Here's How The Rich Invest Their Money
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- เผยแพร่เมื่อ 23 ก.ค. 2024
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I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about working with us, please follow this link: go.novawm.com/getintouch
References
I would highly recommend watching the Rational Reminder Podcast episode on Alternatives.
• RR #219 - Expected Ret...
The Performance of Hedge Fund Performance Fees
papers.ssrn.com/sol3/papers.c...
Has Persistence Persisted in Private Equity? Evidence from Buyout and Venture Capital Funds
bfi.uchicago.edu/wp-content/u...
How to Use Alternatives in Your Portfolio
www.morningstar.com/alternati...
RISK WARNINGS AND DISCLAIMERS
Capital at risk. Past performance is used as a guide only. It is no guarantee of future returns. Different funds and asset classes carry varying levels of risk depending on the geographical region and industry sector. You should make yourself aware of these specific risks prior to investing. The property market can be illiquid; consequently, there can be times when investors will be unable to sell their holdings. Property valuations are subjective and a matter of judgement. VCTs, EIS and SEIS should be regarded as higher risk investments. They are only suitable for UK resident taxpayers who can tolerate higher risk and have a medium to long term time horizon. Owing to the nature of their underlying assets, these investments are highly illiquid. Investors should be aware that they may have difficulty, or be unable to realise their shares at levels close to or that reflect the value of the underlying assets. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change. We do not provide tax advice. Any examples used in the video are for illustrative purposes only and you may get less back than the figures shown. This video does not constitute personal advice. We do not take any responsibility for third party websites and content we may link to from this video. Issued on behalf of Nova. Nova is a trading name of Nova Wealth Limited, which is authorised and regulated by the Financial Conduct Authority (FRN: 778951) and is a limited company registered in England & Wales (10739796).
James Shack™ property of James Shackell
Copyright © James Shackell 2024. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.
00:00 The question?
01:25 What are they investing in?
03:30 The Power of Diversification
04:49 Commercial Property
06:17 Property Funds
07:07 Commodities
07:36 Private Equity
10:57 Private Equity Funds
14:00 Hedge Funds
15:32 Conclusion
WARNING! Please please be wary of bots that are trying to impersonate me in the comments. Lately, they have been offering "Coaching courses" and trying to get you onto WhatsApp.
This is not me it's a scam.
I will never try to contact you; you can only get in touch with me via the link in the description of the videos.
My audience skews heavily to older people who are more likely to fall victim to scams. So if you see any comments from bots, please report them. It's really helps to protect others in the community.
Thanks in advance!
There’s a ‘decision’ of the videos is there…? 😂
@@JamesShack yes I've just received an invite to the coaching course, with a WhatsApp number to add lol. I've reported it.
Also there are the bots that comment on their own posts under different accounts in order to fool people into looking up some “advisor”. You can tell it’s happening because the responses don’t sound like how someone would respond to someone else.
How to contact you?
@@jonasking3670yes these are so annoying and to most of us obviously so fake. Mr/mrs so and so grew my £10,000 or doubled it in a month blah blah blah.
If you click on them and report them they get deleted but I guess the bots just re post.
I am a retired institutional fund manager (36 years in the industry). I’ve seen it all from the inside and agree with 100% of what this gentleman is saying. The money that wealthy people put into alternatives is their “fun money” the equivalent of an ordinary person buying a few lottery tickets. They kid themselves that itis diversifcation but it’s just thinly disguised greed and generally what they gain in return they give away in fees…. And that’s the lucky ones. So good to see such sound advice being given.
Plus people tend to focus on making money investing whereas the way to make more money is by increasing or having a good income.
Most of them didn't study and think they'll become rich by trading or investing, at this point it's the same as buying a lottery ticket.
Greed or the feeling of hitting it big. Most of my investments are in index funds but I use a small percentage of my portfolio value and invest in single stocks and alternative investments. I fool myself in thinking maybe I see something people don't see yet. I just want to speculate sometimes. I treat them as a lottery ticket. Sometimes people need some excitement in investing. Nobel Memorial Prize-wining ecnomist Paul Samuelson famously stated that "investing should be dull, it shouldn't be exciting; investing should be more like watching paint dry or grass grow". Maybe I just want to add an expresso in my coffee to get a little excitement but I'm not betting the entire farm on some of my speculative investments.
A good rule of thumb is that if your portfolio is too boring to discuss in social situations, you've done it right.
Haha, I like it.
