Billionaires don’t treat money like most people. While everyday financial advice centers around savings accounts, the ultra-wealthy largely avoid them – not because they lack funds, but because of how they maximize them. Savings accounts offer low returns, often negative when factoring in taxes and inflation, making them an inefficient tool for those with substantial capital.
But where do they put their money instead? The answer isn’t a secret; it’s simply a different set of priorities and access.
The Core Strategy: Ownership, Not Just Investment
For most billionaires, wealth isn’t built on picking stocks, it’s built on owning the companies that dominate markets. The Forbes billionaire list confirms this: the top 10 wealthiest individuals – including Elon Musk (Tesla, SpaceX), Jeff Bezos (Amazon), and Mark Zuckerberg (Meta Platforms) – all founded or fundamentally shaped their fortunes through business ownership.
This isn’t accidental. Building a world-leading company is the most reliable path to extreme wealth. While stock market gains can make millionaires, reaching billionaire status almost always requires direct control over a significant enterprise.
Real Estate: Tangible Value and Tax Advantages
Billionaires also heavily invest in real estate. Unlike volatile assets, property provides a visible, tangible store of value, even during economic downturns. The ultra-wealthy focus on premium properties – the kind always in demand, regardless of market conditions.
Beyond simple appreciation, real estate offers significant tax advantages and the potential for leveraged gains (controlling an asset with a smaller initial investment). Rental income provides a steady cash flow, while strategic development or acquisition can yield substantial returns.
Private Equity: The Exclusive Realm
Private equity – owning stakes in companies not publicly traded – is a favorite among the ultra-wealthy. For a long time, this market was inaccessible to ordinary investors, but that’s changing. According to TIGER21, a network of high-net-worth investors, private equity was the top asset class for its members in 2024, with 28% of their portfolios allocated to it.
The appeal is clear: higher potential returns, less public scrutiny, and often greater control over investment outcomes.
The Stock Market: A Tool for Existing Wealth
Even billionaires participate in the stock market, but not as a primary wealth-building strategy. Instead, they use it to generate returns on their existing fortunes. Data from the Federal Reserve shows that the top 10% of Americans own a staggering 93% of the total U.S. stock market value, demonstrating their dominance in this space.
The key takeaway is simple: billionaires don’t just invest money, they own things that generate wealth independently of traditional financial instruments. Savings accounts are for preservation, while ownership is for exponential growth.
