The Richest People: Their Investment Strategies And Secrets

The world's richest people have a lot in common, but one of the most notable is that they have more than $100 billion to their name. The very top billionaires have more than $200 billion. These sums are not kept in cash in a bank but are largely invested in some of the largest publicly traded companies.

The top 5 richest investors in the world are Elon Musk, Mark Zuckerberg, Warren Buffett, Carl Icahn, and Peter Lynch. These investors have all made huge profits from their strategic investment moves and calculated risk management approaches. They differ in their approaches to the market, with some employing a more aggressive investment strategy, while others are more traditional and risk-averse.

The world's wealthiest individuals invest in a variety of things, from stocks and shares to office buildings, art, crypto, and even gold. According to Knight Frank's 2023 Wealth Report, stocks and shares are the biggest individual contributors, with 26% of the average UHNWI's portfolio held in equities. About 5% of their portfolios goes to investments of passion like art, cars, and wine.

Billionaires are often frugal and save a lot of their money in highly liquid cash equivalents. They can also afford to take more risks with their investments. Many billionaires have also favoured real estate investing as their best place to keep their money.

Other investments of the world's richest include commodities such as gold, silver, and cattle, as well as alternative investments such as fine art, musical instruments, and rare stamps.

Commercial property

There are several reasons why commercial real estate is an attractive investment option for the wealthy:

Steady Cash Flow and Income: Commercial properties provide a steady cash flow through rental income from tenants. This income can be reinvested into the business or used to diversify an investment portfolio. It also allows investors to maintain their wealth instead of depleting it through purchases of diminishing assets such as cars, clothes, or expensive vacations.

Long-term Returns: The rich tend to think long-term and seek assets that offer reliable, sustainable returns over time. Commercial real estate has been a consistent source of cash flow from rents generated by multifamily, office, retail, and warehouse leases.

Appreciation: Commercial real estate values tend to increase over time, outpacing inflation. This is because commercial properties have intrinsic value derived from their productive qualities. As a result, commercial real estate can appreciate independently of inflation and provide returns that outpace it.

Tax Benefits: Commercial real estate ownership offers various tax advantages, such as deductions for depreciation, mortgage interest, and expenses. These benefits help preserve more of the investor's wealth.

Diversification: Commercial real estate can diversify an investment portfolio, especially for those who traditionally invest in stocks. It provides stable income when the stock market goes down and can be a hedge against inflation.

Lower Risk: Commercial properties often have multiple tenants with long-term leases, guaranteeing steady income for landlords. The illiquid nature of commercial real estate also shields it from short-term market fluctuations and irrational movements.

Demand: Commercial real estate meets fundamental human needs for spaces to live and work. This demand is expected to continue, providing ongoing opportunities for investment and wealth creation.

Equities and stocks

Equity investments are made by purchasing shares of a company on the stock market, typically through a stock exchange. These shares are expected to rise in value, resulting in capital gains for the investor. Shares can also generate capital dividends. The main benefit of equity investments is the potential to increase the value of the principal amount invested, which can be achieved through capital gains and dividends.

There are different types of shares that offer varying rights to investors. Common shares, for example, give shareholders the right to vote on certain matters and entitle them to a share of company profits. In contrast, preferred shares combine the properties of equity and debt, prioritising dividend payments and liquidation claims over common shares. Another type is convertible preferred shares, which can be turned into common shares after a certain period.

When building an equity portfolio, investors should consider their risk tolerance, financial position, and expected future financial needs. Diversification is key, and it is recommended to choose companies from different industries, sectors, and geographic markets.

Some of the richest investors in the world include Elon Musk, Mark Zuckerberg, and Warren Buffett. Their immense wealth is built upon owning successful companies and investing in equities.

Private equity and venture capital

Some prominent examples of individuals who have achieved significant success in private equity include:

• Leon Black, co-founder of Apollo Global Management, with a net worth of $14.3 billion as of April 2024.
• Steve Schwarzman, CEO of Blackstone Group, with a net worth of $1.3 billion.
• George Roberts, co-founder and former CEO of KKR, with a net worth of $12.5 billion.

