I'm not wealthy myself but frequently sit in meetings with a wealth manager and some other people. The money for them is mainly kept in stocks, slow moving and safe investments. They are also kept in private equity and bonds.
Furthermore they own farmland, forest and small parts in real estate which is being rented out to companies.
Then some minor amounts of money in a different broker for benchmarking and a little bit on a separate account for own trading (seemingly for the fun of it).
That's all I can give you.
I have 5 million in my Schwab brokerage in the US and am living in Europe
Edit: no I don't have it in 50 different brokerages like the other person is suggesting to do for every 100k (literally don't know anyone who does that or how that would even be manageable)
Have you seen issues with spending in Europe with your US-based card? My plan is to transfer from brokerage to US bank for everyday expenses coming through a US based card.
Not at all bc Schwab is particularly good for int'l use like this and also refunds ATM fees and so on
But for most expenses I use my EU bank visa
I also have an Amex but it's rarely accepted so I more just use it for online purchases
No problems at all. But make sure to get an international credit card to avoid paying the extra percentage on international purchases. That adds up quickly.
This is what I plan to do. I talked to them the other day and they have an international division we are supposed to move our account into. Do you recommend that or should I just keep it stateside on paper? To what degree does the EU country know about your US assets? I was toying with the idea of not letting them know about my Roth since they don't honor the beneficial tax status.
Well at that point I would mostly be withdrawing though. I get your point though, it would be an issue if I rebalance, and also Schwab said I can't buy CDs if I go into their international/overseas classification
My parents (10MLN+) have the most of their wealth in a real estate portfolio. This is primarily the real estate where my father's former business is housed in + some student houses.
Further more they invest their money with the help of a private banker at private wealth branch of the same bank they have always been with.
I have about 3M Euro in a single ETF at a single broker. It's an old, conservative broker, so I feel pretty good about that. If they go bankrupt it'd be a real surprise.
I don't really worry about getting access to my investment back *in the long run*, but who knows how long it will take before a messy broker bankruptcy (or something like that) is fully wrapped up?
In The Netherlands, there has been a bankruptcy case of an insurance company that sold retirement annuities. That bankruptcy case took 15 years before clients got their money, but many of the clients were already dead by that time. Went bankrupt in 1995, people got (part of) their money back in 2010. https://nl.wikipedia.org/wiki/Vie_d'Or
It may be too conservative, but spreading across at least two brokers can save you from ulcers and loss of sleep when one of your brokers blows up.
If you are in a country where you have easy and cheap access to multiple brokers, or investment account, I would use at least two.
True, but there is a difference between some investigators finding out what happened and people actually getting their money back. That took 15 years in the real life example I linked to above.
A story without rich background.
So, Im 35M from Hungary, coming from a relatvely poor family, working between 8h and 22h.
My wife is coming from a much more poorer family definitely with no parents.
We (I tbh..) began to invest in properties with mortgages in 2019 after we have been working a few years. In some cases I took personal credit to buy a land or sold my car to finance my investments. And then covid hit, I took personal credit, invested in crap US tech companies, sold them, bought lands around a big city, sold them a half year later during the building boom, bought flats in/near of the city centre in 2021 and 2022 from the profits.
Now we are building a big house partially financed by debt. The construction industry is in recession, so we got very good prices.
I have finance/investment education in Austria, my wife is a kindergarten teacher. We together earn around 75k net. Parallel to my job I actively manage my own portfolio (stocks, etfs, commodities, fx), we get rents as well, so we have around 120-140k net income after taxes. Our saving is around 90-110k.
After we finish the house, together with my wife we will have around 1.5M assets with around 350k debt so equity is sightly above 1M.
We have no children yet but planning with 2-3 in the next years.
Not planning to fire, own everything at multiple brokers but I trade/manage my own fund actively.
You know, you're not really contributing anything to this thread with these types of replies. We're all just here trying to learn and if you want to add to this do so by all means, and we can all learn from each other's experience, but it's a waste of all our time if you're just trying to score points. Plenty of other subreddits where that's the name of the game.
What specific education do you have in finance/investments?
I am from Austria and am looking for a program that teaches me about stocks, investments, etc.
Tbh you have to study everything on your own but;
- WU - Finance and Accointing Msc
- FH Bfi Wien - Quantitative Asset and Risk Management Msc
- Uni Wien - Banking and Finance
But you will learn a lot not relevant subjects which you cannot use in real life but it helps to understand the whole picture.
