Where are Billionaires Investing Their Money in 2022? is such an interesting question and one that demands further inspection. Some months before the pandemic, Pulitzer Prize-winning novelist Liaquat Ahamed published an article in The New Yorker with a provocative headline: “The rich can’t get richer forever, can they?”
The answer to Ahamed’s inquiry has been a loud yes in the two years of what now feels like a post-apocalyptic nightmare following endless lockdowns and a deluge of terrible news. The wealthy can – and do – become even more fabulously wealthy. There isn’t a single tax law in the world that can stop them.
According to data from the Bloomberg Billionaire Index, the world’s five wealthiest persons added a massive US$240 billion in wealth between them in 2021, bringing their total wealth to US$917 billion.
Elon Musk of Tesla, Jeff Bezos of Amazon, Bernard Arnault of Louis Vuitton, Bill Gates of Microsoft, and Larry Page of Alphabet have amassed a fortune of nearly $1 trillion, equal to the size of the Dutch economy.
But what is it that these multi-billionaires have been doing to get so much richer? Where are they investing their money in 2022? And what could the everyday investor learn from all of this? That’s what we are going to take a closer look at here.
Before we get started, here are some interesting tidbits you might be interested in (and might be impressive tidbits of trivia to share)
- For the first time in history, the world’s top ten wealthiest people all became centibillionaires, meaning their total fortunes all contained 12 digits.
- Elon Musk has surpassed Jeff Bezos as the richest person alive, with a fortune of US$274 billion, thanks to a significant rise in Tesla’s stock price.
- Larry Page, who co-founded Alphabet subsidiary Google, entered the top five of the worldwide rich list for the first time.
- Warren Buffett, the CEO of Berkshire Hathaway, continues to fall in the rankings; he was ranked #6 in 2020 and is now at #9.
- Eight of the top ten billionaires in the world are technology CEOs or founders.
So what have the wealthiest of these people – well, men, as no women have yet to crack the top ten billionaire’s list – been up to in order to continue to make money in fistfuls? Here’s a closer look.
Where are Billionaires Investing Their Money in 2022?
Cash and Savings
Billionaires are notorious for being thrifty. They usually don’t spend excessively because it would prohibit them from building their fortune. They spend on basics and occasional extravagances, but they also save and expect the rest of the family to do the same. While billionaires may occasionally be seen splashing out – Bill Gates’ daughter’s recent wedding was likely not cheap – real estate aside (more on that later) – the richest people in the world are rarely seen being hugely extravagant.
Where are Billionaires Investing Their Money in 2022?
Stock Funds and Global Equities
Although many billionaires trade in the stock market, we must remember that they are in a very different situation than the rest of us. One reason is that they have the financial means to take more risks. A complete loss of investment is unlikely to jeopardize their future financial security or comfort. They can afford to take more chances because they have so much money.
Ultra-wealthy investors may control one or more significant corporations. Many billionaires, on the other hand, only own a few stocks. Index funds are popular among investors because they provide good returns and do not require management. They are also well-diversified and charge moderate management fees.
Billionaires are drawn to dividend-paying equities because of the passive income they provide. Some investors are more concerned with creating current income than capital appreciation, in addition to capital appreciation.
Gates has received more than $50 billion in dividends and stock earnings since 2004, including a $3.3 billion payout from Microsoft, where he owns approximately 1% of the firm.
Where are Billionaires Investing Their Money in 2022?
Real Estate
Real estate is often where billionaires do invest a great deal of money. Billionaires have always considered real estate investing to be the ideal location to invest their money. The major residence is purchased first, followed by secondary residences, usually for tenants. They’ve started buying commercial real estate, such as hotels, stadiums, bridges, and office buildings, after purchasing some personal real estate.
Many billionaires, including Larry Ellison, have significant real estate holdings. In recent years, Ellison has progressively increased his real estate holdings, amassing a portfolio worth more than $1 billion.
Real estate agents bring these billionaires deals as soon as they establish themselves as buyers, and financing becomes easier.
Large investors put millions of dollars into real estate. For the average investor, real estate is often not an immediate cash-flow investment they can base their life around, but it is a good one for the long term and a tried-and-true investment for billionaires since it generates passive income.
Steven Cohen and Ray Dalio have joined the crypto frenzy, putting their money into bitcoin and other digital currencies in the hopes of diversifying their financial portfolios. Elon Musk, the richest man on the planet, owns Bitcoin, Ethereum, and Dogecoin.
Since 2011, Bitcoin has grown by more than 20,000,000%, making it one of the most successful financial assets ever.
If you want to make money in crypto, you’ll have to be willing to take considerable risks, which several billionaires, such as Warren Buffet and James Dimon, have declined to do. Despite this, only a small percentage of the world’s wealthiest people use their money to participate in such markets.
Where are Billionaires Investing Their Money in 2022?
Commodities and Alternative Investments
As well as being stores of value, commodities, such as gold, silver, mineral rights, or cattle, are also hedges against inflation and are a feature of some of the investment portfolios of the uber-wealthy. Other billionaires make investments in art, diamonds and wine, as well as less usual alternative investments such as music publishing rights.
Can you invest like a billionaire in 2022? Not at their levels perhaps, but you can see that even they seem to follow the advice that you should have easy to convert to cash savings on hand. You should diversify your portfolio, and consider working with an investment advisor who can help you make the most of your assets, even if they are nowhere near as large! We hope you have found this an interesting read, to progress your enquiry into this call one of our Professional Independent Investment advisors to find out more today.
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