Dave Dodson wrote:
- quote -

I completely missed the bottom portion of these pages/tables, that show
breakdowns based on assets (as opposed to income). That you for
pointing out the data in front of me that I did not see.

--
Mark Freeland
nNeEwTs[at]sonic.net

A few comments based on my experiences.

If the person who is rich made the money they tend to use their
knowledge and experiences to find other investments in the same general
area. That activity is coupled with some rather conservative
investments so if the higher risks go bad they have created a floor to
provide for the family.

If the person with the funds did not earn the funds then they tend to
be more conservative or they tend to lose the funds.

So, one way to manage risk is to manage your education and experience.
To train yourself so you know more about your investment options.
Asking the original question here is an example of preparing before you
get there.

If you want to be hands off and are looking for 'safe' expect that you
will be able to maintain your investments but not likely to see them
grow. Inflation and the low risk investments tend to cancel themselves
out. If you use a mixed portfolio which includes equities and real
estate then you can achieve more while have some volatility. Lots of
studies exist as to what is a sustainable level over long periods of
time with little maintenance.

I was talking to a fund manager yesterday who is well connected in
Switzerland. He said you would be amazed at the amount of money that is
'invested' in money market vehicles barely earning the inflation rate.
Hence many of world's rich are not investing as much as parking the
funds so they are there later.

I personally focus on real estate (RE) investments and find much of the
world wealth is in RE of some form. It is a favorite of many wealth
investors if you strip out their personal home(s) from the totals. I do
not qualify for most people's definition of wealthy though I have a
history of working with a representative group of them when working for
Swiss Bank Corporation.

John

I can see that. In each of the examples that I cited, the client did
not manage the asset at all. In fact, all but one didn't know anything
about the asset (other than what was presented to them in the
investment paperwork). They all earned their wealth via other means or
inherited it and then simply invested in the various assets. In all
(but that one case again) the investments were packaged by various
financial advisors (including my firm on one deal) and offered as a
"private placement" to "accredited investors." I would hardly call
these people entrepreneurs or businessmen, but I suppose there are
others out there that would fit that definition. So my answer to the
orignal poster's query, is that it is my experience that the truly
wealthy invest in various private placement investments -- real estate
or other hard assets. If you suddently have an extra several million
laying around, you will probably want to consider any number of
"private placement" investment opportunities.


Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php

- quote -

Yield is always a nice thing.

- quote -

At the risk of splitting hairs, I contend a person who has nearly all of
his net worth committed to a single type of asset is more of a
"businessman" or an "entrepreneur" than an "investor." These individuals
typically manage or oversee the income-producing asset full time. Granted,
some of these people are very wealthy. But all their effort and all their
money is tied up in their business. I intrepeted the original poster's
query to be what those businessmen do with their millions once they
achieve a high net worth. But of course you know what happens when you
ASSuME. ;-)

<inkexit[at]yahoo.com> wrote in message
news:1141489998.980588.198800[at]i39g2000cwa.googlegroups.com...
- quote -

No.

I want some of what you're smokin'. <grin> .

- quote -

I don't know if I agree with that. Of the few really wealthy clients
that I have worked with, they do NOT tend to invest much in the market.
Instead, they invest in revenue streams. For example, one client
invests in uranium mines and oil/gas leases, another one invests in
tree/timber farms in Canada and in resort community developments in
developing countries, another one invests in parking lots in downtown
locations and wharfs/docks. In each of those cases, the client had
very little liquid cash flow and almost no traditional investment
assets (so little that most financial planners wouldn't talk to them).


Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php

$2mm is not investment bank type of money. For many financial advisors
at major firms (unfortunately, I am only familiar with NY), this is a
typical client. These people own some bonds (a portion are often
mucipal bonds if they are in the 33% or 35% tax bracket and often AMT
sensitive), a diversified equity (stock) portfolio which are more often
seperately managed accounts (similar to mutual funds) and their home is
a large portion. It is not too different for a client with $200K than
$2mm. Once a client gets into the $5mm range there are other additions
such as hedge funds, commodities, private equity, etc.

Hope this helps. Let your portfolio evolve as your income does.

"TB" <borekfm[at]pacbell.net> wrote in message
newsoMOf.20340$2O6.5571[at]newssvr12.news.prodigy.com...
- quote -

I believe the comments were made in the context of '...Barrons [periodic]
surveys [of] the "private banking" industry...". In that context, they're
probably correct, i.e., < $2M won't get you the attention of those banks
and investment counselors targeting "the rich".

