Where do millionaires hold most of their wealth?
Where do millionaires hold their wealth?
It’s an interesting question, and Dr. Stanley has the stats:
THEIR WEALTH IS IN INVESTED REAL ESTATE
Much like my millionaire uncle, they own plenty of property that they rent out to others.
Whether it is commercial or residential, they put their money to work for them, and once the mortgages are paid off on these homes or on these commercial properties, it’s almost 100% profit rolling into their pockets by way of rent.
Don’t really want to own either?
You can also look into investing in REIT, or Real Estate Investment Trusts.
THEIR WEALTH ISN’T PRIMARILY IN THEIR HOMES
People who are wealthy, don’t hold most of their wealth in their personal residences (a.k.a. homes), unlike the rest of us.
Just take a look at your net worth — is it mostly your home?
In the case of my parents, it is — it’s pretty much 95% their home that accounts for their wealth and net worth.
Talk about putting all your eggs into one basket! If the real estate market tanks, you’re hooped.
This is why I’m pushing them to save as well, but it’s like talking to a brick wall….
THEY INVEST ON THE STOCK MARKET
That doesn’t necessarily mean buying individual stocks, but they do have their money on the stock market, perhaps in index funds.
Want to learn more about investing? Read a few posts in my Investing Series that I created for beginners.
As mentioned above, they could also be investing in REITs or Real Estate Investment Trusts so that they don’t necessarily own the property but they have a share in real estate.
THEY HAVE MORE SAVED IN PERSONAL INVESTMENTS THAN IN RETIREMENT FUNDS
Millionaires have plenty of wealth OUTSIDE of their retirement funds which are funded by companies, governments, or even by yourself.
It’s probably because it’s 100% maxed out for the maximum tax advantages possible, but they also really know how to save above and beyond what is “guaranteed” to them in such plans.
Relying solely on your retirement funds and not saving above and beyond is not something millionaires do.
FARMS ACCOUNT FOR 3.1% OF THEIR WEALTH
Whether they are buying farms for investing such as exotic and delicious coconut farms a la Pauline, or plain good ol’ farmland that you rent out to farmers like Liquid Independence, millionaires invest in it.
As Liquid always says, “they aren’t making any more land”!
DO YOU THINK LIKE A MILLIONAIRE?