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Where do millionaires keep their money? High net worth individuals put their money into various classifications of financial and real assets, including stocks, mutual funds, retirement accounts and real estate. Most of the 20.27 million millionaires in the US did not inherit their money; only about 20% inherited their money. More than two-thirds of all millionaires are entrepreneurs. Here are some places where the truly rich keep their money.

Whether you’re a millionaire or not, a financial advisor can help you take important steps toward achieving your goals.

Cash and cash equivalents

Many, and perhaps most, millionaires are frugal. If they spent their money, they would have nothing to increase wealth. They spend money on necessities and certain luxuries, but they save and expect the same from their entire family. Many millionaires keep a large portion of their money in cash or highly liquid cash equivalents. They create an emergency account before they ever start investing. Millionaires bank differently than the rest of us. Any bank accounts they have are managed by a private banker who probably also manages their assets. There is no queue at the ticket office.

Research shows that millionaires have on average 25% of their money in cash. This is to offset any market declines and have cash available as insurance for their portfolio. Cash equivalents, financial instruments that are almost as liquid as cash. are popular investments for millionaires. Examples of cash equivalents include money market funds, certificates of deposit, commercial paper, and Treasury bills.

Some millionaires keep their money in government bonds, which they continue to roll over and reinvest. They liquidate them when they need the money. Treasury bills are short-term bonds issued by the U.S. government to raise money. Treasury bills are usually purchased at a discount. When you sell them, the difference between the face value and the sales price is your profit. Warren Buffett, CEO of Berkshire Hathaway, has a portfolio full of money market accounts and government bonds.

Millionaires also have zero balance accounts at private banks. They leave their money in cash and cash equivalents and write checks on their zero-balance account. At the end of the business day, the private bank, as custodian of their various accounts, sells enough liquid assets to pay off that day. Millionaires don’t worry about FDIC insurance. Their money is in their name and not in the name of the private bank.

Other millionaires have safes full of cash in many different currencies. These vaults are located all over the world and each currency is kept in a country where transactions involving that currency are conducted.

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Luxury houseLuxury house

Luxury house

For more than 200 years, real estate investing has been the most popular investment for millionaires to preserve their money. Over all these years, real estate investments have been the main way millionaires have built and maintained their wealth. The trend started with buying a first home and then other homes, usually for renters. After purchasing some personal real estate, they started buying commercial real estate, such as office buildings, hotels, stadiums, bridges and more.

Millionaires often have large real estate portfolios. Once they establish themselves in the real estate market as buyers, real estate agents start offering them deals and they can easily obtain financing. Major investors have many millions tied up in real estate. Real estate is not an investment that you depend on for cash, but it is a lucrative investment in the long run and a proven investment for millionaires because they like passive income and find that real estate provides that.

Shares and equity funds

Some millionaires are all about simplicity. They invest in index funds and dividend-paying stocks. They like the passive income from stocks, just as they like the passive rental income that real estate produces. They simply don’t want to spend their time managing investments.

Ultra-wealthy investors may have a controlling stake in one or more major companies. But many millionaires have a portfolio of just a few stocks. Many may hold index funds because they provide decent returns and you don’t have to spend time managing them. They also have low management fees and excellent diversification. Millionaires also like dividend-paying stocks for the passive income they provide. Of course, they are also interested in capital growth, but for some that is less of a concern than generating current income.

Private equity and hedge funds

Unless you are a multi-millionaire, you should not join a hedge fund or buy a private equity fund. Public shares are known because their shares are traded on the stock exchanges. One of the advantages is liquidity. You can easily liquidate your public shares or stocks. Private equity funds, on the other hand, usually source their investments from large organizations such as universities or pension funds. Investors of private equity funds must be accredited investors with a certain net worth, typically at least $250,000. Accredited investors can be either individuals or organizations, but are defined by regulations. In other areas, private equity funds do not have to comply with as much regulation as public equity funds. Some ultra-wealthy, if they are accredited investors, invest in private equity.

Hedge funds are not the same as private equity. Hedge funds use pooled funds and follow different strategies to achieve outsized returns for their investors. Hedge funds invest in whatever fund managers think will deliver the highest possible short-term returns.

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Raw materials

Commodities, such as gold, silver, mineral rights or livestock, to name a few, are also valuable storehouses for millionaires. But they require storage and have a level of complexity that many millionaires simply don’t want to deal with.

Alternative investments

Wheel and binnacle on a beautiful wooden sailing yachtWheel and binnacle on a beautiful wooden sailing yacht

Wheel and binnacle on a beautiful wooden sailing yacht

Some millionaires, like the ultra-rich, keep some of their money in other alternative investments, such as material possessions such as fine art, expensive musical instruments or rare books. There are also millionaires and ultra-rich people who invest in intellectual property rights, such as the rights to songs or films. These can be very lucrative investments.


It is estimated that there are approximately 100,000 cryptocurrency millionaires, the majority of whom own Bitcoin. To try to make a fortune in cryptocurrency, you have to be willing to take some risk, and many millionaires have no appetite for risk. You can take a small portion of a millionaire’s wealth and invest it in one of several cryptocurrencies. Many people have become millionaires this way. Some have lost their money. Cryptocurrency is increasingly accepted as a legitimate investment worthy of consideration when accumulating wealth.

It comes down to

Millionaires have many different investment philosophies, so it’s difficult to generalize about where they keep their money. However, all of the above are legitimate investments for millionaires. They want to reduce their risk, which is why many prefer diversified investment portfolios. More than one of these investments can be combined to increase prosperity.

Tips about investing

  • Would you like to investigate how your investments are growing? View SmartAsset’s free investment calculator.

  • Do you have questions about how to start investing? It is wise to first consult a financial advisor. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisors for free to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

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