currency to continue to be devalued year after year?

Robert Kiyosaki talks about gold, silver and livestock as an insurance policy rather than an investment. Here’s one of his latest interviews but the idea is that if the world comes tumbling down and your net worth goes to $0 because you’re cash or cash equivalents are in a retirement account, commercial real estate or some type of private equity funds you can’t access – you’ll need something to trade and that is gold and silver.

Cryptocurrencies

Billionaires have been made on Bitcoin and some of them may have a net worth that increases that billionaire number above even higher. It’s hard to really know how many Bitcoin Billionaires there are but they do exist.

The easiest thing to do to get into cryptocurrency is setup a BitIRA and NovaTechFX account.

BitIRA is another service that will let you move your 401K money into Bitcoin vs. trying to do it post tax. You can do it with your own cash if you don’t want to take the risk of moving the funds your financial advisor may be managing. If you have bank accounts that have tangible assets you want to move over, you can do that too. I just look at BitIRA as a legitimate investment if you’re thinking about holding onto it until you want to pull cash out of your 401k as part of your retirement accounts.

We also know that Bitcoin goes up and down but if you are an avid reader of The Milk Road, you’ll know there that over the long term it will go up. There may be more downside coming for Bitcoin so time this correctly to get in and make sure you’re comfortable with all the risks. It’s unlikely at this point that you’re going to make a billion dollars but who knows. It’s also possible you lose everything you put into it so just be careful with that much money.

Real Estate Investments

CrowdStreet is the best real estate investment service I’ve found. They will help you build a real estate portfolio without having to be a landlord or manage properties.

I use to own rental properties in the real estate market where I’d need to manage tenants and deal with fixing up properties. I didn’t want to have a property management company and thought it would be better to save the 8% monthly rent by doing it myself when living in Eugene, Oregon.

At my old age I’ve realized that it’s just not worth doing this and furthermore it’s not even worth dealing with buying up the property and finding a property management company. It could be that I’m just jaded dealing with other people but I’d prefer to have a team find the properties, invest in them and I get a percentage of what they are able to pull out of the lucrative investment they find.

This comes in two forms

  1. CrowdStreet
  2. Qualified Opportunity Zones

CrowdStreet

CrowdStreet allows you to invest in multiple properties and geographies to distribute your exposure on one area. I think about it as an index fund of real estate options that are typically commercial. The more money you have to invest, the more properties you’ll be able to access. This is much easier than trying to find real estate agents or build your own large real estate portfolios across multiple countries. These are legitimate investments that you’ll be able to earn some real passive rental income from. It might come in the form through CrowdStreet but it’s much better than trying to have renters that try and keep their money.

Qualified Opportunity Zones

One of the best things I’ve done is look at opportunity zones (QOZs) which (at the time) were based on the 2010 census. Inland Private Capital Corporation is one of many interesting firms that can help you get involved with opportunity zones. They closed out their first opportunity zone offering back in 2019 but they know what they are doing. If you’re looking for a long term way of decreasing your tax exposure and want to get into real estate, you should really consider digging more into what a QOZ is and how you can take advantage of them. You typically need to be one of the accredited investors to access this stuff but I’m sure if you can raise money or find other ultra rich investors, you may be able to access these types of opportunities.

The financial and real assets you’ll get from these very lucrative investments are worth considering so I would spend some time thinking about what you have in your bank account or private banks that you’d want to dedicate to something like this.

Funds and stocks

To me this is the real boring stuff but necessary. Of course billionaires are going to have dividend paying stocks and look at public equity markets to put cash into. This is another way of diversifying their risk with their own money and probably hold index funds too. Grant Cardone says that you need to have no money in your account or Mr. Beast who just reinvests everything back into his businesses (which we’ll get to next) but I’m sure they have something like the Vanguard Index Fund or Schwab’s version of that.

They aren’t going to have zero balance accounts and I’m sure that’s just for show on their YouTube channels for clicks and views but equity securities and accessing stock exchanges for generating current income they have is on the list. I just don’t believe that billionaires are ignoring the traditional ‘safe’ investments. On one of the latest episodes of My First Million, they interviewed Palmer Luckey about where he keeps his cash. Many of the billionaires out there own major companies in their stock portfolio.

Businesses

During the interviews I’ve heard from Elon Musk and Marc Zuckerburg on Rogan’s Pod or if you’ve listened to the My First Million (MFM) guys chat about Mr. Beast investing back into his businesses- there are some billionaires that just go all in on their businesses and ignore the rest.

If you’re thinking about your business in the same way, you can obtain financing in the form of cheap debt to take on more potential upside.

If you’re able to leverage your business and go get debt or find pooled funds to enhance wealth – you should really think about doing that.

It’s hard to believe but some billionaire’s investment philosophies are around going all in with their time managing investments or highly liquid cash equivalents that allow them to build cash flow businesses. They aren’t going to have enough liquid assets to show you $1B on a briefcase but their assets and portfolio of assets will show you that.

