Rich people are making money from investments everyone else isn’t even aware of.
If you read to the end, you will really learn more about money in this article than in an MBA course. Here are: 15 Investments Rich People Make The Poor Know Nothing About.
Don’t worry if you don’t feel like reading, you can enjoy the video below or watch it on YouTube:
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Investment #1 – Whiskey and Wine
Here’s something the average person doesn’t understand:
You get rich by selling things for profit!
You stay rich by holding onto things that appreciate in value over time!
And rich people loooove leveraging their time for financial gain.
Let’s take whiskey as an example:
A 2023 whiskey isn’t worth much, but a 20yr whiskey is.
Poor people buy whiskey at the supermarket by the bottle.
Rich people buy it at the distillery by the barrel.
You don’t even have to take physical possession of the barrels; many of these distilleries or 3rd party providers will hold them for you and even arrange the sale when the time is right.
For the distillery, this creates cash, minimizes overhead while aging, and mitigates the risk of losing money.
And before you brush it off: Aging whiskey generates 10-15% returns per year.
And when it comes to wine:
Since 1988, investment-grade wines have seen a compound annual growth rate between 10 and 11 percent.
In both cases, this is a higher return on investment than many other stocks; the S&P 500 has an average return of about 10 percent per year.
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Investment #2 – Collectibles
This is one of the more interesting investments rich people make that the majority are unaware of.
- Rare Books
- Comic Books
- Toys
- Stamps
- Coins
- Sports Memorabilia
- Sneakers
- Movie Collectibles
- Trading cards
There’s even a market for Hummel figurines. These bad boys sell for as much as $5,000 apiece.
Two years ago, in July 2021, a Pikachu Illustrator card sold for $5.275 million. That’s one Pokemon card.
A Superman #1 comic book sold for an astonishing $5.3 million.
A pair of sneakers worn by Michael Jordan in the 1998 NBA Finals recently sold for $2.2 million, setting a new world record for the most expensive shoes ever purchased.
And the list goes on. If there’s a demand for it, people will start bidding.
But be careful, if the demand goes away, so will your money. We’ve seen this happen with both Beanie Babies and NFTs.
With the rise of generative AI, the NFT art market went completely down the drain.
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Investment #3 – Luxury watches and purses
Have you noticed how rich men collect watches and women have dressing rooms filled with luxury bags, specifically this particular model?
And if more of them were to show up on the market, people would jump at the opportunity to snatch them up.
Rich people focus on high-demand products that have a very limited supply.
Most people don’t know this, but you can not walk into a Rolex or a Hermes shop and buy yourself the products; that’s not how it works in rich-people land.
The stores are mostly for display purposes only.
If you qualify – meaning you align with the brand correctly – they will put you on a waiting list and call you when the product becomes available.
An Audemars Piguet Royal Oak has a waiting list of two years. It’s the same with most Rolex watches and sometimes even with luxury cars.
In the case of the Hermes Birkin bag, you buy your way up.
You get on the waiting list, and first, they offer you a lower-tier bag, which you have to purchase, or else you will not be invited back.
If you keep on shopping with them, in time you will build enough social credit to be offered a Birkin bag.
There are long waiting lists that can stretch up to six years, to just buy yourself a bag.
In the store, you will pay between $10-15,000 for a Birkin bag.
The moment you walk out of the store with it, you can easily find buyers online for 30 to 40,000 dollars.
The same thing happens with luxury watches. A Patek Philippe Nautilus watch will retail for between $30-50,000 and sell in the secondary market for over $100,000.
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Investment #4 – Private banking
Do you know how, for most people, keeping money in the bank costs them money?
They charge you when you deposit, they charge you when you withdraw and they charge you for just keeping it… Well, that’s not what happens in the case of high-net-worth individuals.
Rich people are treated very differently by banks.
They call it private banking.
This is what the average person gets for a savings account, for example, Bank of America – but know it’s a similar story with almost any other bank
And this happens in times when inflation is eating away at your buying power by 5%+ year over year.
Have you ever wondered what kind of return rich people get from keeping their money in the bank?
Prepare to be shocked. Most private banks yield an average of 7-13% yearly on cash deposited.
…
Yep.
While the bank is paying poor people $10 for every 100,000 deposited,
The same bank is giving rich people $10,000 for every $100,000 deposited.