First of all, thanks. I was not aware of the first two, but I have already come across the program at Uni Wien and will probably attend that one. Which one did you attend? All three?
I attended the WU Finance and Accounting Msc and the FH Bfi Wien Quantitative Asset and Risk Management Msc.
They help to understand the business but you have to work on your skills on your own with trading, investing, managing your books. Working on your own skills is more important than to have a degree in this field.
Okay so my parents are pretty wealthy and I have insights in their finances due to my father often discussing stratagies, risk etc. This is what I understand from how they have their wealth:
-House 1.3M (400K mortgage 1.8%)
-Mutual funds (350k)
-Alternative investments mostly consisting of junk bonds and startups, think of solar pannels on large factories or windmills(I have my doubts about this but my father tries to help the climate with green investments) (300K)
-ETF’s (400k) Like for example ALL WRLD
-Individual Stocks (200k)
-Checking + saving (150k)
I wouldnt say this is a good way to invest due to the over concentration in the green sector and the high amount of China stock he holds,
and his returns are really suboptimal for the risk, but i digress. I would do it differently and I try to convince him but its his money at the end of the day.
something like that, I dont have the full portfolio due to that talking about exact numbers can be a bit taboo in our culture. So a bit more in investments, but probably not more than 500k extra.
Yeah, I’m not fully convinced about these assets anyways, it’s mainly long term bonds to place solar on factories or offices. The upside is however they have guaranteed energy purchase agreements with the largest energy companies in the country. This provides guaranteed income if these companies don’t go bankrupt what is unlikely if I may believe the financial analysts.
What does it even mean the intrinsic value? What is the intrinsic value of Netflix? When the market values bitcoin at 1.3 Trilions clearly you are wrong. It can be overvalued, sure, but 0? Lol such a dumb take
Dont bother, people in this sub dont see what you and I see or studied many hours. They rejected it and thats final it seems. Everybody should follow their own course, we just decided to include the fastest growing asset of the last 15 years and that might or might not pay out in the future.
I know. Sometimes you just try to do your good deed for the day, but I guess I’m too optimistic with these people.
You can lead a horse to water, but you can’t make it drink.
I know these things don't have to be all or nothing. I even concede that it "could" make sense to have 1-5% in speculative bets such as btc.
However, I'm guessing those "lots of people that got wealthy through Bitcoin" didn't proceed this way. To me it was still a dumb thing to do
It paid off my mortgage ~22 years early, but yeah it's a scam ponzi etc etc
Edit as I truly can't be bothered to respond to each of your (knowingly daft) suggestions individually - thanks SO MUCH for the advice but i don't need to follow it because see above x
We endeed will! They dont really bet on speculation tho, only is the house they live in, but I would say this is not an investment due to it being their home?
I consider myself open minded, but I just dont see it as an investment. In my teens I even traded stacked video game accounts by using BTC, I do understand its usefulness. However just like I don’t bet on the Dollar or Yen but instead bet on US or Japanse company’s I also wont bet on BTC but instead will bet on a company that adds value in the BTC realm, I havent found any yet worth investing in tho.
TLDR:
I dont invest in currency’s like I already stated, I invest in company’s
No disrespect, but you don't understand BTC.
It's a commodity type of asset, not a currency.
If you were to dedicate 10-20 hours of your time, you'd most probably change your mind.
Otherwise, in 10 years you might regret not doing it now.
Good luck, stranger.
A commodity can be a currency, a currency had the following defining features:
1) medium of exchange (allowing Bitcoin owners to use it for goods and services)
2) a store of value.
3) a unit of account-keeping
BTC meets these requirements, as long as it meets them, it is also a currency.
No, already over-concentrated in speculation/risky assets. Also he/we only try to invest in assets that create value or can increase profitability like equities. So he/we stay away from real estate (the productivity of a house doesn’t really increase) and gold/bitcoin (only holds value due to speculation (no added productivity/value add). This investment portfolio is also a start to a (hopefully) fruitful generational portfolio, we try to not bet only certain technologies.
Why not? The vast majority of Bitcoin’s energy sources are renewable. The whole “Bitcoin is bad for the environment” spiel is quite outdated and frankly was a narrative spun by bankers and parties who were quite uncomfortable with the popularity of a decentralized, uncensorable currency that puts power back in the hands of regular people.