Paul Michael Brown wrote:
- quote -

Tough neighborhood on MIFP!

I believe $2M in liquid assets would put you in either the 97th or 98th
percentile of net worth in the US. Hopefully that qualifies as "rich"!

-Tad

- quote -

Barrons periodically surveys the "private banking" industry, and the
stories give some insight into this topic.

First, $2 million is liquid assets is nowhere near "rich." Perhaps $10
million would qualify as "high net worth."

As for what type of investments are favored by the wealthy, it's
impossible to generalize. But it's fair to say they start with the same
things we have: stocks, bonds, and cash. But if you're truly well heeled
you're also probably invested in some hedge funds, some private equity and
perhaps some illiquid income producing assets like commercial real estate.
(The Harvard endowment, for example, owns quite a bit of timber.)

Just my opinion, but bars make lousy investments. (Old joke: What's the
difference between a monkey and bartender? Nothing as far as making the
drinks is concerned, but you gotta teach the monkey to steal.) McDonald's
franchises were very lucrative in the 60s and 70s, but my sense is that
they are less so today.

- quote -

Given these requirements, you're probably talking fixed income. If you've
got enough money, the private bankers will construct a diversified bond
portfolio that's matched to your age, risk tolerance, state of residence,
etc. If you're less flush, you could probably do almost as well by
investing in a total bond market index fund, or PIMCO's flagship fund.

Michael Siemon <mlsiemon[at]sonic.net> writes:
- quote -

An intersting thing happens when they talk about the long-term
records of certain classes of mutual funds - the crappy ones
fold up and the ones which survive and go on into those
statistics are the best of them. This is called "survivor bias".
And it affects measures of how well business startups do as
well. If you ignore survivor bias, you get numbers which
are pretty much gibberish.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

In article <mlsiemon-EAF119.00394805032006[at]nnrp-virt.nntp.sonic.net> ,
Michael Siemon <mlsiemon[at]sonic.net> wrote:

- quote -

Wealthy folks normally have a core holding of very safe and
conservative investments. Ideally, they have saved up to a
point of "critical mass" where the interest on these
conservative investments can provide them with a sufficient
annual income without having to tap into principal.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

In article <1141545325.251294.110820[at]z34g2000cwc.googlegroups.com> ,
"Dave Dodson" <dave_and_darla[at]Juno.com> wrote:

- quote -

And when his -- well intended, seriously researched, earnestly
managed -- business fails, then what?

In article <1141545401.311008.299280[at]i39g2000cwa.googlegroups.com> ,
"Dave Dodson" <dave_and_darla[at]Juno.com> wrote:

- quote -

The majority of business startups fail. Deal with it.

Michael Siemon wrote:
- quote -

You will one carefully placed word in my posting: "successful."
Successful businesses don't fail.

Dave

Chris Cowles writes:
- quote -

I take it from the OP's original posting that he is not now wealthy.
I'm only suggesting that a good way to get wealthy is to start and run
as successful business. Now. Then, when he is wealthy, he will have a
lot of experience and will know what do invest in.

Dave

inkexit[at]yahoo.com wrote:
- quote -

No, that's not right at all.

Here's the most recent T-bill auction results:
http://wwws.publicdebt.treas.gov/AI/OFBills

A $100000 6-month T-bill would have cost $97684.56, and returns $100000
after 6 months, for a annualized yield of about 4.75%.

Best regards,
Bob

inkexit[at]yahoo.com writes:

- quote -

No -- it sounds very wrong. That's over a 20% annualized return.
6-month t0bills have an approx annualized yield of 4.7%.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

In article <J1mOf.34984$Ly6.27167[at]bignews5.bellsouth.net> ,
"Chris Cowles" <spam_magnet[at]remove-me-bellsouth.net> wrote:

- quote -

It also ignores the statistics on business failures. :-)
There can, indeed, be high return, but the risk is at
least commensurate with that!

"Dave Dodson" <dave_and_darla[at]Juno.com> wrote in message
news:1141500641.299777.43710[at]z34g2000cwc.googlegroups.com...
- quote -

That doesn't sound like the passive investment the OP seems to seek.
--
Chris Cowles
Gainesville, FL