What do the Wealthy Invest In? (Part 1)

Not the Stock Market

Last week I discussed mindset. This week I’m jumping into the nuts and bolts.  What do the wealthy actually invest in?  Or actually today I’m going to focus on what they don’t invest in. 

I work with the wealthy on a daily basis and they provide me with their financial statements.  I’ve look at thousands of these over the course of my career and there are similarities from person to person that really can’t be ignored.  And today I will talk about what they do not invest in which may surprise you.  They do not have their money tied up in tax deferred vehicles like a 401k or IRA that they cannot access until they are ready to retire. 

Even more surprising most of these wealthy people DON’T invest in the stock market.  Out of their assets they may have 10-30% invested there.  When I ask them why, I have gotten the same answer said in different ways.  To summarize, they don’t understand the stock market.  It goes up and down but no one, not a financial planner or a well-regarded economist can tell you what causes these fluctuations in the stock market.  One day you could have $1000 the next day you could have ten. 

There is NOTHING tangible that you own.  You have a piece of paper that may have value one day and no value the next and your financial planner gets his fee no matter what the market does.  Next week I will go into detail about what the wealthy actually do invest in.

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2 Responses

  1. Andrea Bain says:

    Good job, Stephanie! I’ve been saying this in different ways for a long time. I don’t like the fact that 401k money can’t be controlled by us, the investor. We have to ride the ups and downs with the many corrupt people/processes who control it. And I feel exactly the same way about the stock market. I was burned in 2000, and it always left a sour taste in my mouth. Again, no control. My husband and I invested in a real estate coach in 2019. My 18 year old son Evan attended the boot camps as well. He’s our number one cheerleader! We also have a 16 You’re old daughter Brooke and a 12-year-old son Matthew. We currently invest passively in HickoryNorth Carolina with Danny Flores, 71 units, and on the GP side with 104 units in Brownwood Texas with Eric Stewart, Rob Rowsell, Vanessa Alfaro and Jake Garcia.
    In addition to those syndications, we own other multifamily units In California and Arizona on our own. Please reach out anytime, you have a friend here in Southern California! Would love to hear more about you.

    • stephanie walter says:

      Hi Andrea Bain,
      Sounds like you are doing all of the right things. BTW I think the world of Eric Stewart so it sounds like you are in good company with your choice of partners. What a great message you are sending to your children. My son is 7 but I plan to educate him to look at money this way. That you will do better with your money and investing than some financial planner. That your money is a tool to work for you.
      I would love to keep in touch and to connect at a multi-family event when those start up again!

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