This made me laugh! Reminds me of my mates reactions when I start telling them about market index funds 😂😂😂
I know a very smart and wealthy guy that worked for NASA. One day I asked him about his investing strategy. He told me “just put everything on the S&P500, that’s it”. 😅
Just one point that needs emphasised. The JP Morgan survey (or similar) of HNWI is a self-selecting group. The richest cohort of individuals (excepting inherited wealth) are typically company owners, rather than those taking income from employment. As such, the stats are always going to show a substantial % of HNWI having their wealth in private stocks, since they are company owners. That’s less of a result of a ‘wealth strategy’ of the HNWI - if you excluded owners of their own companies (as opposed to people with the wealth able to buy into private equity), the mean average holdings would no doubt be rather different.
Other studies I've seen show that wealthy individuals have 70-90% of their net worth tied up in their own business.
I picked this study because it's based on Family Offices which should give us a better understanding of what their "investment" portfolios look like. As demonstrated in the video, it's not that dissimilar from US endowment funds.
If you don’t understand it don’t invest in it…
Agreed.
All my investments are based on what influencers say and I’m up 15% overall despite not understanding a single thing they said
@@jollama precarious
@@niallrunswick938 I’m sure VOO, QQQ, SCHD, VGT, and DGRO are precarious
@@jollama is it sustainable over 40 years?
That last analogy about Federer is a really great point.
It's worth remembering that "The Rich" also invested in Theranos.
Yes, and with Sam Bankster Friedman and Bernie Made-off as well.
Bloody hell.
Right
I will add that 99.9% of the victims of Maddoff's scam were yltra wealthy. But those also were ultra greedy...sad.
They’re rich, that’s why they can afford to lose money! 😂
Great video as always, was wanting to see a video touching on venture capital!
You're very welcome!
Keep up the videos jakey!
Thx James for saying it outright : "People shouldn't consider their homes an investment" thank you very much.
I agree with the simple funds,but ditch the bonds and add a sattelite fund such as a nasdaq tracker.
If you're actually poor and you put your few thousands in index funds you're going to at best have a few thousand dollars that beats inflation. Meanwhile your wages are going down and expenses are going up. Investing is for rich people who have enough money that a modest return actually means something.
@@gorkyd7912 really, I've just done 35% for the last 12 months and my portfolio is over 500k. 15% a year will double every 4.8 years. Your comment is ridiculous.
I'm 49 and earn about £2M ($2.5M) per year and save about 30% in HYSA's. I've been reading a lot of articles mentioning how w0rthless 'cash savings' are in this current unstable economy. Do you suggest I invst in real estate, stocks or Gold?
A consistent 5% return from the bank and US securities sounds better to me than worrying about losing your money if the stock market falls. Also consider financial advisory with the size of your budget.
The issue is most people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt, no offense. In general, Financial Consultants are ideal reps for investing jobs, and at firsthand encounter, since Jan.2020, amidst covid outbreak, my portfolio has yielded massively in ROI, summing up to 7-figures as of today.
@@PapiChulo-t1sPlease can you leave the info of your lnvestment advsor here? I’m in dire need for one
Please can you leave the info of your lnvestment advsor here? I’m in dire need for one
*Jennifer Leigh Hickman* is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
You work for a 40yrs to have $1m in your retirement, meanwhile some people are putting just $10k in a bitcion coin for just fe months and now they are multimillionaires thanks to Charlotte Grace Miller
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
Their
...services are very genius and experienced in the market for over a decade and counting, they changed my life from a poor plumber to a better and middle class family man with 2kids.
The very first time we tried, we invested $1000 and after a week, we received $5500. That really helped us a lot to pay up our bills.
As a beginner what do I need to do? How can I invest, on which platform? If you know any please share.
Really you people know her? I was even thinking that I'm the only one she has helped walk through the fears and falls of trading
Larry Fink says BlackRock’s deal to acquire Preqin could lead to indexing private markets
"Private Equity Firms Are Typically Very Dishonest" th-cam.com/video/r3_41Whvr1I/w-d-xo.html
Always top notch advice James
The only finance influencer people should listen to
Thank you for saying so!
Great video, James! However there is one asset I want your opinion on: farmland. Unlike residential property (over-exposed for most) and commerical property (business cyclic, rich people's fun money, just a sector fund in the case of REITs) it actually does offer a distinct asset class. However, it's extremely hard to get into unless you're a farmer. And as far as I've seen, there's no direct property fund investing in farmland in the UK.
th-cam.com/video/tUe0sB72iRA/w-d-xo.html
Same principle would apply to farmland ;)
While they are stocks, I would think BDCs might be a Private Equity-esque investment? After all, BDCs invest in (or make loans to in exchange for equity stakes) private companies.