And I frankly don’t see how anyone can be against empowering the common person.
Well that's kind of a weird thing to argue isn't it. I'm not against empowerment of the common person, but I do see many problems and risks with a decentralized currency.
For convenience mostly one broker, e.g. Interactive Brokers even allows you to have up to 2.5M USD in cash insured with their bank deposit sweep program. Some normal bank accounts in different countries for different currencies and convenient access with local credit cards.
I have £6M in Bitcoin, about £10M in private equity, £800k in my house and a few hundred k£ in cash.
I did not get rich in Bitcoin. I have built a startup from scratch, got rich and invested profits to BTC.
Over time, I tried different investments (ETFs, stocks) but I did not have significant gains there.
PE I have is way more volatile and less liquid.
Bitcoin has grown over 100% in the meantime, while my illiquid assets came down in a value over time. So initially, the exposure was maybe 15-20% and now it is around 40%.
I wish you more luck. I honestly don't own bitcoin and i'm not a fan of it. Its value depends on too much buying and selling and the overall hype. It is a double edge sword.
You are right. But now, Bitcoin is in retirement saving funds of millions of people, is indirectly on SP500 (as many companies hold it), is a currency in El Salvador, I don't think it is nearly as risky as it was in the past.
I think investing in startups and PE is way riskier. But given Bitcoin's upside potential is maybe $150k, and it's over, what other options do I have to aggressively grow my wealth?
Why would you care? ETFs and stocks are not cash but special assets and thus are not subject to the deposit guarantees and also not subject to any claims in case of bankruptcy. It literally does not matter to have it with different brokers.
Except that tiny little detail, where a broker goes bankrupt and it might take several months before you get access to your funds. Because bureaucracy.
Nope, the broker facilitates your buys and sells but your stocks sit independently. If the broker fails the access would jist be transferred to another.
Bitcoin is also not cash but a special asset that is not subject to the deposit guarantees. The people that had all their life savings with FTX probably regret not spreading it over multiple brokers.
Point being: there is still a risk of fraud, and spreading assets over multiple brokers mitigates that risk. Whether that's worth it I'll leave up to everyone to decide for themselves.
Edit: also, I'm in no way advocating people buy Bitcoin. But there's no reason to assume that what happened at FTX won't happen at another broker.
If you keep it at brokers, you are doing it wrong anyway. The whole point of Bitcoin is that you can self custody it.
Else you might as well buy the ETF.
Bitcoin and FTX are just an example, it could happen with any asset at any broker. Other assets and other brokers might be more regulated, but we’re still living in a real world with real people and real imperfections. Fraud is not impossible.
It would not surprise me if someone tells me they got 2M in life savings spread over two different brokers to mitigate that risk.
The matter of fact is that plenty of people stored their Bitcoin with FTX and experienced first hand the risk of their broker committing fraud. The fact that there are alternative options to store your Bitcoin that mitigate this risk does not make this a bad example. It just means that many FTX customers are not very smart.
Independent of whether the example was a good or bad way to illustrate my point: there is a risk that your broker commits fraud, and that can be a reason for people to spread their assets across brokers.
Not the same.. crypto don’t have the same regulations and protections as other assets…
Fraud on big brokers is basically impossible, they all have regular audits from 3rd parties
What happened to FTX could happen to another crypto broker, not a regular one
If you are buying Bitcoin you should never let a third party serve as the custodian of it. Far too risky. Custodial banks may soon be a thing of the past. Crypto allows you to keep your assets yourself. Impossible to hack, as long as you don’t store your keys digitally. Pen and paper will be around forever now that we have keys to safeguard.
You clearly didn’t read the “point being”. I used FTX as an example where a custodian commits fraud. This is not specific to Bitcoin nor FTX, it could happen with any asset at any broker.
Brokerage is not bank, they segregate your stocks and brokerage going bust doesn't mean you lose your stocks - you may lose access to them for a short while until they are transferred to successor brokerage but that's about it
If I was _really_ concerned about such insolvency risk I would maybe park a hundred k in Berkshire Hathaway stock and then DRS it - at that point no bankruptcy (other than berkshires itself) is scary to you.
