Knowing how to invest has always been a cornerstone for building lasting wealth. Data from a study by the Peterson Institute for International Economics shows that wealth in Europe often flows through inherited capital, with an estimated 54% of Spain’s affluent originating from inheritance and about 19% coming from active investing. The question remains: where do the wealthiest store their money for growth and resilience?
Diversity and a broad view of the global market shape their approach. The wealthy pursue investments that meet immediate needs while ensuring they leave a sizable legacy for future generations. They also focus on beating inflation, managing spending, and optimizing taxes. Wealth managers point out that preserving capital is a priority, alongside the aim to grow it. Most of them keep a portion of their capital in liquid assets such as cash and high-quality bonds to weather shocks and offset market declines. This 7% liquidity cushion acts as a buffer against unpredictable events.
In recent years, a low-rate environment has nudged investors toward a higher tolerance for risk. Banking sources indicate that many have reduced exposure to fixed income and increased allocations to equities, given the limited profits from safer assets. Equities have become a common cornerstone for high-net-worth portfolios, reflecting the flexibility to own stakes in multiple companies without direct involvement in day-to-day operations. Recent analyses suggest stocks constitute roughly a third of top-tier investment portfolios. Younger high earners tend to favor technology and startup ventures, drawn by a track record of wealth creation in those sectors. More mature investors lean toward pharmaceuticals, energy, or financial services. They also keep an eye on mega-trends like robotics and clean energy, evaluating opportunities in private equity where unlisted firms can be valued over a longer horizon. Entry thresholds for private equity typically range from tens of thousands to several hundred thousand euros, with a horizon of a decade or more for potential payoff.
Real estate remains a traditional pillar for many seasoned investors. Large-scale properties including offices, shopping centers, industrial sites, and data centers are common targets. Rental income offers steady cash flow, while long-term appreciation can significantly boost net worth. Beyond property, the wealthy often invest in infrastructure projects such as roads, hospitals, rail networks, and even ski resorts, seeking both income and enduring value. Commodities represent a smaller slice of portfolios, yet they attract attention when inflation accelerates or supply chains disrupt the market. Analysts note that commodity exposure remains limited, balancing risk with potential inflation hedges.
Alternative investments attract attention as diversification expands. Wealth managers in mainstream banks highlight the value of combining nontraditional assets and occasionally accepting reduced liquidity for potential gains. A subset of the ultra-wealthy own collectibles, classic cars, fine art, or rare musical instruments as stores of value. Some opportunities start as niche trends and later become mainstream, such as cannabis ventures, metaverse projects, crypto-assets, or biodiversity initiatives. Productive rural farms have drawn interest for their sustainable practices and potential income, aligning with environmental, social, and governance goals. While cryptocurrencies have created notable wealth for a few, they have also exposed many to substantial risk. The overarching expectation for this category is a disciplined outlook, with annual capital growth targets generally in the 5–8% range, which remains challenging to achieve for many investors.
Alternative investments
In this space, diversification is seen as a core strategy. Investing across a wider array of assets can reduce concentration risk and smooth returns over time. Savvy investors weigh liquidity against potential yield, sometimes opting for assets that require a longer commitment. This approach is especially common among those seeking to safeguard purchasing power in the face of inflation and market volatility. The emphasis is on prudent selection, careful risk assessment, and a readiness to adapt to changing conditions as markets evolve.