Optimal Finance Daily - Financial Independence and Money Advice 3376: How Do the Wealthy Invest? by Nick Maggiulli of Of Dollars and Data on Building Wealth Mindfully
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Dec 5, 2025 This discussion dives into how wealthy individuals invest, revealing that asset allocation is often influenced by access and status. Younger investors are favoring crypto and sustainable options, while traditional paths remain crucial for many. The conversation highlights that while alternatives like private equity can be enticing, they’re typically pursued after wealth accumulation. Ultimately, the focus is on finding a personal investment strategy tailored to individual circumstances, alongside the reminder to prioritize foundational financial practices.
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Younger Wealth Reflects How They Got Rich
- Bank of America's survey showed younger wealthy households favor crypto and alternatives while older wealthy favor stocks and real estate.
- This divergence partly reflects how these younger wealthy people became rich, not a broad generational shift.
Wealth-By-Age Skews Survey Results
- Younger wealthy households are extreme outliers because wealth correlates with age and exceptional events like early crypto gains or company exits.
- Sampling only wealthy young people overweights those rare paths and skews conclusions about typical wealth accumulation.
Alternatives Rise With Wealth Level
- KKR data shows allocation shifts: high-net-worth investors hold ~50% stocks, while ultra-high-net-worth hold ~30% stocks and ~50% alternatives.
- The richer the investor, the larger the tilt toward alternative assets like private equity and hedge funds.