Here’s Where The World’s Top 0.001% Stash Their Cash
The ultra-wealthy live in their own little universe and invest their money in jaw-dropping ways. Kevin Teng, the founder of Wrise Wealth Management Singapore, a wealth management advisory firm, argues that anyone with over $100 million in assets is eligible to join an ultra-exclusive club known as the 0.001% club. There are roughly 28,420 members of this club worldwide, and most of them reside in cities such as Beijing, London, Los Angeles, New York City, and the Bay Area.
Teng told CNBC that the reason these cities are well-liked by the super-rich is because they have robust financial systems, a plethora of startup business chances, and lucrative real estate markets.
The ultra-rich, according to Teng, are quite particular about their investments. Rich families' financial advisor, Salvatore Buscemi of Dandrew Partners, clarified that his firm does not make investments in products that are difficult to sell rapidly or that promise quick money. To provide two examples, they unexpectedly do not invest in cryptocurrencies and hardly ever acquire stocks that are available to the general public.
"They're not interested in making quick cash," Buscemi told CNBC. "What they really want is to make sure their money lasts for a long time and can be passed down to their families."
1. Real Estate
According to Buscemi, the majority of centimillionaires' investment portfolios consist of numerous valuable homes. They like to invest in premium properties, also referred to as "trophy assets," which are freshly constructed, high-quality properties. As per the statement made by Michael Sonnenfeldt, the founder of Tiger 21, an elite organization of wealthy investors and entrepreneurs, real estate comprises approximately 27% of these individuals' portfolios.
2. Family Offices
Wealth research specialist Andrew Amoils of New World Wealth says that persons with this kind of wealth typically have single-family offices to handle all aspects of their financial lives. "These family offices often also have parts dedicated to doing good things, like giving money to charities, and parts that invest in new companies that are growing fast," Amoils explained.These offices manage credit cards, pay bills, give money to their children, and take care of the family's daily costs. Since 2019, the number of these family offices has tripled, and as of last year, there were over 4,500 of them worldwide. Altogether, they manage assets and funds worth over $6 trillion.
3. Purchasing Sports Teams
Dandrew's Buscemi also noted that wealthy individuals occasionally consider purchasing a portion of professional sports teams. "It's a super exclusive club, and it's not just about having money," he said.
These affluent people like the company of other wealthy and powerful people, therefore being a part of this restricted club is very important to them. According to Buscemi, being a part of a sports team allows individuals to flaunt their social standing. "Purchasing an NFL team in the United States is akin to receiving a knighthood," the billionaire Jerry Jones stated, alluding to his 1989 purchase of the Dallas Cowboys.
Teng from Wrise also noted that various investment kinds receive a lot of attention from the very wealthy. According to him, instead of purchasing stocks or bonds, more attention is being paid to private loans, which are loans made directly to businesses or individuals."This shows that they're interested in different kinds of investments that can give them good returns," Teng explained. He added that these alternative investments can include things like investing in new companies, private businesses, and assets like property.