Rich People: Where's The Money?

As of 2024, the ultra-wealthy are investing in a variety of assets, including real estate, public equities or stocks, cryptocurrencies, alternative energy, high-yield savings accounts, and more.

Inflation is top of mind for the rich, and they are taking steps to preserve their assets by building inflation-resistant portfolios. This includes investing in real estate, such as industrial properties and apartment buildings, as well as public equities in platform companies like Amazon, Apple, and Airbnb.

Additionally, the ultra-wealthy are doubling down on their crypto investments, with popular choices being Ethereum, Bitcoin, and Dogecoin. They are also increasing their investments in alternative energy, with electric vehicle stocks like Tesla, Rivian, and Lucid being attractive options.

It's worth noting that the investment strategies of the ultra-wealthy are not always a secret, and they often involve calculated risks, a focus on long-term goals, and a disciplined approach to investing and saving.

Real estate

Passive Cash Flow

Appreciation

Tax Benefits

Leverage

Principle Pay Down

As investors pay down their mortgages, they build equity in their properties. With rental properties, tenants effectively pay down the mortgage, helping investors build wealth with minimal effort. Additionally, investors can refinance their properties and pull out equity through cash-out refinancing, providing tax-free income that can be reinvested.

A "Feel-Good" Business

Other Benefits

While real estate investing offers numerous benefits, it is important to note that it also comes with risks. Due diligence, market analysis, and a thorough understanding of the investment strategies are crucial to success.

Cryptocurrencies

When it comes to investing in cryptocurrencies, it is important to do your research and understand the risks involved. Some of the common risks associated with cryptocurrencies include high energy usage associated with mining, evolving government regulations, the prevalence of scams and fraud, and the potential for high returns.

Some of the most popular cryptocurrencies that investors are putting their money into include:

• Bitcoin (BTC): The original cryptocurrency, created in 2009, with a market cap of $1.2 trillion as of June 2024.
• Ethereum (ETH): Both a cryptocurrency and a blockchain platform, with smart contract applications and a market cap of $405 billion as of June 2024.
• Tether (USDT): A stablecoin backed by fiat currencies, aiming for a consistent value, with a market cap of $112.9 billion as of June 2024.
• Binance Coin (BNB): A cryptocurrency used for trading and payment processing on the Binance exchange, with a market cap of $84.4 billion as of June 2024.
• Solana (SOL): A cryptocurrency that powers the Solana blockchain, designed for decentralized finance (DeFi) and decentralized apps (DApps), with a market cap of $63.4 billion as of June 2024.
• Cardano (ADA): A proof-of-stake cryptocurrency created with a research-based approach, aiming to be the world's financial operating system, with a market cap of $26.5 billion as of June 2024.
• Dogecoin (DOGE): A "memecoin" that gained popularity in 2021, accepted as a form of payment by some major companies, with a market cap of $14 billion as of June 2024.

While the above cryptocurrencies are some of the most popular ones, there are thousands of different cryptocurrencies to choose from. It is important to consider your investment goals, risk tolerance, and conduct thorough research before investing in any cryptocurrency.

Alternative energy

The world is moving away from carbon-based fossil fuels and towards cleaner, renewable energy sources. This shift is being driven by the need to address climate change and reduce carbon emissions. As a result, renewable energy sources such as wind, solar, and hydroelectric power are becoming increasingly attractive investment opportunities.

Renewable energy investments are delivering significantly better returns than fossil fuels. A study by Imperial College London found that in the US, renewable energy investments yielded returns of 200.3% compared to 97.2% for fossil fuels. Similarly, in the UK, green energy investments generated returns of 75.4% compared to just 8.8% for fossil fuels. Despite these impressive returns, the total volume of investment in renewable energy is still not enough to mitigate climate change.

There are several ways to invest in renewable energy. One way is to identify individual companies that produce alternative energy technologies, such as solar panels or wind turbines. For example, First Solar, Inc. (FSLR) is one of the world's leading solar panel makers and has seen gains of 61% over a three-year period. Another way to invest is through mutual funds or index funds that focus on renewable energy, such as the Invesco WilderHill Clean Energy ETF (PBW) or the iShares Global Clean Energy ETF (ICLN).

Hydropower is expected to be the dominant renewable energy source in the coming years. General Electric Co. (GE) and Siemens AG are two companies that are actively involved in the hydropower business and could be strong players in the expansion of renewable energy.

Climate change represents an existential threat to human civilization, and the transition to clean energy is inevitable. Global investment in transitional technologies reached $1.77 trillion in 2023 and is expected to increase to $4.8 trillion per year between 2024 and 2030. As a result, the renewable energy sector offers a massive opportunity for investors, with strong returns expected in the coming decades.

High-yield savings accounts

UFB Direct High Yield Savings

UFB Direct is an online division of FDIC-insured Axos Bank. Its Secure Savings account pays an excellent 5.25% APY. There is no monthly fee, no minimum balance requirements, and all balance tiers earn the top rate. Customers can also access their money at over 91,000 ATMs nationwide.

Laurel Road High Yield Savings

Laurel Road is an FDIC-insured digital banking platform owned by KeyBank. Its High Yield Savings provides a competitive 5.15% APY with no monthly account fees or balance requirements. There is no minimum deposit needed to open the account. Laurel Road also offers a wider lineup of products, including a checking account, credit card, and loans.

Varo Savings Account

Varo is a digital-only bank with over 3 million customers. Its savings account offers an APY of 5.00% on balances of up to $5,000 and 3.00% APY on the rest. There are no monthly maintenance or service fees. Customers also have access to the Varo Believe card, a secured charge card designed to help raise credit scores.

LendingClub Bank High-Yield Savings

LendingClub's High-Yield Savings account offers a combination of no monthly fees and a strong 5.00% APY on your entire balance. Customers can access their money at over 37,000 MoneyPass or SUM ATMs for free using LendingClub's free ATM card. LendingClub has excellent customer reviews on Trustpilot, with an average 4.7-star rating.

TAB Bank High Yield Savings

TAB Bank is an online bank offering a high-yield savings account with a 5.27% APY, which is more than eleven times the national average. There is no minimum deposit to open the account, and no ongoing minimum balance requirement. There are also no monthly fees. TAB Bank also offers excellent rewards checking and CD rates.

Public equities

The average annual return for the S&P 500 since its inception in 1928 through 2017 is approximately 10%. Over longer periods, stocks have averaged annual returns of 9% to 10%. U.S. stocks have delivered better returns than most other investment types over the past four decades and have outperformed most investment classes over almost every 10-year period in the past century.

There are two types of stock: 'common' and 'preferred'. Common stock is the most common type, giving shareholders voting rights but no guarantee of dividend payments. Preferred stock provides no voting rights but usually guarantees a dividend payment. Dividends are additional payments made by the company, regardless of whether the stock has lost value on the market, and they are decided and allocated by the company's board of directors.

When investing in public equities, the ultra-wealthy tend to allocate their money to platform companies with pricing power (such as Amazon, Apple and Airbnb), consumer staples, and streaming services.

Frequently asked questions