The ultra-wealthy also termed ultra-high-net-worth individuals (UHNWIs), are those who have a net worth of at least $30 million. The net worth constitutes shares in real estate and personal investments in different sectors.
The people with the lower net worth look at these UHNWIs, and believe that the key to becoming ultra-wealthy lies in some unrevealed investment decisions. Contrarily, UHNWIs understand the basics of having their money earned for them and know how to take calculated risks.
1. UHNWIs look at the frontier and emerging markets beyond geographical borders. Individual investors should do their research on emerging markets, and decide what fits into their investment portfolios and their overall investment strategies.
2. UHNWIs know the value of physical assets, and they allocate accordingly. Ultra-wealthy invest in assets such as private and commercial real estate, land, gold, and even artwork. Real estate acts as a famous asset class to balance out the volatility of stocks.
3. UHNWIs point out that real wealth is created in the private markets and not in the public or common markets. They add a major chunk of their initial wealth from private businesses, often through private equity.
4. UHNWIs envision where they want to be in 10 years and beyond. They tend to stick to an investment strategy that will get them to the level. Unlike smaller investors, they don’t look at what their peers are doing to build personal wealth.
5. UHNWIs feel the importance of rebalancing. Through consistent rebalancing, investors ensure their portfolios are adequately diversified and proportionally allocated. Rebalancing parameters are predefined with firms based on asset prices.
6. UHNWIs, takes financial plans as a dual strategy. They act, invest and save wisely. Resultantly, they focus on increasing cash inflows & reducing cash outflows. The ultra-wealthy should not be considered savers instead they know how to achieve their desired level of wealth in a short span.