They often provided dividend income along with potential for share price appreciation as well.
So, obviously, not the EXACT same thing, but it's a way to gain access and BDCs diversify their holdings, which, by proxy, diversifies your piece of said BDC.
The mantra KISS is usually the best rule to follow.
So for me that is low cost tracker funds in an isa & pension.
The majority of homes in the past 20 years have not beaten Inflation
@@Jeffybonbon Neither has your wage. And as far as homes are concerned: they are all about one thing: LOCATION. Homes in popular locations have absolutely beaten inflation - and then some.
I like this vid.Good insight and interesting..
Something you missed is that the average middle aged person should have a large proportion of their wealth invested in a pension. Mine is definitely worth more than my house. I have no idea how the DB part is invested while the choices given by my employer for the DC part were very simplistic (I chose the World Tracker).
In contrast the U.K's Ultra Rich probably hit their lifetime allowance years ago. Yes I know it has now gone but only recently.
Was expecting to be generic clickbait garbage, but this was actually a very well-informed video! Kudos
Forgot to mention private credit
Do you mean peer to peer lending?
@@MrAlwaysBlue He's likely referring to the bigger picture. These are most likely small to medium-sized companies (SMEs) that need capital for expansion. This could be a startup or an established business experiencing growth. The funding stage could be Series A, Series B, or bridge funding.
In my experience many rich people are directly investing in real estate leveraging debt so they don’t have to pay much tax. I suspect this is more common vs purchasing units in a fund.
really good point. Instead of income and Capital gains, they live on debt, which is not taxable.
Given the high fees of these alternative investments mean most rich investors would have done better just with huge index fund investments, I'd be interested in a video on why they use alternatives given the downsides. Is it really smart for them or do they just get suckered into it by sales? You discuss this a bit at the end but is there more (or more rigorous evidence you could discuss)?
Good point. It wouldn't surprise me if rich people use high risk ventures as tax write offs (assuming some assets create a loss) so that they could offset their losses against capital gains.
You beat me to it. Maybe they are influenced by others in their circle, investing into venture capital funds. Index funds investments would have made a rich person very rich over the last ten years.
Tax breaks
Yeah like rich invest to take losses and you invest for profit, keep dreaming
@@pauliusmatiusovas4102 It depends. Like this year I'm aiming for a loss on farm incomes since that's in a Trust because how that Trust is taxed. Granted I'm doing things like fixing a shed that took wind damage a couple years ago, getting ditches cleaned out and dredged and other land improvements, some of which needs to be done, but given the option of spending it vs. losing 37% to taxes. And if it goes negative this year I can write off other gains in that trust. Now at the end of the year I'm putting all the farms into a LLC vs. a network of the 4 Trusts things current sit in...
What's in the "other"???. I want to know. (The black segment in the pie chart).
I would like to know too, they don't actually specify it in the report.
privatebank.jpmorgan.com/eur/en/services/wealth-planning-and-advice/family-office-services/2024-global-family-office-report
Probably things like collectables.
Too many bots in your comment section but great video as always
Tell me about it
The boy was no longer sleepy, but full of energy and excitement.
Great advise, ignore the fluffy, clever stuff and go for what makes sense.
Excellent summary.
No, do NOT copy them, they invest like this because they are already rich. If you want to get rich do NOT copy them.
^ this.
The ability to afford top Financial Advisors and tax lawyers on-call helps too. 😉
I doubt that, those guys are largely money sucks that cannot beat the index funds.
i've never seen a top-notch financial advisor. they're just money strippers
My model portfolio is 60% VTI, 20% VGIT, 12% VCIT, 8% VMBS. For bonus point guess my state.
Good video, as always. However, I was hoping to learn a bit more about the schemes and structures they use to minimise their tax liability.
James - once again thank you for a clear and well presented video that illustrates whilst we may think the grass is greener... it often isn't.
Hi James, I’d like to see your comments about private credit
Good info, thanks.
Hi James, thanks for all the content I really enjoy all your videos. Recently come across the book lifecycle investing by Ian Ayres and wanted to know your thoughts on this approach. I’m 27 and have some time till retirement. A leveraged approach makes sense in a lot of ways seeing as I don’t actually need to access my pension for 32 years. Was wondering if you might consider making a video on the topic? Keep up the great content - thanks!
