Weekend Reading: Where Do Millionaires Keep Their Money? [It’s Not Where You Think]

Posted: 02/17/2023

|Investments |"Of Dollars and Data" Articles

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.

Weekend Reading

Like many, you might be curious about how millionaires, trillionaires and even billionaires approach money management. Understanding how they protect and grow their assets may just help you elevate your financial wellbeing too.

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Millionaire portfolios: Based on a 2020 study from Vanguard titled, “How America Invests”, on average, a typical millionaire’s asset allocation consists of 65 percent stocks (equity), 25 percent bonds (fixed income) and 10 percent cash. As households go from age 50 to 80, however, bond allocation increases further to 30 percent.

Further, a study from VisualCapitalist found millionaires disperse about 25 percent of their wealth into their primary residence, plus 15 percent into “business interests”. For remaining assets, this means roughly 60 percent went to stocks, bonds and cash, but as wealth increased, more money went to business pursuits.

Market approach: As for the markets, millionaires also follow past podcast guest Jeremy Siegel’s advice and let their investments ride for the long run. They also focus on diversification through mutual funds, and older households in particular take on active investing strategies, while following generations are more keen to utilize passive investing.

If you want to invest like a millionaire, stick with common sense strategies. Don’t time the market, exercise caution with individual stocks and consider carrying more cash.

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