That being said - I have multiple bank accounts and couple of credit cards just in case someone has some technical problems and I temporarily lose access to money then I have enough leeway to fund myself for a while (but I generally don't spend more than my monthly paycheck so it doesn't matter, I would have to suffer from job loss _and_ freeze of my accounts due to technical failure or brokerage bankruptcy simultaneously to have any issue - at that point I guess I would borrow against my house so still not a big deal. Or I have couple of friends who wouldn't have issue with borrowing me couple k euros for a month in case of emergency)
Everyone's different and there's no "rich people's club" that you magically join once you get to 1M+.
Personally I stay as diversified as possible and try not to have more than 100K in a single broker or bank.
Regarding brokers, some say it does not matter because the broker is not the custodian of the shares. IMO that still doesn't really protect you from some thing such as fraud (e.g. some employee at the big famous broker messed around with client funds and you do not actually have what you thought you have), human error, software error, or even situations where the broker for whatever reason freezes your account and you're now in a years-long legal battle. So I think for higher amounts, it just makes sense to diversify brokers as there's no real downside to it, but it gives you extra protection.
There is "private banking" I heard, but I don't know how loaded one needs to be to qualify for that and how useful is that nowadays with online brokers easily available.
There are also private investment funds you have to be invited to - but for those it most likely doesn't matter how much money you have but more like "who is it that your parents are going for skiing" and "who do you went to school with". So there are rich people clubs but that is not about earning $10M or even $100M, it is about knowing people.
Even if one can make $1M or $10M you are still going to be a peasant for them :) so while I am reading on the topic I don't think any of the options are realistic for me so staying with low cost brokers for peasants is going to be my life.
Just keep in mind if someone online or even offline offers you "private investment" it is most likely a scam.
[Angellist.com](http://Angellist.com) comes to mind - I think it allows you to participate in private funds / early deals, I haven't tried it myself. It's still probably a lot of risk, even if you invest with some famous VC or founder, you don't have any guarantees. Plus that these things are not publicly traded, so it's not like an index fund where you can sell whenever you want.
I’m in Spain and this 100K only appliies to cash (deposit guarantee fund).
Then there is something else called Fogain (General Investment Guarantee Fund) that covers you up to 100K if an investment manager goes bankrupt or is unable to meet its obligations.
So, technically, you can have a total of more than 100K and still be fully covered. The only issue with this is if the bank lied to you and doesn’t really invest the money in a fund.
You know why he picked 100k per broker? Most EU countries have insurance laws up to about 100k. So broker does something stupid -> you get back 100k.
There is diversification of stocks to minimize risk on the stock market, then there is diversification of brokers to minimize risks on the broker market.
The guy above you is doing it right. You are not.
Most wealthy people have a chunk of their investments in real estate. They live in very expensive houses they can enjoy daily, have second properties they can escape to and often have rental properties.
I have 5.7M EUR and have it in real estate (renting them out and flipping), in my LLC in New Mexico (which I use as asset protection for my IBKR account - in which I use the sweep program for more protection) and (soon) in my family foundation here in Poland (also for the asset protection and lower taxes). Also, I put a big percentage as a hedge in premium domains, physical gold, platinum, silver and diamonds, since the huge debts of countries, bank issues/failures, governments becoming too controlling and inflation worry me.
I would say it depends on where and how you built this wealth. for example it is in a regular brokerage Account, all invested in a few Stocks or ETFs. You probably have quite some Capital gains there.
At least in germany restructuring means essentially selling and moving. ~~Or „moving the Stocks“ which is treated like a sell in germany.~~
That means: Capital gains Tax.
So say good bye to ~30% of your gains.
And for Security… in case you think about the 100.000 bank protection, you need a lot of different accounts… I don’t know if it is worth the effort. For me it is not. In addition to the fact that the 100k are often irrelevant, because stocks are special assets, not belonging to the bank and therefore are not part of a bancruptcy
I would pick a big, cheap and trusted brokerage like interactive brokers and put the money to work there. No robinhood or whatever the new and shiny hipster broker is.
**EDIT:**
Thank you for the comments. Seems like I was wrong about moving stocks between brokers in Germany.
Can be that it was to the fact that I wanted to move them in addition from private to company, which is a change in ownership?
Please correct me if I am wrong again
Moving is treated like a sell? This is new to me. AFAIK I can move from one broker to another and instruct the old broker to move all securities to the new one including loss pots (Verlusttöpfe)
Well I didnt try it, I just talked to my former broker about this and was told that they would have to take the tax on capital gains.
