Close
Blog
Investing Habits of the Very Wealthy
November 26, 2019 | Freya Allen Shoffner, Esquire | Main Office

Investing Habits of the Very Wealthy





One's wealth or net worth is made up of shares in private and public companies, real estate, and personal investments. This wealth is acquired in different ways. There are some investing commonalities that the very wealthy share that many other investors don't. The very or ultra-wealthy understand how to make their money work for them and know how to take calculated risks. Below are some investing habits the very wealthy have that many others don't.

The ultra-wealthy typically do not limit their investments to the United States and Europe. They also include frontier and emerging markets such as Indonesia, Chile, and Singapore. Investors need to make sure these emerging markets fit with their general investment strategies.

The very wealthy often choose to invest in tangible assets as well as intangible ones. Their assets may include real estate, artwork, and gold. These physical assets aren't as liquid but can help balance the volatility of stocks and pay off over the long term.

Significant wealth is often generated through private businesses. Wealth can grow through business ownership or as an angel investor. Investing entirely in public or common markets is limiting.

Investment goals and strategies drive the very wealthy, competition with their peers does not. They set goals for their future and follow an investment strategy to get there. They follow this strategy and not their peers' investments or purchases. They invest their money to compound their returns until they meet their goals. When they meet their goals, they then have the money to make the discretionary purchases they desire.

Rebalancing one's portfolio is vital. The ultra-wealthy typically have allocation goals which they maintain by regularly looking at and adjusting their investments. Investment allocation easily gets skewed as specific investments gain or lose value. Rebalancing is essential to preserve a diversified portfolio.

The very wealthy follow the dual nature of a financial plan. A financial plan includes investing and saving. Yes, investing is the primary way to become ultra-wealthy. Following a savings' plan allows one to achieve their financial goals in a shorter period of time.

There are many factors that go into a successful financial plan. Considering the financial habits of the very wealthy is wise. Determine what can and should apply to you and your plan. Work with a trusted financial advisor to set and reach your goals.






Back to News Article List...