When it comes to creating wealth, most people follow the same basic plan — purchasing mutual funds or stocks, opening a retirement or savings account, and perhaps purchasing real estate. While these are excellent ways to save, none of them are likely to lead to wealth and abundance. As a high net worth individual, you want to do more than just “save for the future.” In fact, you want your investment money to create a snowball effect of ever-increasing wealth to pass down to your beneficiaries. To achieve this goal, you need to use effective high net worth investment strategies. If you have $5 million or more of liquid assets, request a free copy of our book, 7 Secrets to High-Net-Worth Investment Management, Estate, Tax, and Financial Planning to learn how to invest your wealth successfully.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
Table of Contents
At Pillar Wealth Management, we offer comprehensive investment services to high net worth and ultra-high net worth individuals who own liquid assets worth $5 million to $500 million. Our financial investment services include research and due diligence, portfolio design, asset allocation, and tax-loss cultivation. To learn more about our investment management services, schedule a free video consultation with one of our financial advisors.
Why Are High Net Worth Investment Strategies Important?
Before looking at high net worth investment strategies, let’s understand why they’re important. Many individuals hesitate to invest their money because they are not certain if it is the right way to go.
If you, too, are unsure about investing your wealth, you should know that investing wealth is an excellent step to take, particularly if you have some long-term monetary goals. This is because inflation can depreciate the value of your cash savings considerably over time. Here are some other benefits of investing your money.
1. Multiply Your Wealth
One of the biggest advantages of investing is that it enables you to increase your wealth. Several investment options, such as growth stocks, hedge funds, mutual funds, and certificates of deposits, offer returns on your wealth, making it grow over time.
Thus, there are plenty of ways to invest, but if you are serious about increasing your wealth, you need an investment strategy that works in harmony with your objectives. If you have $5 million to $500 million worth of liquid assets, request our book 7 Secrets To High Net Worth Investment Management, Estate, Tax, and Financial Planning to understand the importance of using the right investment strategy.
2. Beat Inflation
If you do not invest and grow your wealth, you will lose money over time because of inflation.
Inflation is the continuous rise in the cost of living, which can impact your financial well-being.
One method to outperform inflation — and benefit from positive “real” returns over the long term — is to invest in assets that are not only capable of providing high-income returns but also offer the potential for capital growth.
3. Live a Comfortable Retirement
Do you aspire to live a peaceful, enjoyable, and comfortable retirement? If your answer is “yes,” then you should know this goal is quite attainable if you plan ahead for it.
Retirement income planning is surely one of the most important tasks you can undertake — particularly if you are above 50 years of age. As a matter of fact, retirement planning is important regardless of how wealthy you are as the quality of your future will ultimately depend upon it.
For successful retirement planning, you have to bear in mind that you will not have any active income source post-retirement. Rather, you will have to fulfill your financial needs from the passive income generated by your investments. In simple words, the income generated by your investment portfolio should enable you to live a stress-free post-retirement life.
Additionally, being a wealthy or an ultra-wealthy investor, you might have some specific retirement objectives. For example, you might want to buy a private jet, travel the world, or just stay at home on your country estate. The income generated from your investments should allow you to successfully achieve your goals, whatever they are.
4. Reduce Your Tax Obligation
Another great benefit of investing your wealth is that it enables you to reduce your tax burden. This is because the wealth you invest in specific retirement saving options, such as a 401K, SEP-IRA, or traditional IRA, isn’t taxed the year you earn it.
Rather, you need to pay taxes on your contributions when you withdraw them during retirement. If you are a wealthy or affluent individual, this strategy can help you save hundreds of dollars in the year that you contribute.
However, if you opt to pay taxes the year you contribute, you can just go for a retirement account such as the ROTH IRA. Through this option, you can pay taxes the year you contribute instead of paying taxes when you withdraw.
These are just simple examples. There are plenty of loopholes in the tax code that benefit investors. This is how the wealthy stay wealthy and pay so little in taxes. To learn more about how you can save on taxes and grow your wealth, click here to speak to one of our financial advisors.
How Do the Ultra Wealthy Invest?
Ultra-high net worth investors have a policy of privacy when it comes to securing their wealth and assets. Nevertheless, many of them do not want to risk managing their assets themselves, so they hire a financial advisor to help them. To successfully invest your wealth, you need to use the right strategies, which brings us to the question — what are the four investment strategies?