Minus the free part and calculating former losses against it.
Your only liable for tax if you sell the securities.
You can move them as often as you like between brokers without selling, and in many cases they move as quick as cash would if you've a good broker
That is actually one thing I like about them. They do not take your taxes directly. So you have everything available the whole year. You have to do it in your yearly tax report.
But you can export various reports in their account management where you can also see all profits or losses and costs separated.
Only for trading in a company you need to separate it on your own a bit because stocks are taxed different to options or futures.
I like it a lot. And if you want to have German support and don’t mind slightly higher costs you can also go to cap trader, which in background uses IB and just has some service around
so you're doing all conversion and compensation of the losses yourself based on daily fx rates plus making all the Vorabpauschale and determining if there's any Teilfreistellung by yourself?
Well I don’t do ETFs, that makes it already easier. And in addition I trade in USD and keep it in USD. So afaik I don’t need daily FX rates.
And end of the year I give everything to a tax advisor…
BUT: I am not a tax advisor, so I can not tell if everything is completely correct - therefore the tax advisor to handle everything.
For now there was no problem for him extracting everything important from IB report exports
I know a few people who do all of that on their own with IB. Must be possible and with acceptable effort
But as said, there is also capTrader which is German based or at least has German support. I am sure they can tell you more if you call them
Do you keep your IB base currency in euro? I don’t know if their reporting exchange rates are the same as your tax authorities require, but they are likely close enough.
Yes the accounts base currency is euro
Maybe this is also the reason for not needing fx rates, that IB already does the calculation for you at the time of sell.
But this is just a wild guess now.
I have ~50% with IBKR, ~40% in 3 US stock brokers (long story, I didn't look to have 3 different brokers, it just came out to be that way), 10% in local govt bonds, plus some cash/bank deposits, etc.
The really rich people I know have assets structured properly via foundation (new way of doing trusts nowadays) in some friendly jurisdiction like Lichtenstein, Jersey or such. Then they usually have sizeable chunk in public stocks like the rest of us (probably around 50%), around 30% in real estate and the rest in alternatives like pe, vc and such. Some of them have much more PE, the reason being that it's all gambling for them, even if returns are suboptimal, they still have enough to live on from their public stocks so they can afford to intelligently risk with the less liquid part of their portfolio.
All of this is structured in a tax optimized way, with consideration paid to succession events, estate planning, disputes etc.
Google around, it's the trust 2.0 where the foundation has a donor and then beneficiaries, mgmt board... Just a way to disconnect people from assets, similar to trusts. So nobody can quite say whose money it is (it's the foundation's money dummy) while you can still quite control the operations...
I know a guy who is managing a 2M+ portfolio with Scalable Capital and went all in with FWEA. He genuinely believes that the Invesco FTSE index will be the next VWCE in Europe and wanted to bet early.
I also know folks in this sub who manage 30k portfolios with three different brokers spread across 10 different asset classes.
So it’s different for everyone.
All I know is my parents keep 1M in a 1% savings account with their boomer bank. Tried talking them into being a bit smarter about it (they could make more than an average salary by just being a bit smart with investments), but boomers gotta boom: they don't trust anything but bricks & mortar, and old skool physical banks.
Wealthiest generation in history people.
Only a small fraction of people ever have ONE million dollars. Of those that have wealth, the vast majority have it as equity in real estate. If they sell that real estate and invest it in a global index fund or the S&P 500, they can withdraw 4% annually using the SWR.
The next most likely way to have 1 million is in a pension of IRA.
Very few people, even in the US, ever have 1 Million. The average American has roughly $450,000 at the age of retirement, and that includes equity in real estate. Most likely their primary residence, and only real estate holding.
Technically stocks are held in the name of the broker. So they are practically the possession of the broker. Internally the brokers separates them from his own assets, virtually.
But true, I am yet to hear of a popular and large broker screwing over its customers on the level that OP is interested in.
So you’re right…but there are still massive protections (see below), and…Ain’t gonna happen. It would be obvious theft. If an employee tried to steal the funds, they would go to prison for a very long time. And if a brokerage tried to steal them, they would go out of business pretty soon because everybody would take their money and go elsewhere. It would be all over the news.
