It’s no secret that the number of ultra-rich folks is skyrocketing. In fact, last year, a whopping 70 new millionaires were added every single day. And this trend shows no signs of slowing down.
So, just how rich is “ultra-rich”? An ultra-high-net-worth individual (UHNWI) is someone with a net worth of at least $30 million. Since 2023, there has been a 4.2% rise for individuals worldwide with a net worth exceeding $30 million. New York, Tokyo, and San Francisco were the global hotspots for the ultra-rich.
And according to The Wealth Report 2024 by Knight Frank, the ultra-wealthy population is expected to grow by a massive 28.1% over the next five years. 81% of affluent Gen Z females are expected to grow their wealth this year alone.
The Ultra-Wealthy and Their Investments
When it comes to investing, the ultra-wealthy have a unique perspective. Their massive fortunes allow them to explore a wide range of investment opportunities that are often inaccessible to the average investor.
1. Luxury Real Estate
Believe it or not, the biggest chunk of the ultra-wealthy’s investments is in real estate, and it makes up 32% of total wealth across all assets. Think mansions, vacation homes, and even commercial properties like office buildings and hotels. On average, each super-rich guy owns 3.7 homes.
Millionaires often have large real estate portfolios. Once they get a foothold in the market, deals start coming their way, and it’s easy for them to get financing. These big-time investors have tons of money tied up in properties. While real estate might not be a quick cash cow, it can be a goldmine in the long run. It’s a classic investment for millionaires looking for a steady stream of income.
2. Private Equity and Hedge Funds
Public equity, or stocks, are well-known because they trade on stock exchanges. One of their biggest advantages is liquidity. You can easily sell your stocks for cash. Private equity funds, on the other hand, are typically invested in by large institutions like universities and pension funds. To invest in a private equity fund, you generally need to be an accredited investor with a net worth of at least $250,000.
Unlike public equity, private equity funds aren’t subject to as many regulations. This can make them more attractive to some investors, but it also comes with increased risks.
Hedge funds are typically reserved for the ultra-rich. These funds pool money from investors and use various strategies to generate high returns. However, they’re not for the faint of heart, as they come with significant risks.
3. Investment of Passion
Some of the ultra-rich also invest in alternative assets like art, collectibles, and exotic cars. Art was the big winner, being the only luxury asset to reach double-digit growth in 2023. Luxury cars and watches weren’t far behind, while rare whisky (-9%) was the weakest performer in the list.
Many luxury items hold their value surprisingly well. Even in tough economic times, like 2022, when the stock market took a hit, these items continued to appreciate. Millionaires and the ultra-rich also have investments in intellectual property rights for songs or movies, which can be very lucrative investments.
Alternative Investments
To understand the investment habits of the ultra-wealthy, a survey was conducted among 500 wealth managers, family offices, and private bankers overseeing a combined $2.5 trillion in assets in 2023. Here’s a breakdown of their favorite investments:
| Rank | Asset | Average Proportion of Total Wealth |
| 1 | Primary and Secondary Homes | 32% |
| 2 | Equities | 18% |
| 3 | Commercial Property | 14% |
| 4 | Bonds | 12% |
| 5 | Private Equity / Venture Capital | 6% |
| 6 | Commercial Property Funds | 5% |
| 7 | Commercial Property REITs | 3% |
| 8 | Investment of Passion (e.g. art, cars, wine) | 3% |
| 9 | Gold | 2% |
| 10 | Crypto Assets | 1% |
| 11 | Other | 5% |
Numbers may not total 100 due to rounding. Source: The Wealth Report 2023 by Knight Frank.
Does the Ultra-Rich Use Financial Advisors?
Given the complexity of their financial situations, many ultra-wealthy individuals rely on financial advisors to manage their investments. These professionals can provide expert guidance, help develop personalized investment strategies and ensure that their clients’ financial goals are met.
Bottom Line
Millionaires have many different investment styles. These can include investing in real estate, stock, commodities and hedge funds, among other types of financial investments. Generally, many seek to mitigate risk and therefore prefer diversified investment portfolios.
As the number of ultra-wealthy individuals continues to grow, so too will the demand for luxury assets, including real estate, high-end investments, and exclusive experiences. The investment patterns of the ultra-wealthy will likely create a ripple effect across various industries as the ultra-wealthy seek to capitalize on any emerging opportunities. As a result, their spending habits will play an increasingly important role in shaping the future of the global economy.
Jonathan Lim is an adventurous writer and photographer who roams the wilderness with a pen in hand. When he’s not chasing waterfalls, you might catch him crafting tales about his epic escapades. With over a decade of experience in sports journalism, Jonathan’s true passion lies in hiking and football. Over the years, he’s written for ESPN, The Athletic, BBC Sport, ThePuntersPage, and even on random Reddit posts. Jonathan is also the proud dad of two beautiful golden retrievers, Marley and Bobby, who share their love for the great outdoors just as much as their owner does.