In Europe, we received an offer for an 8% state-guaranteed return on deposits over $100,000.
Every bank has its own tier system, but you should be able to qualify for private banking services at around $250,000
Not to mention the plethora of perks the bank gives you once you’re a top-tier client. Things like concierge service, access to private events, memberships, and massive discounts on luxury products and experiences.
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Investment #5 – Art
Now, one of the most famous but also mysterious investments rich people make is fine art.
Luxury, multimillion-dollar works, quietly appear in mansions and yachts via mysterious dealers,
Only making headlines when they sell for billions as part of a tech CEOs collection.
A large part of the $1 trillion-plus art market is invisible if you’re not in the 1%. This exclusivity means the ultra-wealthy know art will behave differently as an investment;
It’s a market that is run mainly by those who actually grow richer in times of turmoil.
People then store that money in the form of famous artwork. Just look at the data: last year, high-net-worth collectors doubled their spending on art
Even as other markets around the world saw losses topping an unbelievable $36 trillion.
Now, here’s the real secret: the billionaires haven’t bought up all the art;
The global value of art is expected to grow by a whopping $1 trillion by 2026!
This means there’s still time for everyday investors…
And that’s why what Masterworks is doing is so special.
In fact, to date, Masterworks’ art investing platform has already sold over $45 million dollars worth of artwork,
With the net proceeds distributed straight to investors like you.
With Masterworks, instead of buying an entire painting, you’re investing in a portion of it,
The profits from reselling were split among shareholders. Masterworks has gone 13 for 13, every single exit handing back a return to investors like you.
In fact, Masterworks just sold two more offerings – while a banking crisis unfolds!
With such an opportunity, it’s understandable that there’s a waitlist for most new investors to get onto the platform.
But we’re a long-time partner, so if you go to alux.com/art you’ll get to skip the waitlist right away and claim your free account right now! That’s alux.com/art.
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Investment #6 – Hotel Rooms
Most people don’t know this, but you can actually buy and own hotel rooms, use them whenever you want, and when you’re not there, the hotel will rent them out, and you split the profits.
There’s actually a low barrier of entry when it comes to hotel rooms.
While the entire hotel is worth several million dollars, hotel rooms typically range from $30,000 to $250,000.
Don’t be mistaken; luxury hotel rooms or suites can easily go above the 1 million mark, but if you’re looking to own something abroad and not have to worry about the maintenance of it, this is a phenomenal way to go.
This is actually one of the cornerstones of Trump’s real-estate empire.
You can still buy apartments and rooms in most of his hotels, and they’ll monetize them for you. This is a very popular investment among rich people.
When the new Atlantis opened up in Dubai, most of the apartments in the hotel were already sold to international investors for an average of 3 to 4 million dollars a pop.
Simply go to websites like Zillow and add hotel as a keyword.
Most of these are hotel rooms or condos in hotels that can be monetized by the hotel on your behalf.
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Rooftop rights
If it can be monetized, someone will find a way to do it.
A couple of months ago, we were approached to invest in a start-up that is quietly buying the rooftop rights of buildings in a couple of cities in the US.
Why are they doing that? They’re installing solar panels on top.
The residents get to enjoy lower electrical bills, and they get to sell the electricity for profit.
Until now, rooftops were pretty wasted space, and you get to purchase rooftop rights for fairly cheap since most go un-used, but that’s probably not going to be the case very soon.
You know all these delivery workers, bringing you your Amazon, uber eats, and whatnot… Pretty soon, they’ll be replaced by drone deliveries, which will need a safe space to drop off your order.
Rooftops are going to have a moment.
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Mineral & Water Rights
There are plenty of valuable resources out there that go unexploited.
Spring and water rights are one of them. You can purchase the rights to the spring water and then sell it commercially and rich people know of these investments.
We learned about this from serial entrepreneur Jean Valvis, who has quite an interesting story.
He found a spring with high-quality water.
Bought the rights from the state, bottled the water, and created DORNA. A couple of years later, he sold the DORNA water brand to Coca-Cola.
But his thirst wasn’t quenched yet.
Once his non-compete expired, he found another spring and founded another water brand called AQUA CARPATICA, which he last year sold to Pepsi.
Multiple water exits, using basically the same business formula over and over again.