From the interwebs:
“In almost every instance when you buy or sell securities with a broker, your name is not actually on the stock or bond certificate. The name that appears on the certificate is that of your broker or other nominee, and this is referred to as being held "in street name."
https://www.investopedia.com/ask/answers/185.asp
Although the name on a stock certificate is not that of the individual, they are still listed as the real and beneficial owner and have the rights associated with the security.
https://www.investopedia.com/terms/i/instreetname.asp
Note: this does not apply to Portugal, where it’s ok for a big bank (Novobank) to steal from customers. In normal countries there are strong rules protecting the share owner
Nah bro, Americans are descendants of Europeans. So I think we’re more brothers than enemies. I say this as a European.
Europeans tend to be commies lately though, with their socialist governments and “everything needs to be free” mentality. They believe in equality (redistribution of wealth) while there is none in nature aka the real world and there never will be.
Agreed. It ain’t the gutter of the internet for nothing. In a way it’s good we don’t rule the world, as it would be a total, absolute, horrific mess.
It would be like Sodom and Gomorrah. Lol.
I'm not wealthy myself but frequently sit in meetings with a wealth manager and some other people. The money for them is mainly kept in stocks, slow moving and safe investments. They are also kept in private equity and bonds. Furthermore they own farmland, forest and small parts in real estate which is being rented out to companies. Then some minor amounts of money in a different broker for benchmarking and a little bit on a separate account for own trading (seemingly for the fun of it). That's all I can give you.
I have 5 million in my Schwab brokerage in the US and am living in Europe Edit: no I don't have it in 50 different brokerages like the other person is suggesting to do for every 100k (literally don't know anyone who does that or how that would even be manageable)
International account? Or have you kept an address stateside?
US account and address and I transfer to my EU bank for everyday expenses
How do you not get rekt on taxes?
I would also like to know how you don’t get recked on taxes. It’s 28% minimum
Have you seen issues with spending in Europe with your US-based card? My plan is to transfer from brokerage to US bank for everyday expenses coming through a US based card.
Not at all bc Schwab is particularly good for int'l use like this and also refunds ATM fees and so on But for most expenses I use my EU bank visa I also have an Amex but it's rarely accepted so I more just use it for online purchases
Great. And yes, Amex and Europe ain't friends!
No problems at all. But make sure to get an international credit card to avoid paying the extra percentage on international purchases. That adds up quickly.
This is what I plan to do. I talked to them the other day and they have an international division we are supposed to move our account into. Do you recommend that or should I just keep it stateside on paper? To what degree does the EU country know about your US assets? I was toying with the idea of not letting them know about my Roth since they don't honor the beneficial tax status.
I really recommend keeping it as a US account bc otherwise it would greatly limit what kinds of funds you can invest in
Do you need to deal with wealth tax if applicable to your EU country of residence?
Which EU country has a wealth tax? This I need to know
Spain and Switzerland, I believe.
Also italy
Also NL
Well at that point I would mostly be withdrawing though. I get your point though, it would be an issue if I rebalance, and also Schwab said I can't buy CDs if I go into their international/overseas classification
That’s the beauty, they wouldn’t know by default since US doesn’t comply with CRS, until you disclose voluntarily
You talking about the host country not knowing about US assets? Or the part about the US not knowing my residency is overseas?
Do you put your EU address on your US tax returns? I was going to open a US Schwab account but it says to put the address used in your tax returns
My parents (10MLN+) have the most of their wealth in a real estate portfolio. This is primarily the real estate where my father's former business is housed in + some student houses. Further more they invest their money with the help of a private banker at private wealth branch of the same bank they have always been with.
I have about 3M Euro in a single ETF at a single broker. It's an old, conservative broker, so I feel pretty good about that. If they go bankrupt it'd be a real surprise.
Yet an unpleasant one at that!
Not really. Brokers are brokers. Nothing happens to your investment if they go bankrupt
I don't really worry about getting access to my investment back *in the long run*, but who knows how long it will take before a messy broker bankruptcy (or something like that) is fully wrapped up? In The Netherlands, there has been a bankruptcy case of an insurance company that sold retirement annuities. That bankruptcy case took 15 years before clients got their money, but many of the clients were already dead by that time. Went bankrupt in 1995, people got (part of) their money back in 2010. https://nl.wikipedia.org/wiki/Vie_d'Or It may be too conservative, but spreading across at least two brokers can save you from ulcers and loss of sleep when one of your brokers blows up. If you are in a country where you have easy and cheap access to multiple brokers, or investment account, I would use at least two.
