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Investing Tips for Those Who Are Already Wealthy

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Published
07/10/2019

Investing is different when you already live the luxury lifestyle. Like anyone, you want to keep growing your wealth; you need it to retire, it’s something you can pass on to your children, you can pursue philanthropic endeavors.

Put simply, the rich invest differently, and it gives them an edge. Here are a few ways you can make sure you build and protect your money when you’re already living the good life.


#1 Diversifying Your Portfolio

How do you make sure you stay wealthy? Every investment comes with a bit of risk. Keeping it in cash means you lose purchasing power to inflation. If you only have a few thousand in your bank account, 2% inflation isn’t much, but when you have two million, 2% inflation costs you $40,000 – as much or more than many make in a year. You don’t get, or stay, rich by sitting on you crash.

Instead, you diversify your portfolio and spread out the risks. Bonds, stocks, real estate, gold, fine art – they’re all part of a healthy mix for high net worth investors. 


#2 Taking Bigger Risks

One of the advantages of approaching investing with more money is that you can feel comfortable taking bigger risks that promise better returns. Whereas other investors may shy away from truly high-risk endeavors, you can make investments without compromising your overall wealth. The important thing is that you don’t over-do it and that you always have a strong portfolio you can rely on when those risks don’t pay out. 


#3 Finding Security

When you already live the good life, investing isn’t always about growing your money so much as it is about making sure your savings are safe, no matter what happens. Because you have money to spare, it’s easier to take risks, but you always need that diversified foundation to make sure that even when everything is going belly-up, the core of your wealth is secure.

If you want to make sure your money has the staying power the ultra-wealthy enjoy, invest in gold. When global and local economies look bad, the world’s richest buy gold for two reasons:

  • Gold is the world’s oldest store of value. “Investors,” in whatever form they’ve taken throughout centuries and civilizations, have always believed in the value of gold.
  • It’s insurance for the rest of your portfolio, and when prices surge due to lacklustre growth or high risks elsewhere, you can take advantage of low stocks prices by rebalancing your portfolio.

About 10% your portfolio should be in gold bullion permanently, and anything above that should become trade-able when you need to make some adjustments. You should get more info about gold and invest in physical bullion.


#4 Rebalancing

Your portfolio should be divided based on your risk tolerance, with stocks going into the high-risk side of your portfolio and bonds and other alternatives making up the low-risk side. Because each side will perform differently, your portfolio will need to be rebalanced from time to time.


#5 Alternatives to Bonds

Bonds are popular with all kinds of investors, but when you have a high net worth, you need to look beyond low-interest bonds into what might be called alternative or even “exotic” assets. These includes commodities like gold bullion, fine art, and investment properties. A great way to reliably build your wealth is income properties, while physical gold bullion can effectively preserve wealth.

Maintaining the good life is about making smart, measured investments. Risk-taking is all part of the game, but there’s a smart way to do it, and it means protecting your wealth against anything. When your money does the work, you don’t have to.

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