Mr. Beast – Beast Burgers

It’s amazing to see how some YouTubers like Mr. Beast are leveraging their audience and reach to build out new business ventures. Check out why 10,000 people swarmed his first opening. It’s important to realize that once you’ve built an audience with your content, you have leverage with such assets like this. Your audience and content is an asset that you can’t necessarily put a dollar amount on but clearly if you execute it correctly you can see examples and situations like this emerge.

Empire Flippers

Empire Flippers isn’t a billionaire but it’s a platform that you can buy businesses on. It’s a great way of investing cash into an alternative asset class that you may not be thinking about. It’s also something that is an online business that typically is able to run itself once you get it rolling. These are online businesses that I believe in but there are many different investment philosophies that you’ll need to consider. Typically you won’t get cash from fund managers you work with or a private bank but if you have a savings account you’d rather see earn some passive income from an online business vs. sitting in a US Dollar account that is losing 7-8% per year due to inflation, you should check this out.

Flippa.com

This is another platform that won’t allow you to use gold coins to purchase a business but if you have USD – go for it. I like this one because it’s an easy way to identify some fun online businesses but not as extreme as the larger ones you’ll see on Empire Flippers. They won’t make you a billion dollars but you will be able to earn some passive income which is the point of being able to free yourself from working the 9-5.

Private equity and hedge funds

YieldStreet

YieldStreet is one of those platforms similar to CrowdStreet but for the equity markets that you can’t typically get into. They are able to crowdfund cash and distribute it across investments.

Goldman Sachs Private Equity Fund

Goldman’s Private Wealth Management team is most likely where billionaires are storing cash that’s similar to a custodial private bank but is most likely going to be hands off for them. Goldman has access to all sorts of investments that you can’t get with a typical investment firm. Hedge funds invest in all sorts of things but when you think about the private equity market, this is one of those funds that would be worthwhile to consider.

GTMFund.com

This one is really unique and I don’t think there are any billionaires in here (yet) but Max Altschuler has setup the fund in a way that people like me can join in. It’s for GTM leaders from B2B SaaS organizations looking to distribute their cash across early stage B2B SaaS companies. We even have a slack channel setup that makes it easy to communicate between all the GP/LPs in one place. We also get a front row seat to help all the portfolio companies make sure they have what they need to succeed. Check out gtmfund.com and let me know if you have any questions about this. It’s not a savings account or a private banker but it is quite fun!

Venture Capital

There are a number of venture capital firms that billionaires are a part of. You could argue that the General Partners (GPs) are just that. They find the early stage investment opportunities in private markets and take a large percentage of a business and use that as a way to make their money. Some of the examples are a16z, Emergence Capital, Sequoia, Benchmark and there are many more but it’s a hidden world that is hard to break into. I’ll most likely pull together a much more detailed article together around this topic because it’s a big one but for now I’ll leave it at that.

Alternative Investments

Land & Water Rights

Did you know that in California that as a marina owner you don’t own the water or the land? It’s actually a lease from the state for multiple decades but you don’t own it. That’s crazy to me.

Did you also know that it takes a gallon of water to produce one almond? Yeah. That’s real.

My point is that it’s important to own land like we’ve talked about but what about water?

You can buy water rights from westernwatermarket.com here. I know this is end of the world type of stuff but think about what you could do if you owned water and we continue down this path of lack of water in the west. It’s important to think about and Billionaires are buying up rights in California because of this reason.

SpaceFund.com

Do you think that we are going to mess up this planet so badly that we all need to leave and live on Mars?

SpaceFund.com allows you to invest in the exploration that is space. I don’t know why NASA stopped allowing exploration but we have spacefund.com to make sure it continues.

Cash and equivalents

Where can I invest large sums of money safely?

This is a difficult question. There are a lot of options and it really depends on your risk tolerance and what you are looking for. I would say that the safest bet is to stick with cash and equivalents like short-term bonds, money markets, or CDs. You can also look into annuities if you want something that is a bit more stable.

Another option is to invest in gold or other precious metals. This can be a good hedge against inflation and economic turmoil.

If you are looking for something with more potential return, you can consider stocks, mutual funds, or real estate. However, these options come with more risk.

How do wealthy people protect their money?

There are a few different ways that wealthy people protect their money.

One way is to diversify their investments. This means investing in a variety of different asset classes, such as stocks, bonds, real estate, and cash equivalents. This helps to spread out the risk so that if one investment falls in value, the others may still be doing well.

Another way to protect wealth is to use tax-advantaged accounts, such as IRAs and 401(k)s. This allows the money to grow tax-deferred or tax-free, which can add up to significant savings over time.

Finally, many wealthy people have insurance policies in place that are umbrella policies across everything in case everything goes sideways.

The bottom line

Billionaires are smart. They have many investments across multiple categories and it’s important that you really think about your long term goals and vision. I’ll continue to pull together more content around this but I would highly recommend getting a gold IRA, cryptocurrency and real estate in your portfolio if you don’t have it today.

Andrew's Pick

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