Every country has what’s called: Mineral Ownership Records
It’s a database to see who owns the rights to what in terms of natural resources.
Just search MINERAL RIGHTS for Sale + Your Country and you should be able to find auction platforms where people are bidding for them.
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Buying other people’s debt
This is a fun one.
Did you know you can actually buy your own debt for pennies on the dollar? Not only yours but multiple people’s.
Payday loans, personal loans, overdrafts, medical debt, mortgages, and even bill payments are all traded on a secondary market.
When someone doesn’t pay their debt immediately, the company that’s owed the money can choose to either try to collect it themselves or sell it off to someone else to bother with it.
That’s what collection agencies do.
The company that’s owed the money usually bundles all the unpaid debts into a single package and sells it off to someone else for 15 to 30% of the value of the debt.
The agency then tries to collect and keep the difference as profit.
There are even auction sites dedicated to buying and selling debt, that you were probably not aware of.
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Coaching & Council
Rich people leverage other people’s expertise to get ahead in life faster than everybody else.
Here’s something we want you to remember: Without external help and guidance, your only way to grow is through trial and error!
Getting professional help, like a mentor or coach, cuts the distance between where you are and where you want to be. That’s because you’re using other people’s learnings to your advantage.
This is the biggest secret and most powerful tool you have at your disposal to get there as fast as possible: have people who have done it show you the fast way there!
But mentors aren’t available everywhere and coaches who actually know what they’re doing are incredibly expensive. This is why only the rich have access to this unfair advantage.
… that is, until now.
We found those mentors and coaches. Some of the smartest people in the world and paid them to share their insights on your behalf.
Everything they’ve learned is in the Alux app, where, for less than the price of eating out, you get a full year of coaching and mentorship.
Download the app right now, start your subscription, and see just how much faster you make progress.
91% of our app users have already achieved their primary goal in life or have made significant progress towards it, while you’re out there waiting for a sign. Well, this is it!
Get the app; it’s only $99 per year, and see what happens. What do you really have to lose?
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Private Equity & Early stage startups
Did you know that you don’t have to be an entrepreneur or start a business to make money off one?
Welcome to the land of private equity.
Let’s say you and a couple of friends come together and purchase 51% of a bar. You keep all the staff and current management, but you retain most of the profits.
It’s the same with most businesses.
Real estate will get you 6-8% per year + appreciation. A floral shop, for example, will get you 45% to 100% per year. Here’s the reasoning behind rich people’s investments:
In the case of early-stage start-ups, you write a $20,000 to $50,000 ticket in exchange for 20% to 33% of a new business.
The entrepreneurs execute the vision, and if it plays out, you’re making money.
You might not realize this, but: Most millionaires have their wealth tied to real estate, but all billionaires have made their billions through private equity.
You become rich by owning parts of a business.
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Investing in emerging markets
These are the current emerging countries:
Meaning their transition is already in progress.
Most of these countries have already seen an uptick in real estate prices in the last decade.
Where the money is right now, is in the countries bordering these emerging regions.
Let’s take Turkey as an example.
You don’t want to go south because the situation is unstable, but you can go north and find the country of Georgia.
Did you know you can buy a 1 bedroom apartment by the seaside for $35,000?
They’re building 5-star hotels in Tbilisi, where you can buy hotel rooms for under $100,000 and get a 12% per year yield.
This is just an example of rich people’s investments. Take Thailand or Indonesia.
People know of Phuket or Bali, but there are other parts of the country where investment opportunities are still cheap.
African countries are going through a technological boom right now, so office space and decent units for rent in business centers are all still really affordable.
And if you’re looking for long-term investments, buy triple-A properties in areas of incredible natural beauty.
In 1959, someone bought a large property on a cliff for $10,000 in the Tamarama neighborhood of Australia. A beautiful property overlooking the bay.
Adjusted for inflation, that $10,000 would be the equivalent of $300,000 today.
Last Wednesday, the Tamarama house sold for 47 million dollars, setting an Australian record.
Back then, the Australian continent was an emerging part of the world.
Keeping with the real-estate trend:
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Square footage for real-estate developments
Investors get secret deals when it comes to property development.
When a new office or residential building is being built, the developer doesn’t want to use their own money.
