Banking Savings & Money Market Accounts

15 Places Ridiculously Wealthy People Keep Their Money

Learn the diverse investment strategies wealthy people use to build and protect their fortunes.

By Carley Clark

Edited by Eric McWhinnie

Updated Dec. 17, 2024

Have you ever wondered where the world's wealthiest people keep their money?

When you're worth billions of dollars, keeping your entire fortune in the bank is risky. That's why the ultra-rich make sure to diversify their funds across many investments.

Luckily, these strategies aren't reserved for millionaires. Here are 15 places where ridiculously wealthy people invest their money, and you can too.

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Stocks

Historically, stocks have provided the highest rate of return compared to other common investments, like savings accounts and bonds. That's why many wealthy people often invest heavily in the stock market.

In fact, Warren Buffett advised his trustee in 2014 to put 90% of his funds into an S&P 500 index fund. Stocks can be risky, but they may prove a lucrative investment, especially over the long run.

According to J.P. Morgan, the S&P 500 has had a total average annual return of about 11% since 1950.

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Government bonds

Buffett also advised his trustee to put the other 10% of his funds into short-term government bonds.

Buying government bonds is basically loaning the government money in exchange for interest payments. They are generally considered safe investments because they are backed by the federal government.

The government pays interest regularly, so the rich use these bonds as a steady source of income.

High-yield savings accounts

Depositing money into a high-yield savings account is a safe way to earn a decent return.

These accounts typically offer around 4.00% APY these days — much better than the FDIC national average of only 0.46% on regular savings accounts. They are usually FDIC-insured up to $250,000 per bank ($500,000 in joint accounts), so money is protected if the bank fails.

The wealthy invest in high-yield savings accounts because it's low-risk and provides liquidity when they need money quickly.

Get a free stock valued between $5 to $200

Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

Open and fund a Robinhood account and earn up to $200 in stock

401(k)

A 401(k) is a plan to save for retirement that an employer sponsors.

An employee can contribute some of their pre-tax income to their 401(k), and the employer may offer to match those contributions. The employee can then choose to invest the contributions into various funds, like stocks, bonds, and mutual funds.

Wealthy people use 401(k)s because it's a convenient way to save, invest, and defer taxes.

IRAs

An individual retirement account (IRA) is a savings plan for retirement with tax advantages. IRAs offer many investment options, including stocks, bonds, and mutual funds.

The rich use IRAs to diversify their investment portfolios, grow their wealth, and reduce tax liabilities. IRAs also offer more control and flexibility over investments than 401(k)s.

However, 401(k)s offer higher annual contribution limits than IRAs, so there's less money-saving potential from tax advantages.

CDs

A certificate of deposit (CD) is a savings account that you deposit money into but can't touch for a set amount of time (at least usually not without a penalty). During this time, your money earns interest.

Fixed-rate, federally insured CDs are a low-risk way for wealthy people to earn a guaranteed return on their investment.

Grow Your $$: 11 brilliant ways to build wealth after 40

Businesses

Many ultra-wealthy individuals own businesses, either as entrepreneurs or investors.

Investing in companies may offer a return on investment. However, it can be risky because businesses have the potential to fail.

The wealthiest people often own companies and invest their profits back into the business. For example, Elon Musk said in a 2018 interview that his biggest investments were in his own companies, Tesla and SpaceX.

Commodities

Purchasing commodities is another way for the rich to store their wealth, hedge their bets, and diversify their portfolios.

Commodities are raw materials that can usually be grown or extracted and then bought or sold. Some examples are oil, copper, and natural gas.

Investing in commodities can protect against inflation because their value often rises along with other prices.

ETFs

An exchange-traded fund (ETF) pools money from investors to buy stocks, bonds, and other assets. It's an efficient way to diversify investments and manage risk across multiple sectors.

ETFs are traded like individual stocks, meaning investors can buy and sell them quickly. This is ideal for the wealthy who want to easily change their asset positions.

They're also lower-cost, more transparent, and more tax efficient than mutual funds.

Earn up to a $300 bonus and grow your money with up to 4.00% APY

This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 4.00% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>

This is one of the top accounts we’ve seen, and offers like this can be rare. You work hard, and now it’s time to make your money work for you — with SoFi, you can grow your money with hardly any effort!

SoFi has no account or overdraft fees⁵ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.⁶ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a> Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

How to earn up to $300: Sign up and make a direct deposit within the first 25 calendar days of the promotional period, then collect a $300 cash bonus with a direct deposit of $5,000 or more.

SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

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Real estate

Real estate is typically a sound investment because it can appreciate over time, provide passive income through rent, and offer tax deductions.

As a result, wealthy people often invest in luxury homes, commercial buildings, rental properties, and land. Bill Gates, for example, owns 272,000 acres of farmland.

They may also use real estate as collateral to receive loans. This gives them access to more money that they can invest elsewhere.

Corporate bonds

When a corporation needs capital, it can issue bonds that investors can buy.

If investors buy the bonds, they're essentially lending the corporation money in exchange for interest payments and a return of the principal at maturity.

The wealthy buy corporate bonds because it's a steady income stream, and they may get back the entire principal if held to maturity. They can also offset risk from volatile stock holdings.

Regular brokerage accounts

Brokerage accounts give wealthy people access to various investments they can buy or sell anytime, making it a convenient place to keep their money.

With the ability to invest in stocks, ETFs, bonds, and mutual funds, the rich may yield greater returns.

Unfortunately, there aren't tax benefits like there are with retirement plans, but brokerage accounts offer much more flexibility.

Supercharge your investments: See what could happen if you add fine art to your investment portfolio

529 plans

A 529 plan is a savings account for educational expenses and often comes with tax advantages (many states provide a tax deduction on contributions).

Funds can be invested in assets such as ETFs to potentially generate higher returns than regular savings accounts.

The wealthy often establish a 529 plan for their kids and grandkids early on to help save for their future education.

Trusts

A trust fund is a legal arrangement where a trustee manages your assets to benefit another person, group of people, or organization.

The rich use trust funds so that when they die, their beneficiaries can inherit their assets while avoiding probate and certain taxes.

They can also control how the beneficiary uses their assets; for example, stipulating that money can only go toward buying a house.

Other tangible assets

With their level of wealth, the super-rich get creative when finding new ways to diversify their investments.

Some prefer to purchase tangible assets that they are personally passionate about and can enjoy. For example, they may collect classic cars, art collections, fine wine, and even unique coins.

Not only do these assets store their wealth, but they could appreciate in value.

Bottom line

While the investment strategies of the ultra-rich may seem out of reach for the average person, you can still take inspiration from their success and apply their methods to your own finances.

Some may use shady tactics like offshore bank accounts to avoid taxes, but there are many ethical investment techniques you can implement.

Whether you're interested in real estate, art collections, or more traditional options like stocks and bonds, taking calculated risks to pursue your financial goals may help you build wealth while you sleep.

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