1. Always Have A Comprehensive Financial Plan
A financial plan allows individuals to understand their risk tolerance and how it can change over time. Following a sound and logical plan can prevent ultra high net worth individuals from looking at the market emotionally. It allows them to stay disciplined, which is extremely important for investing for the long term.
2. Begin Investing Early
The longer your money stays invested, the higher its potential to increase. As ultra high net worth individuals begin investing early, they can leverage the compounding effect and create an opportunity to purchase at an average cost every time. Someone who begins to contribute to their retirement account from the age of 20 will definitely have an edge over the person who starts at the age of 30.
By the time these two individuals reach 65 years of age, the one who started earlier will have a considerably higher chance of living a financially sound retirement. Of course, this also depends on the amount and consistency with which they contribute to their retirement accounts. If you have $10 million or more in investable assets, you can discover some of the best investment strategies outlined in our book.
3. Invest in What they Know
Stay away from investment strategies that are too obscure, complex, or challenging to keep up with. Make sure you are well-versed in the industry, sector, and company if you’re planning to invest in a particular stock.
4. Use Asset Allocation
Ultra-high net worth individuals use asset allocation, which is an investment tool that aims to balance reward and risk by allocating a portfolio’s assets according to a person’s goals, investment horizon, and risk tolerance. The three primary asset categories — cash, fixed income, and equities — have varying levels of return and risk. Thus, each will perform differently over time.
When you use asset allocation, you are not putting all your eggs in one basket. If a particular asset is underperforming, you have other assets that can improve the performance of the portfolio. In some cases, stocks will perform poorly, whereas physical assets such as gold skyrocket in value. You can request a free copy of our book 7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning to understand the importance of asset allocation.
What Do High Net Worth Individuals Invest In?
A common question that people have is, “What Do High Net Worth Individuals Invest In? “
Some affluent individuals opt for low-risk investments that provide moderate returns. Other high net worth individuals choose investments that have a higher risk but offer higher returns as well. In this article, we look at some of the most popular investment and financial products in which the wealthy invest.
1. Real Estate
High net worth individuals view real estate as an ideal investment product. Real estate is classified into two categories — residential real estate and commercial real estate.
Some high net worth individuals choose to invest in multiple residential properties that they either use as vacation homes or rent to create a source of income. Commercial real estate assets are low-risk and high-income generators. They include office buildings, shopping centers, and warehouses.
You may also consider investing in real estate investment trusts (REITs) — firms involved in handling and financing income-generating real estate and providing investment opportunities very similar to mutual funds.
2. Unregistered Securities
Unregistered securities are another popular investment among high net worth individuals. These are shares of stocks that do not trade on financial markets and have not passed through the regular IPO process.
For unregistered securities, a single or more private offering generally precedes an initial public offering where high net worth individuals can buy a firm’s shares. Schedule a free meeting with one of our team members to find out more about unregistered securities and if they’re right for you.
For example, Uber is a private company whose shareholders are primarily wealthy people such as yourself. As opposed to publicly traded companies, privately traded companies do not have to prepare quarterly and annual reports. Many smaller startups work in the same way.
3. Mutual Funds
This brings us to the third investment product. You do not need to be an expert in investing in stock markets on your own, but if you are one, that’s great! However, if you are not, then you should allow the experts to take care of it for you via mutual funds. Investing via mutual funds is considered to be one of the most feasible options for high net worth individuals who might be risk-averse and want to put their wealth in the hands of a mutual fund to be invested in securities. You can either invest in a large one-time amount or make regular payments towards the same.
4. Tax-Free Municipal Bonds
Tax-free municipal bonds are another great pick for high net worth investments. Municipal bonds are fixed-income investments that are issued by government agencies, cities, states, and other entities such as port authorities or housing authorities. Many projects, including underpasses, hospitals, stadiums, and roads, are financed through the issuance of municipal bonds.
The best feature of municipal bonds is that they can offer higher after-tax returns than any other taxable government or corporate bonds. In addition, the interest provided on municipal bonds is exempted from federal taxes and sometimes local and state taxes as well.
A Few Last Words
Pillar Wealth Management is a top pick for high net worth and ultra-high net worth investors all over the country. The financial advisors working at our firm have decades of experience that only expands with each passing year. We are upfront about the fee we charge and work to offer solutions that allow you to diversify your wealth. We treat each investor with a one-of-a-kind outlook as we believe that every investor is different. Click here to book a free consultation with any of our team members.
To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.
We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.
You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.
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