This may be surprising, but not everyone who is rich is famous and not everyone who is famous is rich. In fact, the vast majority of individuals who are classified as “ultra high-net-worth”(UHNW), or those with a net worth of at least $30 million, are people that you may have never heard of, and there’s a good reason for it: if everyone knew how to get rich, then no one would be rich.
I was inspired by this article from Investopedia recently, which gives great insight on the process of getting wealthy – by telling you how NOT to get wealthy through the process of investing. The following six items are investment mistakes that you’ll never catch high-net worth individuals committing. Regardless of how much money you have to invest, all of these points can help you get to a comfy position in the investment world – you may not be a multi-millionaire by retirement, but you will at least be far better off than “average” people.
1. Only investing in American and European companies – Most people stick to companies they know, and the majority of the time these companies are located in the USA, Europe, or other developed economies like Japan. Have you ever thought about investing in Indonesia, Chile, or Singapore? Exactly. UHNW investors are always looking for new opportunities for stocks in developing markets to boost the return of their portfolio. Obviously, you shouldn’t allocate 100% of your portfolio to high-risk developing markets, but having this diversification is very important.
2. Only investing in ‘intangible’ assets -Stocks, bonds, money market funds, etc. are all great ways to invest abstractly, but there is nothing tangible about them. You can hold a piece of paper, but you can’t convey its worth to anyone else. UHNW individuals include many tangible assets in their portfolio that will only increase in value over time. Consider adding things like gold, real estate, land, artwork, antiques, or even vintage cars to your portfolio over time for even further asset diversification.
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