Where do Rich People Store Their Money to Keep it Safe (Not What You Think)
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- เผยแพร่เมื่อ 2 มิ.ย. 2024
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Where do rich people keep their money? What are the safest options for money storage out there? Which countries are best for keeping large amounts of cash? Which banks are best?
Countries that come to mind are Cayman Islands, Switzerland, Singapore, UAE, UK, USA, etc. Swiss banking is among the most famous when it comes to wealth preservation and storage. London and Dubai are among the most famous cities for banking, and many are keen on keeping their wealth there.
But what about banks? There is a list of the safest banks in the world. Some of them are very well known and reputable institutions.
But when it comes to real wealth, let's say billionaire wealth, most of that wealth will not be stored in banks, but in assets. No matter how reputable a bank is if it goes under you will lose most of your money, and only get back an insurance deposit backed by the government. This is usually a quite low amount, which is negligable.
This is why it's a better idea to keep your funds to store money in a brokerage account than in a regular bank account. In this case your money will be quite safe, no matter what happens with the institution.
On top of this lots of wealthy people will buy real estate assets.
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The Canadian government also froze citizens' bank accounts for people who donated to the truckers' convoy! They really crossed the line with that.
Which is why I'm leaving Canada. And the lockdown plus vaccine mandates. Hell no
Yes, if this central bank digital currency is not stopped, then what happened with the truckers will look liker childs play. We will lose all of our freedoms, well we will lose what we have left I should say. Pray that people will wake up and stand up for our freedoms and for what is right. Start using CASH....then use more CASH ! Peace and blessings
The Canadian government is a comunist government
no they didn't - the froze the donation account for those rednecks who broke the law, just be a law-abiding citizen and you will be fine.
Great video. That's exactly how things are. THANK YOU!
Beyond the segregation of assets, brokerages also have higher deposit insurance than banks do. E.g., IBKR LLC claims they have $500k of SIPC coverage plus an additional $30M of coverage per account through Lloyds. Much more than the $250k FDIC coverage in US bank accounts.
Interesting and helpful information - thank you
A pleasure!
Anything you'd like to see next?
Good work sleepy.
Not only is your information spot on and highly valuable you are interesting to listen to. Great stuff! Thank you!!
A pleasure! Anything you'd like to see next?
Thanks for this video. That’s really interesting subject, about risks in different ways of storing money.
Really interesting to hear your experience and experience of your clients about it.
Always a pleasure!
Anything you think might also work?
Ooh great video. Thanks
Thank you!
Anything you'd like to see next?
This is the best video explaining one of my biggest questions in finance. Thank you!
Always happy to be of service.
Anything you'd like to see next?
Perfect explanation. Really wanted to know this based on SVB collapse
Would love to see a video on best places to setup brokerage account. (for active traders, possibly LLC?) Is it possible to do this while living in a higher tax country?
love your videos
The excellent video explains how to protect yourself against bank failures. Now it turns out to be very timely!
Thanks!
Any strategies you'd like to share?
Trying to spread on numerous accounts in the UK for e.g. 2 or 3 different banks can actually be under the umbrella of a 1 further bank , if this turns out to be the case your £75-100k safety net guarantee will only be paid out once not 2 or 3 times
Thanks Michael. Yes people think they should open many FDIC insured cash accounts. But the simplest way to hold a large cash position is through short term treasuries.
With regards to where and how, the US is climbing up the ladder, given their non reciprocation in CRS. Decent wealth amount in Wyoming trusts now. Coupled with IBKR accounts.
Enough name dropping.
So many assumptions that everything is and will remain hunky dory as long as status quo remains, whilst forgetting that the whole system is broken
No. You're broke that's why you think the system is broken.
Don't forget gold and silver!
For a small share sure but it's an asset that tends to under perform so I wouldn't usually recommend a high allocation in it.
We did a video on gold in the past discussing the details
Religion Compound & Social Organisation & Jail System (Compound) if one have enter jail before, one have no way of escape out. The jail is the best security system one can build and keep wealth security.
US treasuries are one of the safest cash equivalent asset that a lot of wealthy people around the world store their wealth in. I mean it's like the FDIC account with a better interest rate and a better tax scheme for Americans excluding municipal bonds with less risk than munis.
You are correct though if the US Treasury ever defaulted storing you money in just about any other asset will be pretty worthless too.
T bills are the way to go.
I thought you were going to say life insurance or becoming their own bank
And what do you think of the options we provided?
😅😂😅
You don't store money - you let it work.
Haha what's your strategy surrounding that?