Hi Andrew, I have not read the book, but I am familiar with the idea.
How are you thinking about getting that leverage?
Hi James, thanks for replying. Just to be clear, I haven’t committed to this yet as you can imagine I’m naturally sceptical. So far all I have come across is multiplied ETFs such as SSO/ TQQQ. The expense ratios are high at 0.95% (relative to global vanguard trackers) but that seems low vs loan borrowing. My other query was around the feasibility of leverage in a high interest market. Honestly I don’t know the best way to facilitate it and wondered if it’s a subject you are asked about enough to make a video on?
Cheers again!
@@andrewbatey2636 Leveraged ETFs are dangerous and not the same as a leveraged portfolio, they're designed to be held in the very short term not long term. Research volatility decay.
There are a handful of hedge funds I absolutely would love to invest in. The only problem is I don’t meet the $10 million minimum investment requirement 😂
Haha exactly.
Consider yourself lucky.
Most Hedge funds have a long history of hitting the big time for one year Out of 10 or 15 years and making 116% return, And then go on a nine year run of losing 15, 18, 22, 27% etc
@@g.t.richardson6311 And bragging about their one time hit to get more investors.
Superb video you should do more
Thank you, I will
Thanks I bought Kardden and I can't be more happy about it
Nice one, James.
Thank you.
Great video. What Is the wealth threshold used here to be deems part of "The Rich"?
see 2:50, $50m+
@@Whoop0 Missed that, thank you
Brilliant video, thanks James, so very helpful!
Thanks for another great video. Always good to see the big picture from the eyes of a professional.
Glad you enjoyed it Chuck.
@@JamesShack Guess who is re-retiring next year and moving to Europe?! Waiting to see the new NHR details from Portugal. It's now down to Puglia, Italy or the Algarve in Portugal.
@@chuckmurray1825 congrats! They’re all great choices.
Nice little video!
You are the best!!! What a wonderful, informative video 🎉
I think some of this irrational behaviour at least is driven by two things: 1) hiding/disguising what you have and 2) gaming the tax systems of the world
@GrahamStephen¹²⁸¹³¹⁷⁵¹⁴⁰ Thanks M8! Have you ever looked up the meaning of the words "sad w*nker"?
sound advice James - and I couldn't agree more
My wife and I are 75. We have always invested 100% in stocks. The broad market.
We set a goal for the annualized return. The broad market gave us that and more. There was and is no need for us to look for other investments.
The investment strategies that worked for boomers in the most prosperous decades in world history are unlikely to continue working for their children.
You have done good as of today, pray you get to keep it! You made it to the top, don’t fall off, it’s a long way down.
Good informative video. Thanks.
Glad it was helpful!
Whoever says copy, what a bad idea. Never copy.
Good information. Thanks
Glad it was helpful!
Great video and clear explanation. Thank you
What about PMs? BTC? Also, are most financial assets in reality highly correlated?
Putting money into BTC isn’t investing, it’s speculation which is more akin to gambling. Don’t put any more money into it than you are willing to lose.
@@daleal7250 You do you buddy.
4 million private landlords may disagree..
Very articulate. Point. I've been saying this (with a few extra insights which I am not going to share with a competitor 🙂 ) from the late 80's.
6:35 spotted the moment when James had his 3rd glass of wine. 😅 Great video as always James, thank you.
Someone else has called this out, but I still can't see it! What's the mistake ?
@@JamesShack Just the minor spelling mistakes in the 'low investment minimums' line. Sorry for being a pedant!
James, at 5:04 you mention that a home isn’t an investment, and I think a video on this would be very interesting. For instance, does your home equity contribute to your net worth, and should your mortgage be subtracted from this? Is your house "more of" an investment if you intend to sell it and downsize in later years? Etc etc.
Yes, it could be interesting. I would just need to think of a catchy title and thumbnail, which is hard!
How do we report them James?
The three dots next to the comment.
@@JamesShack Thanks, have now reported.
EIS and VCT - indeed, the UK Tax regime encourages investment into these vehicles, which could be appropriate for my Scottish friend Cliff Barrie. Thanks David.
You can't invest like the rich when you are just starting out and don't have much money. Some investment types have minimum
amounts you have to deposit.
I agree with the points made in this video but the comparison of the average investor to the wealthy investor should be tempered by the wealthy investor likely having acquired their wealth from starting a private company and then buying valuable property. One would therefore expect these to be a major part of their investment and have nothing to do with choice on their behalf.
