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To be clear, billionaires are by no means avoiding investing in stocks, but you may be under the impression that Wall Street is the primary way they grow their wealth. . The richest 1% own an estimated 43% of the world’s financial assets, and while they have plenty of options to diversify beyond the stock market, there are many other areas where their money is concentrated. There are.
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The world’s financial elite is diversifying their portfolios in ways that go far beyond traditional routes. Let’s take a closer look at the surprising investment habits of the 1%.
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Alternative assets are essential
While art and luxury collectibles such as cars and airplanes have long been considered an alternative investment for the ultra-wealthy, the market for rare items has expanded dramatically. Wealthy investors are pouring millions of dollars into buying rare paintings, vintage cars, and unique memorabilia as if they were adding something to their grocery list.
The basic strategy for these luxury goods appears to rely on them increasing in value over time and, in some cases, providing better returns than stocks. With global uncertainty, investors are finding comfort in tangible, unique assets that can maintain or grow in value during volatile markets. Here are some examples of our extensive collection.
François Pinault: His art collection includes more than 2,500 works, including works by Mark Rothko, Jeff Koons, Damien Hirst, and more. His collection is valued at approximately $1.4 billion.
Ralph Lauren: He has a collection of rare vintage cars worth about $600 million.
David Geffen: His collection is estimated to be worth a whopping $2.3 billion.
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Featured (climate) products
Billionaires invest in a variety of products, and while some, like gold and silver, will never go out of style, sustainability, food safety, and agriculture appear to be areas of growing interest for the ultra-wealthy. Farmland is not only a hedge against inflation, but also a bet against rising global demand for food due to population growth.
Sustainable farming practices, organic farming, and even regenerative agriculture have become a focus for wealthy individuals who want to profit while promoting environmental stewardship. Some billionaires like Bill Gates have made headlines for investing heavily in agriculture, and this trend shows no signs of slowing down.
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Some investments are out of this world.
When Jeff Bezos and Elon Musk made their infamous and famous foray into the space race, many viewed their adventure as a personal passion. However, private space exploration is rapidly becoming a new frontier for investment. The wealthy are supporting projects related to space travel, satellite technology, and even asteroid mining for rare minerals.
Space-based industries are expected to be worth trillions of dollars in the coming decades, as new technological advances make space travel more accessible and commercially viable. The 1% sees space not just as an adventure, but as a highly profitable investment opportunity.
Real and virtual real estate
Yes, for those who spend a lot of money, it often comes down to location, location, location. Although the housing market has become unaffordable for average buyers, billionaires often put their money toward their homes and other real estate. Here are some examples of luxury accommodations.
Ellison Estate: Located in Woodside, California and owned by Larry Ellison, this property was an estimated $200 million investment.
Xanadu 2.0: Bill Gates knows how to invest, and the market value of this asset of his is around $130 million.
Antilia, Mumbai, India: This 27-story, 400,000-square-foot skyscraper is owned by Mukesh Ambani and is estimated to be worth nearly $2 billion.
On the other hand, the rise of the metaverse is opening up entirely new markets, especially in virtual real estate. Imagine owning land in a digital world where people can socialize, work, and even trade.
Big brands are starting to establish a presence in these digital environments. Although still in its infancy, as more and more people spend their time in virtual worlds, this industry represents an untapped opportunity for smart investors to stake a claim on the future of the internet.
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The bottom line is that while traditional investments such as stocks and bonds have always been part of the wealthy’s portfolios, the 1% are increasingly turning to innovative and sometimes surprising assets to grow and maintain their wealth. It means that you are doing it.
From rare collectibles to farmland, the 1% is adapting by investing in assets that reflect the greatest opportunities and challenges of the future.
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This article originally appeared on GOBankingRates.com: You’ll never guess what the 1% is investing in right now — hint, it’s not just stocks