Stocks?
It should also be added that many wealthy people think in "real" terms or at least they should be. Meaning just holding cash, either actual cash or on deposit at a bank, has a built in loss in the form of inflation. Just as an example, from 2010 until now USD has seen a total inflation of about 39%. So if a person had buried 100k usd in cash, or put it in a 0% deposit account, they would have roughly $61k purchasing power in terms of the 2010 usd. If that same person had put it in a low interest account like most US savings accounts and earned 0.5% interest then they would have 106k usd after but in terms of 2010 it would have roughly 65k purchasing power. To be slightly better than break even in real terms over that time a person would have needed to earn about 5% compounding interest over that time period. Anything less is losing purchasing power over time. This is why rental real estate as well as heavy cash flowing businesses are some of the best ways to store wealth. Usually speaking one can leverage those assets too which can increase the gains in real terms quite dramatically over time.
As an example, the median new home price in the US in 2010 was roughly $210k and in 2023 the sale of homes 10-15 years old have a median of roughly $350k usd. Rent can be described in terms of the value of the home and the percentage is different from one area to another and change over time but it doesn't really change that much. This isn't always the case though and the income can often shield one in some ways from drops in pricing. Rarely do rents lower in higher demand areas even when prices drops. Generally speaking rent is at least as high as inflation in terms of the value of the home. Meaning if inflation is 4% per year then rent should be at least 4% of the value of the home divided by 12 but most likely more if you account for fees, taxes, etc. So in the $100k example, and just assuming the relative numbers are the same from above, then if a person had purchased a home and rented it out they would have a home worth almost $200k in today's usd and would have earned about $95k usd in rent over the time they held the property. This isn't accounting for taxes and other fees but it also isn't accounting for potential to leverage the equity over time in addition to leveraging the income. Still owning property is much better than a bank and even many other types of business assuming a person is focused on the long term and "real" value
thanks
A pleasure!
Anything you'd like to see next?
@@OffshoreCitizen - whether knowledgable/old money people protect their assets by having some gold?
We've done some previous videos on gold
Interesting to hear this. I figured out this thing for myself years ago. But my motivation was different. I wasn't as concerned about insolvency of bank as I concerned that banks are more regulated, and thus can be more aggressive in their derisking policies than brokers. Since I'm russian citizen, I thought broker is less likely to close my account (because there is less regulatory pressure on them).
Nice!
Any other tips you'd like to share?
@@OffshoreCitizen I would personally look into gold vault storage solutions which aren't attached to any bank. I don't know much about it. Perhaps you can make video on this topic? Ideally it should be one or few visa free, easily accessible countries where to keep gold bars (HK, UAE?)
How could FTX swindle money if it was a broker?
Do hedge funds use demat account?
What about the mattress? :)
Bulletproof :)
Not sure about brokerage accounts. Look at what happened at MF GLOBAL.
What do you think are the best options?
So, would it also be safer to store cash in a brokerage account rather than a bank?
thats what i want to know now
No
A brokerage account is someone making money off you so your best interests aren’t their main concern. Keeping your money with them is. If the dollar bill fails then in my opinion your money is gone because they invest it in the stock market which is tied to the dollar bill.
@@truecrime98that’s not how brokerage accounts work
would swissquote be a safe brokerage, Michael?
I looked into swissquote some time ago and I think their problem was high fees. My suggestion is to stick to a few of the top 10-20 brokers. Just google the top ones ;)
when you say bonds, does that include GICs?
Similar though with some differences. Falls into some comparable categories
@@OffshoreCitizen ok thanks
Divesting
Ledger
Some... Though they can be cracked
The a right after 2008 they passed a law that when the banks fail we bail them out. It’s called a bail in. They can take your money out of your bank if you have more than 250,000. Sorry because f the situation we are in right now. Don’t listen to this guy. Maybe in normal times. Except the real estate option he said and as long as it isn’t in the US
The US is in many ways much safer than many other places
No to digital money no to the Banks to gold ok
Bitcoin.
Not that much wealth there yet
FTX? Jk
😂😂😂
I waisted way to long on this video just say the answer and end the video
😂 yea fr bro
I disagree that money in India is NOT safe. If the money is legally earned and saved in bank accounts in India it has very stringent law to safeguard money. One bank can not go bankrupt that easily in India. India is open democracy. Tax evader from India move the money to offshore. You are so prejudiced and annoying. Please correct, India is not China where Govt can confiscate your money.
Just make sure you don’t bank with Peter Schiff
Have you seen our video on him?