Where Do Millionaires Invest Their Money?

There are some distinct characteristics that set millionaires apart from the everyday person. While the majority of millionaires are actually self-made, meaning they didn’t receive it through an inheritance, a whopping two-thirds of them are entrepreneurs, according to the Economist. Millionaires also tend to live below their means, they’re natural leaders, and they focus on investing their money rather than spending it.

Today, we’re focusing on that last point and figuring out just where millionaires invest their money.

Where do millionaires invest their money?

A survey conducted by Legg Mason that was featured on Forbes asked where millionaires with over $1 million in portfolio investments were keeping their money. A whopping 25 percent of their funds are held in cash, while 21.5 percent goes to equities (or stocks), 19.6 percent goes to bonds, 18.7 percent goes to real estate, and the final 9.1 percent goes to non-traditional investments, which can be anything from peer-to-peer lending to investing in wine or collectibles.

What shocked me the most in that survey was that one-quarter of the millionaires’ surveyed funds were in cash. While I personally do have a good amount of my money in cash, it’s because that money is either going to be spent within the next few months or it’s used as our emergency fund.

If I were a millionaire, my portfolio would look similar to the one featured on Forbes. I’d invest as much as I could into retirement (company 401K’s, Roth IRA’s, etc.), invest in mutual funds through USAA (we currently have two funds through them) and Vanguard (we are looking into opening an Index Fund through them in the next few months), and invest heavily in real estate. While real estate is oftentimes more of an “active” income stream depending on what you plan to do with the property (rent it out, flip it, buy and hold), my handy husband wouldn’t mind maintaining the properties and improving them. Ahhh, if only.

Do millionaires invest in anything “fun?”

Non-traditional investments are typically invested in because the investor enjoys that particular type of investment, whether it’s collecting art work or coins, getting involved in peer-to-peer lending, or even playing the lottery! While the lottery might not be considered “investing” to many because the odds are so low of winning, there have been many millionaire lottery winners over the past few years.

The odds of winning the powerball, for example, are 1 in 175 million. If you’re an average worker earning $50,000 per year, putting your money in the lottery will most likely never make you a millionaire. However, if you save diligently, live below your means and invest in the stock market through mutual funds and retirement accounts, you will – slowly but surely – reach millionaire status.

But, playing the lottery can be fun, assuming you set aside money specifically for it and that you’re financially able to lose the money. My husband and I used to buy lottery tickets once a month and play scratchers whenever we went on road trips (such a fun way to kill time, and somehow we almost always won with those things!). However, I should note that gambling is NEVER a good idea if you’re spending money that you cannot afford to lose.

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How are you currently investing your money? And, do you ever play the lottery for fun?!

This is a sponsored post on behalf of Lottosend, a safe way to play licensed lottery games online. If you or someone you know has a serious gambling problem, please seek help immediately.