So they go to private investors – a.k.a., rich people – and offer them to sell square footage at cost. The returns on these kinds of investments can get crazy, that’s why rich people love them.
Developers usually sell 30% of the square footage of the new building to these private investors, use that money to secure a loan for the rest from a bank, and get to work.
You don’t know what or where your square footage will be.
Maybe it will turn out to be apartments, studios, or office space, but since you’re buying it at cost, you’ll most certainly make a profit.
We’ve done these kinds of deals in the past, but they require a minimum investment of $1,000,000.
The realized yield was a 110% return on our money after 5 years.
The only downside is a longer wait time for your investment to pay out since you’re investing at the earliest stage possible, but if you’re partnering with a high-trust developer, the profit is almost guaranteed.
There are other real-estate options with smaller developers.
For example, you can get 12% annual returns with home developers, and their investment tickets start at only $50,000 per ticket with a lock period of 18 months. So you’re getting a total of 18% return for the 18 months you give them your money.
These kinds of behind-closed-doors examples are the main reason people subscribe to Alux.
You won’t know about these deals unless you’ve done them, so make sure you read everything we have around here.
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Hedge funds
Hedge funds are institutions designed to make as much money as possible for their investors.
Remember the private banking example of how poor people get screwed by banks and how private banks are offering 10% returns to their high-tier clients?
Well, there’s a level above that, and these institutions are called hedge funds.
It used to be that the minimum amount to get started with a hedge fund was 100,000 dollars.
But honestly, unless you have at least a million – or half a million with great connections -, any respectable fund won’t even talk to you.
The goal here is to outperform the market, but the keyword is consistency.
A fund might have a great year, and you’ll see returns of 30 or 40% for that single year, but maybe the next they’ll only do 5% or even lose money.
So if the S&P 500 returns 10% on average, your fund should be able to at least beat that.
For example, the Jim Simons Fund, Renaissance Technologies – which is seen as one of the most consistent performers in this space – returns an average of 40% per 3-year brackets.
These are the Bobby Axelrod funds, the wolves of Wall Street. They are always looking to be one step ahead of the market in order to maximize returns.
And the last item on our list:
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Marrying Rich
This is something that telenovelas and children’s stories popularized.
The idea of the prince marrying the poor servant
The idea of the wealthy millionaire falling in love with the sales associate in the store is appealing, but it doesn’t actually happen that way.
Poor people talk a lot about marrying rich people, but it almost never happens.
You usually end up marrying within your level of income or slightly up, but never 1000 times above.
Marrying rich people is something that happens disproportionally more often among the wealthy, even if the wealth disparity is multiple times higher.
What that means:
If you’re a millionaire, you’re more likely to marry into a billionaire family!
Then you are supposed to marry a millionaire if you are poor!
The main reason is proximity.
The difference in lifestyle between millionaires and billionaires isn’t that high, so statistically, you’re more likely to be in the same environment and get the opportunity to engage.
So, if you want to marry rich – and this applies to both men and women – first make yourself rich!
And then marry up.
And just to keep up the tradition, of course, there’s a secret bonus reserved for those of you who read until the very end:
Bonus
Network commission
Information and trust exponentially go up in value the higher the numbers on the table.
What that means is that the right connection and the right intro could be worth fortunes.
The largest commission we know about being paid for an introduction was 2.5 million dollars, just for someone to set up a meeting.
This was between a big commercial developer and one of the richest people in the country. A third party arranged the meeting, and the resulting investment was in the hundreds of millions.
The third-party vouched for both sides of the table and assured both sides that the other is trustworthy enough to move forward with the deal.
That’s the power of reputation and being connected; you can get paid for bringing people to the table.
On a lower level, there are plenty of examples of finder’s fees.
If you bring a great investment opportunity to an investor, even if you don’t have money to put in yourself, you could still get a cash finder’s fee or a small percentage of the outcome.
By the way, Grant Cardone does this all the time, where he cuts deals without using any of his own money.
He just leverages his reputation to retain 30% of the deals he creates for others.
Well, now you know: If you want to be rich, you have to think and act like the rich do…
You have to see how the game will play out in the future. The better you are at understanding what’s happening behind the scenes, the better deal you will be able to make.
These were some of the investments the rich make but many know nothing about. There is a lot to learn from this article, so make sure you put it to good use. See you next time.
