Custom Search
Asav Patel

Where Do Billionaires & Millionaires Keep their Money?

When I asked this question on one forum, I get following kind of responses.

Response: 1 The money is invested in several different types of accounts and several different banks. Also, the money is invested in things like property, mutual funds, stocks, cars, business ventures, commodities, jewelery, art, etc. When they say they are "worth" a billion, it doesn't mean that it's liquid money. Liquidity means cash.

Response: 2 most of them keep at home in safes, i for one keep mine in a cd account so that if times are bad it collects intrest and could be useful in the long run.

Response: 3 Most billionaires keep their money where they made their money, mostly in simple investments, like mutual funds or real estate.

Response: 4 No - billionaires send their money to offshore banks, and Switzerland. Most invest their billions with Stocks and Bonds. That's Blue chip stuff. They only keep a few 100,000 around for small change.

True Answer -

All of the above are the false answers. Now, let me tell you the real answer that, Where do the Billionaires keep their money?

In fact, one reader had once asked me a question that, “Bill Gates has $ 40 Billion. Where do put his $ 40 Billion? Because no bank is totally safe now a Days.”

Well, The True Answer is – A Billion Dollar is not a Hard Cash but it’s the valuations of the Assets of the Billionaires most commonly a Large chunk of shares in their own publically listed companies. Billionaires are billionaires because they have promoted a Company, did a successful business and later on take that business to the public and now the shares of that Business are listed on the various stock exchanges around the world and investors are investing in those stocks. Now, the valuation of their own stocks in their own companies is worth of Billions and that’s why they are Billionaires.

Bill Gates is a Billionaire because he owns 8% Shares of Microsoft which amounts to 100 Million shares of the Microsoft. He is the single largest shareholder of the Microsoft in the world and the valuation of these 100 Million stocks is worth of $ 40 Billion and that’s why he is a Billionaire. $ 40 Billion is not a Hard cash. It’s just the “On Paper” Valuation of his shares in the Microsoft.

In other words, every billionaire’s wealth in this world is “On Paper”. It is mainly the valuation of their stocks in their own publically listed companies. So There is no need of putting those money in the bank or somewhere else. Because those money is already invested in their own Businesses.

Becoming a Billionaire is a game of creating valuations in the economy. Billionaires promote a company, higher a management team and later on take that company to the public and by becoming a selling shareholder they become Billionaires. The more valuations you create in the economy, the more rich you will become. No need to earn billion dollars. You just have to sell the shares…!!!!

Labels: edit post