For Private Equity, best for avg investors is BX, KKR, ARES, & OWL and BDCs like ARCC, MAIN, CSWC, FDUS, OBDC...On Hedge funds, I like when Buffett challenged any Hedge fund Mgr vs the S&P 500 over 10yrs he would give them $1M.....Buffett won.
couple spelling errors on the slides, watch out
The advisors are sending them into these other categories because they get paid higher fees. For the long term be in a low cost broad based equity fund/etf
What about debt?
Is the glitch in the matrix at 6:39 to prove you’re not AI or just a sign you’ve not employed that video editor yet?!
No edit yet. Even I can’t see it …?!
The longer I have been into investing as salary increases etc the more I am favouring simplicity.
All world Etf in an isa, some cash savings accounts and obviously heavily into S&S SIPP with higher rate salary.
My individual stock picks have not really done better than S&P. And when you at in time, effort, keeping up with news etc... It's just not worth the hassle.
The mega rich live in a different world. Cant really apply same logic to the average person.
Stock picking can be challenging. For most investors, broad-based index ETFs are an excellent way to build wealth. However, if you enjoy researching companies and allocating a small portion of your portfolio to individual stock picks, it can be an engaging and potentially rewarding experience. That's my approach - using a small percentage to make informed bets and add a touch of excitement to my investment strategy. For example, I was fortunate to recognize Apple's potential in the mid-2000s and invested a small amount that has grown significantly.
Why are you picking on Federer?
Well for a start anyone who wears their own merchandise deserves picking on in my book - racquet(eering) notwithstanding 😊
Look at what big investors want and what they don't yet have. Just buy small positions in small companies that often get bought by larger companies. For example, the mining industry in australia will likely produce a large amount from manufacturing materials for EV techonology. Blackrock and Vanguard's competitors are buying those companies namely China and their companies, so stands to reason they might want them in the near future.
"sledge hammer to knock in a nail" lol that is a great analogy
Guy in the advert looks like Gordon Ramsay
So, just going for stocks, bonds and real estate is the most simple way to build wealth and be mostly well diversified?
@JamesShack_info Begone bot!
Whenever James says the word "however", be wary. When he says it several times, alarm bells ring!
The average Joe doesn’t belong in hedge funds and limited partnerships.
Anyone here know the answer to the following. I earn £63,000 a year. I have a SIPP already set up. I also have a workplace pension. The workplace pension does not offer a salary sacrifice option, the employer will not match my pension contributions.
I want to keep the workplace pension and contribute 5%, so that I can get the 3% employer contribution.
But as I don't get a salary sacrifice option with the workplace pension, is it possible to set this up with my already existing SIPP?
Investing is two things- 1-buy low, sell high; 2-repeat #1.
And automate it 😊
Rich people, in general, use risk diffusion and hedging in their investments, which helps them navigate through difficult situations where regular people might panic and sell at a significant loss.
Surely scale is a key detereminant of success.
Man if I knew how to edit videos I so would have gone for your video editing job haha! Keep up the good work, really enjoy all your vids
Glad you enjoyed it!
Coinbase listing Kardden Binance probably in line too
Curious what your thoughts are on these new options based ETFs such as JEPI of GPIQ? They own an index (e.g. S&P500 or Nasdaq) and use options (selling covered call and puts) to produce income (like 10% or more a year). What's encouraging is they don't have insanely high fees, most are less than 0.50%. These may have a diversification advantage in that their performance will be different from a traditional stock or bond fund. This is similar to what some hedge funds do for ultra wealthy investors but without the high fees. So exposure to stock market, high income, and low fees.... they have a lot of potential but also sounds almost too good to be true. Am I missing something? Do we know how these funds would perform in a bear market for the stock index they track?
Regular people invest to make money. Rich people have a financial advisor to KEEP and not lose their money. Very different.
Could just buy government bonds for a guaranteed 4-5%, in that case…
Except rich footballers… they seem to invest to keep rich people rich without risking their own money..
That's because they already have a lot of money.
Most of us plebs are just trying to get that elusive goal of buying a house.
If I was rich, I'd own at least 2 properties.
One for my own, the other as investment.
@@stevenrix7024 That 4-5% will be down to 2-3% in a year or less.
Thank you James. I really appreciate the time you take to make these videos. They are excellent, and have stoked a real interest in me as regards my own financial planning. I particularly like the honesty of your videos. They helped me to gain sufficient knowledge and to feel informed enough to seek out a Chartered Financial Planner circa 8 months ago. At the start, I must confess that I had a nagging suspicion that they might try and persuade me to invest in some of these higher-risk and impenetrable (to the lay person at least) products, which, thankfully, was not the case. In fact, its been a really good experience for me so far. Looking forwards to your next video and sorry the 'Fulham investment' hasn't been great - yet!.
