How Millionaires Manage and Store Their Wealth

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Ever wondered where millionaires stash their money? There are several ways they do it. Some prefer to keep their wealth safe in high-yield savings accounts and CDs, while others like to see it grow through investments. According to a Bank of America Private Bank study, millionaires commonly invest in stocks, mutual funds, and retirement accounts, with over 55% of their wealth in these assets. Real estate is another popular choice among millionaires.

The key to building and protecting wealth is diversification. Here are some of the popular places millionaires keep their money:

1. Stocks
   Many millionaires invest in stocks to create a diversified portfolio and grow their wealth. Investing in stocks can be risky, but spreading your investments can help. The stock market has a history of long-term growth, even though there are short-term ups and downs.

2. Mutual Funds
   Mutual funds are popular because they help spread out risk. By pooling money with other investors, you benefit from professional management and diversification without having to pick individual stocks. Companies like Fidelity Investments, Charles Schwab, and Vanguard offer mutual funds tailored for high-net-worth investors. ETFs are similar but have lower fees and trade like stocks.

3. Retirement Accounts
   Saving for retirement is crucial, and millionaires often use accounts like 401(k)s and IRAs. These accounts help save for the future while offering tax advantages. Though high-income earners might not qualify for Roth IRAs, they might have access to Roth 401(k)s through their employers. Financial advisors can help determine the best option.

4. Private Equity and Hedge Funds
   Private equity and hedge funds are investment funds focused on high returns. They often require accreditation, meaning investors must meet certain financial criteria. While not as common as other investments, about 10% of millionaires own hedge funds.

5. Real Estate
   Real estate is a favorite for many millionaires. It can generate income through rent and appreciate in value over time. Common investments include residential rentals, commercial properties, and vacation rentals.

6. Commodities
   Investing in commodities like gold, silver, oil, and wheat helps diversify a portfolio and hedge against inflation. While they hold value well, commodities can be volatile and expensive to trade.

7. Businesses
   Owning or investing in businesses can be lucrative. With the right decisions, businesses can generate significant income. Over 11 million businesses are owned by millionaires.

8. Cryptocurrency
   Cryptocurrency is gaining popularity among millionaires as a way to grow wealth. There are various ways to invest, including holding, trading, or mining coins. Despite the risks, the potential for growth is significant.

9. Cash and Equivalents
   Keeping money in cash or cash equivalents is a safe bet. It’s easy to access and doesn’t ride the stock market’s ups and downs. Examples include money market funds, CDs, commercial paper, and government bonds.

What Banks Do Millionaires and Billionaires Use?
High-net-worth individuals often use banks that offer specialized wealth management services. Popular choices include JPMorgan Chase, Bank of America, and UBS. Other options are private banks, investment banks, online banks, credit unions, and brokerage firms.

Bottom Line – Where Millionaires Keep Their Money
Millionaires have various investment options, such as stocks, mutual funds, real estate, and cash equivalents. Each has its own risks and rewards, so it’s vital to research and choose the right investment to grow your wealth.