Here’s How to Invest Like a Rich Person

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J.P. Morgan Private Bank recently released its 2024 Global Family Office Report that shows how high net worth families invest. The families in this survey have an average net worth of $1.4 billion.

Sometimes people have a misconception that rich people invest differently than the rest of us, or that rich people have some “inside track” for investing, or get investment opportunities that regular people can never have. The truth is more complicated — and perhaps more hopeful for everyday investors.

Let’s look at how some truly rich families invest their money — and what it means for your investment strategy.

Rich families invest 46% in alternative assets

The J.P. Morgan Private Bank 2024 Global Family Office Report found that rich families invest about 46% of their portfolios in “alternative assets,” which the survey defines as hedge funds, private equity, private credit, real estate, and venture capital (VC) funds.

Here’s a more detailed breakdown of how rich people invest 46% of their portfolios across these categories of alternative assets:

Data source: J.P. Morgan Private Bank 2024 Global Family Office Report

Why you can’t invest like rich people

Most of these types of alternative investments are usually off-limits to everyday people. You often have to be an accredited investor with a high income or over $1 million of investable assets before you’re allowed to invest in a hedge fund or certain real estate investment trusts (REITs), for example.

That’s because these alternative investments can be especially risky. Hedge funds and private equity funds can make big gains, but they can also suffer big losses. Wealthier investors are expected to be better-situated to tolerate those risks.

For example, venture capital funds invest in higher-risk, higher-potential, early-stage startups. Some of these companies might turn out to be the next big thing in tech and become worth billions of dollars. But many venture-backed startups fail. Venture capital funds are typically designed to deploy lots of capital for maximum growth potential across their portfolio of companies — even if not every bet turns out to be a big winner.

Remember the meme stock craze in 2021? Lots of everyday retail investors and day traders who were sending meme stocks “to the moon” were betting against big hedge funds that were shorting the meme stocks.

So don’t feel bad if the Securities and Exchange Commission (SEC) won’t let you invest in hedge funds, private equity, or VC funds. Yes, rich people can buy these alternative assets. But rich investors can lose big money, too.

Rich people mostly invest in stocks, bonds, and “regular” investments

Alternative assets like hedge funds, private equity, and venture capital often attract an outsized share of attention and mystique from the investing public — as if these are special, elite types of investments that give wealthier investors an inside track to success. But the J.P. Morgan Private Bank Family Office Report also found that rich families actually invest even more of their money in regular investments.

The report found that wealthy families invest about 50% of their money in investments like stocks, bonds, cash, and commodities that any everyday investor can buy. Here’s a breakdown:

Data source: J.P. Morgan Private Bank 2024 Global Family Office Report

Yes, rich people have access to some special categories of investment assets that you can’t have. But rich people also invest more of their money in publicly traded stocks, fixed income, and commodities that any investors can choose.

Just by buying stocks in your brokerage account or using a high-yield savings account or money market account, you are “investing like a rich person.”

Bottom line

Don’t worry about the investments that only the rich can have. You can make plenty of money by buying stocks — which rich people also own a lot of. You can buy bond index funds, invest in money market accounts, and even spice up your portfolio with some commodity ETFs — and all these money moves are also made by some of the world’s wealthiest families.

The best way to invest like the rich might be to just keep doing what you’re doing in your 401(k), individual retirement account (IRA), and brokerage accounts.

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