Venture capital has also played a pivotal role in the success stories of numerous tech giants. For instance, Peter Thiel, Facebook's first angel investor in 2004, turned his initial investment of $500,000 into $638 million when the company went public eight years later.

Overall, private equity and venture capital offer the wealthy opportunities to invest in promising companies that are not yet on the stock market, providing potential for substantial returns.

Passion investments

The benefits of passion investing include the enjoyment and pride of owning unique items, as well as the potential for financial gains over time. Passion investments can also help diversify an investment portfolio, as they tend to be non-correlated with traditional investments. According to a Knight Frank survey, about 5% of the portfolios of ultra-high net worth individuals (UHNWI) go towards passion investments.

When considering passion investments, it is essential to remember that these items are subject to supply and demand, and their value can fluctuate significantly. Additionally, there are risks involved, such as fraud and forgery, especially with artwork and fine wines. Building a collection of passion investments takes time, and it is recommended to start slowly and seek guidance from experts in the specific category of interest.

Cryptocurrency

The world of cryptocurrency is volatile, and fortunes can be made and lost quickly. Some of the world's richest crypto billionaires were early adopters of blockchain technology, while others developed, innovated, and cashed in later.

Who are the world's richest crypto investors?

• Changpeng Zhao is the founder of Binance, the world's biggest cryptocurrency exchange by trading volume. As of June 2024, his net worth was estimated to be $67.8 billion.
• Brian Armstrong founded Coinbase, North America's biggest cryptocurrency exchange by trading volume. As of December 2024, his net worth was estimated to be $14.7 billion.
• Michael Saylor is the CEO of MicroStrategy, a firm that has turned into a bitcoin investment vehicle. Forbes estimates his net worth to be $10.2 billion.
• Giancarlo Devasini is the CFO of the cryptocurrency exchange Bitfinex and Tether, a popular stablecoin. He owns an approximate 47% stake in Tether, and his net worth is estimated to be $9.2 billion.
• Chris Larsen is the co-founder and executive chairman of Ripple. He also co-founded the online mortgage lender e-Loan, which was later sold to Yahoo. His net worth is estimated to be $4 billion.
• The Winklevoss Twins, Tyler and Cameron, are the founders of the crypto exchange Gemini and were early investors in Bitcoin. They are estimated to own roughly 70,000 bitcoins and are each worth $2.7 billion.
• Matthew Roszak co-founded Bloq, which helps banks store crypto and facilitates stablecoin transactions for companies. He is worth $1.8 billion.
• Fred Ehrsam co-founded Coinbase, which became the largest cryptocurrency exchange in America. He owns 4% of the company and is worth $2.1 billion.
• Tim Draper is a venture capitalist and founding partner of Draper Fisher Jurvetson. He made his money on a large blockchain bet when he bought 29,656 bitcoins from the US Marshals after the shutdown of the black market website Silk Road. He is worth $2 billion.
• Nikil Viswanathan co-founded Alchemy, a company that thousands of blockchain and Web3 companies rely on. He is worth $1.5 billion.
• Joe Lau co-founded Alchemy in 2020 and currently owns a 26% stake. He is worth $1.5 billion.
• Jed McCaleb founded the first legitimate cryptocurrency exchange, Mt. Gox, in 2010. He also co-founded Ripple and is worth $2.9 billion.
• Changpeng Zhao is the founder of Binance, the world's biggest cryptocurrency exchange by trading volume. As of September 2024, his net worth was estimated to be $56.4 billion.

• Bitcoin is the original cryptocurrency, created in 2009. As of January 2025, its market cap was $1.86 trillion.
• Ethereum is both a cryptocurrency and a blockchain platform. As of January 2025, its market cap was $396.38 billion.
• Tether is a stablecoin, meaning its price is anchored at $1 per coin. As of January 2025, its market cap was $137.57 billion.
• XRP was

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