Thank you for taking the time to comment, and all the best with your financial planner !
Have you thought of doing a podcast?
I have, but I'm not sure about the format.
I would love to do a version where we actually do financial planning/coaching live with guests. In a similar way to Ramit - th-cam.com/video/iQq7xu0yRmI/w-d-xo.htmlsi=MsHtQiCEA7r3imQg
However, I'm unsure if Brits would volunteer to come on a show and share their financial information. Americans are often up for that kind of thing, but Brits are less so.
I need to test it.
3:33 "Investing is not just about trying to get the best possible return. It's about trying to deliver the best possible return for a given level of risk."
If 'risk' means volatility here, as it usually seems to when investments are being discussed, then I don't understand why the rich should care about it at all. The market value of their investments could drop by 90% and stay there for years, and it wouldn't impact their day-to-day standard of living one jot. So why not just go for the best possible return over the longer term, and to hell with the shorter-term volatility ie risk?
ah yes, you essentially say exactly this seven minutes later...
The rich are normally saving for multiple generations, not just them. Their kids won't have anything if they've blown it all on overly risky investments.
They might have different goals and objectives. Some will be looking for more capital preservation as opposed to outright returns.
The other thing they can do is use leverage which is much more effective if you have a portfolio with a good risk adjusted return.
@@Whoop0 That's why I began with the conditional "If 'risk' means volatility..." In this sense, which is what risk almost always means when discussing portfolio return vs risk, a high-risk portfolio isn't defined as one which has a greater than usual probability of dropping to zero value. It is simply one whose short-to-medium-term fluctuations in value are unusually high (as a percentage of the given value at any time). But for a rich investor, with plenty of liquidity to service his/her day-to-day needs, this should not be any kind of an issue. So s/he should be able to focus on higher return over the longer term, and ignore shorter-term risk (volatility) altogether. This will be even more the case if the time frame in question extends over multiple generations.
So the take home here is, "we shouldn't try and be Roger Federer and Roger Federer should not try and be Roger Federer"
Thank you for the great video!
Great video! Thanks for the information
The rich actually invest in their own business, expand existing ones, and take over majority control of million and billion dollar business like they're their own fund managers.
Very well done and sound advice. Once you get to where you can retire or close to it, you want to preserve your capital. Don't take unnecessary risks. One other investment to consider if you are at retirement age is an IRA with a fixed annuity as part of the investment. I locked in 5.5% for five years. Safe with no risk and no tax hit.
Key takeaway: Roger Federer is irrational :)
Maybe a good Multi Asset Fund should be the first port of call for the average man in the street.
For the super wealthy it is more about "wealth preservation" than finding the next Microsoft to achieve stellar growth. They already did that. Making a huge amount of money is one thing, hanging on to it is something else.
Great video and very eye opening. Well done and thanks for educating viewers.
Glad you enjoyed it!
This video was worth my time, thank you.
Also plenty of wealthy families have ended up a lot less wealthy through taking the wrong risk with too much of their money......
Very true. The Missing Billionaires is a great book on the premise that in 1900 there was something like 4000 millionaires in the US, and therefore you would expect there to be way more billionaires in the world today, if only they had invested that money conservatively.
But so many families miss manage their money.
sure but the problem is that when you are not rich you can't spread your money as much
A huge difference is dividends. 2% on $200 is $4. That barely covers round trip commissions on an options play. 2% on 2mil is 40k. That’s a big difference! Investing isn’t based on total income it’s based on a fraction of disposable income.
A 50k lifestyle when earning 55k leaves a small percentage of 5k to invest.
Very different if you have a large dividend financing most of your living expenses.
63k invested atm, with 1.5k in annual dividends. Hope to see that snowball grow.
Rich people already have plenty of money and don’t need to build wealth, they just want to conserve it. So they’re gonna go for less risky assets, but for the rest of us we still need to build it.
Exactly, if they already earn 500k+ after several years or earning it, it’s really about keeping that cash safe and away from taxes and messy divorces. The rest of us are trying to turn 100k into 1 million, which is why a lot of us lose money.
That last chart showing Risk/Return of Stocks & Bonds with Hedge Funds shows how hilariously blunt and to the point that data can be. Those fees are doing what for me??