4 places millionaires invest their cash to protect their wealth

There are several approaches millionaires can take when putting money somewhere that has the potential to grow over time. Do you know which option is best for building your wealth?

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GOBankingRates spoke with John Jennings and Dr. Stephanie Lo, president and chief strategist of the St. Louis Trust and Family Office. Learn more about where billionaires should invest their cash by joining NDVR’s Vice President of Research.

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Cash-like investment

Jennings works with families with net worths of over $100 million. He said he advises clients to keep their projected portfolios in cash for at least a year.

But by cash, Jennings refers to investments that meet three criteria:

Here are some examples of investments that Jennings said meet these criteria.

• bank savings account. These include savings accounts and money market savings accounts.

• Cash in your brokerage account is usually transferred to your bank account overnight.

• Money market mutual funds purchased through a brokerage account.

“We regularly evaluate yields on these various physical products and move our customers’ cash to maximize after-tax yields,” Jennings said. He points to money market mutual funds as an example of a physical product that typically provides higher returns than cash in savings or brokerage accounts.

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Treasury bills and certificates of deposit (CDs)

Jennings also uses Treasury bills and certificates of deposit (CDs) to earn yield on funds he doesn’t have to withdraw on demand.

“If a customer were to sell their business today and pay income tax on the sale in April 2025, we would likely invest the estimated tax amount in Treasury bills that mature immediately before April 15, 2025. “We’re going to do that,” Jennings said. .

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Diverse portfolio with well-balanced risk

Lowe said a well-diversified portfolio is a non-negotiable option for billionaires who want to protect their wealth. However, billionaires also strive to build risk-balanced portfolios.

Lowe said high-net-worth clients are building highly personalized portfolios for themselves. These include:

• Unique allocation of stocks and bonds

• futures

• Options to improve diversification

• Overall portfolio risk-return profile

“Such portfolios not only help millionaires protect their money, but when properly customized to investors, they can help ensure they can live the lifestyle they want in retirement and beyond. “It helps us do that,” Lo said.

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This article originally appeared on GOBankingRates.com: 4 places millionaires invest their cash to protect their wealth