Where Do Billionaires Keep Their Money?

Billionaires don’t keep their money in cash; their wealth comes from their net value. The net worth is a reflection of the things they own – companies, stock, and property. They reinvest every profit because if they keep their money in cash, inflation will eat a chunk every year.

The neverending talk about billionaires and their insane wealth took up once again since Jeff Bezos got a private flight to space on his custom-built rocket. With the pandemic’s beginning, his wealth noticed an increase of $86 billion since January 2020.

The common misconception most people have about billionaires is reflecting the net worth in actual money. Long gone are the days when business people used private jets to transport suitcases full of cash to Swiss banks. While laundering money might still work this way, the legal billionaires have a way more sophisticated way of keeping their wealth.

If someone is worth $200 billion, he doesn’t keep it in banknotes stashed in a bank. Let’s go through some of the billionaires’ preferred methods of keeping their coins.

The Three Comma Club

The three comma club is a popular reference used to describe people whose wealth is or exceeds $1,000,000,000. Currently, there are over 2,755 billionaires in the world, and 724 of them are Americans.

This number includes both self-made billionaires and those coming from family money. They can single-handedly change the world, which is why they face constant criticism.

Even with the thousands of charities and foundations they run and donate to, they’re still getting richer. It’s hard to visualize how much is $200 billion in cash, and luckily they don’t have to either.

Many have entered the three coma club, but only a few thousand of them have preserved a spot.

The way they spend and keep their money is crucial; that’s why they spend a chunk of their wealth on consultants, accountants, and lawyers. After all, who would want to fall out of such an elite list?

Net Worth vs Cash

Here’s the most common misconception.

A billionaire’s wealth is his net worth, and net worth is not disposable cash sitting in a bank account. The assets held could be a combination of bank accounts, real estate, cars, companies, funds.

It’s the value of those items summed up. But the value is easy to manipulate, especially with a good team.

So what is net worth? It’s a simple equation between what you own and what you owe.

Let’s say you have $200,000 in your bank account and owe $70,000 in student loans. Your net worth is $130,000 because that’s what you own when you give what you owe.

Back to billionaires, they don’t have cash, right? But they have companies. The value of a company is easy to manipulate. Liquidity is how much you can get from selling a company at the very moment.

If it’s an industry where companies trade daily, and you can quickly sell it at its total value, then it’s a very liquid company. We’re talking of well-managed, successful companies.

We can never be aware of exactly how much money a billionaire has. Net worth is variable, and only the IRS is 100% sure of a person’s wealth.

So how are there thousands of reputable sites claiming the exact sum a billionaire owns? They work with experts who can do good appraisals of a person’s net worth, according to the data shared with the public.

How Billionaires Hide Their Money

One thing all billionaires have in common is their assets. The higher the wealth, the larger the percentage of it goes to non-liquid assets.

Non-liquid assets are everything that’s not cash or can’t be quickly converted to cash. Things like collectibles, real estate, cars, companies are non-liquid or illiquid assets that require more time to sell and a transfer of ownership.

The less money a person has, the more liquid they are, but billionaires don’t plan on needing an emergency fund, so they invest everything in assets that are harder to sell.

Billionaires look at money like energy that needs converting – they receive gains and reinvest them at the very moment. Like the average person would do with dividend reinvestment, the billionaire does with almost all of his money.

What do they do when they need money? They take up loans.

The truth is, the wealthier the person is, the more loans they have. Instead of withdrawing a couple of million dollars, they get a loan. But why would they pay interest on a loan when they have the cash?

Mark Zuckerberg pays himself an annual salary of $1. His billionaire colleague Jeff Bezos lives off of $81,000 a year. Following their lifestyle, neither looks like they’re managing life on salary.

The truth is if a billionaire withdraws cash, they will pay high taxes. So instead of using their own money, they take up loans from the bank since the interest they’ll pay is significantly lower than the tax for withdrawal.

And who wouldn’t give a loan to Bezos, Gates, or Zuckerberg!

Billionaires Don’t Save

The average person strives to pay off debt and save enough money for an emergency fund and retirement. However, billionaires have enough assets to liquidate to live comfortably for hundreds of years, so they don’t save.

Every capital gain they make, they reinvest in something even more profitable. A long-time top of the list, Bill Gates has recently invested in the Four Seasons chain of hotels.

At 65 years with $131 billion in his name, he keeps exploring new investment opportunities to build his wealth further.

It’s a tale as old as time that you can get rich by saving. Billionaires got rich by investing, selling their inventions, broadening and diversifying their portfolios. Not even self-made billionaires built their wealth by accumulating cash.

The most significant precaution measure billionaires take is diversifying their capital. Then, if something happens to one of the companies or someone tries to steal from them, they won’t be damaged as much.

What Billionaires Spend Their Money On

Some of the billionaires look so modest you’d never guess how lavish of a life they’re living.

Everyone wants to snoop into the life of the wealthiest, so it’s not surprising they’ll spend millions to buy peace and privacy.

Mark Zuckerberg has been buying land in Kauai, Hawaii, for a few years now, so far owning three separate properties, each over 600 acres.

Bill Gates failed to buy the greek island Scorpios once owned by Aristotle and Jackie Onasis, but the daughter of the Russian billionaire Rybolovlev managed to get it for over $150 million.

Richard Branson owns the jewel of the Caribbean, the Necker Island, which he bought in 1979 for just $120,000! He also owns Moskito Island.

Red Bull’s co-founder, Dietrich Mateschitz, owns Laucala Island in Fiji purchased for $10 million. John Malone, the single largest landowner in the US, owns Sampson Cay, a paradise island in the Bahamas.

Jeff Bezos, Elon Musk, Bill Gates, Mark Cuban, and Richard Branson are the billionaires who love to own private jets, some of them even more than a few!

Other billionaires go to the extent of building doomsday shelters or look for the secret of eternal youth.


Which country has the most billionaires?

As of March 2021, China holds the top with 1,058 billionaires. America comes right after, while India holds third place.

Germany, UK, and Switzerland are the European countries with the most billionaires. Russia has 85, while Thailand has 52 billionaires.

Where does a billionaire keep their money?

Billionaires hold less than 1% of their money in cash, and the rest in their business interests, companies, real estate, cars, art, collectibles, etc.

How do billionaires manage their money?

Billionaires have financial advisors and wealth managers that work only for them and help them make intelligent decisions in managing their money.

What bank does Bill Gates use?

Bill Gates has not disclosed which bank or banks he uses. However, all of his investments go through his own holding and investment company Cascade Investments.

What is the safest place to keep money?

Large sums should never be kept in cash as they lose value over time due to inflation.

When dealing with a small amount, consider putting them at least in a high yield savings account to cover the inflation. You should never keep more than a few hundred at home.

Bottom Line

We live in an era when half the world is struggling to make ends meet and pay off debt while a handful of people made smart decisions and built up a wealth enough to feed a continent for years.

Self-made billionaires are rarely seen flashing their money; they work in silence and build empires over time. Putting the insane amount of wealth they have, there’s a lot we can learn from most of them.

Instead of saving money over the years and suffering lost from inflation, start investing. If you have an idea for a business, why not consult experts and start working on it?

The youngest self-made billionaire in the US, Austin Russell, is another college dropout that developed sensors and other self-driving technology with only a $100,000 initial investment from a fellowship. Today Toyota and Volvo are their main customers!

We might never become billionaires, but we can always strive to keep our money in a better place.

Where would you keep your money if you were a billionaire?

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