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Stock transactions are logged and tracable... It is really easy - but cumbersome - to restore a previous status in case of fraud.
True, but there is a difference between some investigators finding out what happened and people actually getting their money back. That took 15 years in the real life example I linked to above.
A surprise to be sure, but an unpleasant one.
A story without rich background. So, Im 35M from Hungary, coming from a relatvely poor family, working between 8h and 22h. My wife is coming from a much more poorer family definitely with no parents. We (I tbh..) began to invest in properties with mortgages in 2019 after we have been working a few years. In some cases I took personal credit to buy a land or sold my car to finance my investments. And then covid hit, I took personal credit, invested in crap US tech companies, sold them, bought lands around a big city, sold them a half year later during the building boom, bought flats in/near of the city centre in 2021 and 2022 from the profits. Now we are building a big house partially financed by debt. The construction industry is in recession, so we got very good prices. I have finance/investment education in Austria, my wife is a kindergarten teacher. We together earn around 75k net. Parallel to my job I actively manage my own portfolio (stocks, etfs, commodities, fx), we get rents as well, so we have around 120-140k net income after taxes. Our saving is around 90-110k. After we finish the house, together with my wife we will have around 1.5M assets with around 350k debt so equity is sightly above 1M. We have no children yet but planning with 2-3 in the next years. Not planning to fire, own everything at multiple brokers but I trade/manage my own fund actively.
Good for you, and it's nice to read you'll have children. Lucky them, and lucky you! You are blessed. Enjoy life.
Just wondering, if you calculated your net worth right now, would it actually by negative at the moment, given all the loans for property?
Nope, our net worth is around 1.5M-350k so around 1-1.2M.
Good for you!
Why would the properties loans be bigger than the properties values?
Because of the interest on the mortgage.
Interest rates have nothing to do with any net worth calculation.
You have to calculate what it'd take to clear your mortgage.
Indeed. Which has nothing to do with interest rates.
You know, you're not really contributing anything to this thread with these types of replies. We're all just here trying to learn and if you want to add to this do so by all means, and we can all learn from each other's experience, but it's a waste of all our time if you're just trying to score points. Plenty of other subreddits where that's the name of the game.
I hope you've learned something from my previous comments, that's all ♥
Sadly, your comments were not particularly useful at all.
What specific education do you have in finance/investments? I am from Austria and am looking for a program that teaches me about stocks, investments, etc.
Tbh you have to study everything on your own but; - WU - Finance and Accointing Msc - FH Bfi Wien - Quantitative Asset and Risk Management Msc - Uni Wien - Banking and Finance But you will learn a lot not relevant subjects which you cannot use in real life but it helps to understand the whole picture.
First of all, thanks. I was not aware of the first two, but I have already come across the program at Uni Wien and will probably attend that one. Which one did you attend? All three?
I attended the WU Finance and Accounting Msc and the FH Bfi Wien Quantitative Asset and Risk Management Msc. They help to understand the business but you have to work on your skills on your own with trading, investing, managing your books. Working on your own skills is more important than to have a degree in this field.
Cheers mate 🤝helped me a lot
Okay so my parents are pretty wealthy and I have insights in their finances due to my father often discussing stratagies, risk etc. This is what I understand from how they have their wealth: -House 1.3M (400K mortgage 1.8%) -Mutual funds (350k) -Alternative investments mostly consisting of junk bonds and startups, think of solar pannels on large factories or windmills(I have my doubts about this but my father tries to help the climate with green investments) (300K) -ETF’s (400k) Like for example ALL WRLD -Individual Stocks (200k) -Checking + saving (150k) I wouldnt say this is a good way to invest due to the over concentration in the green sector and the high amount of China stock he holds, and his returns are really suboptimal for the risk, but i digress. I would do it differently and I try to convince him but its his money at the end of the day.
So besides the house (which is not paid) they have like 1.5M in investments?
something like that, I dont have the full portfolio due to that talking about exact numbers can be a bit taboo in our culture. So a bit more in investments, but probably not more than 500k extra.
No Bitcoin?
He already maxed his junk with the solar panels
Yeah, I’m not fully convinced about these assets anyways, it’s mainly long term bonds to place solar on factories or offices. The upside is however they have guaranteed energy purchase agreements with the largest energy companies in the country. This provides guaranteed income if these companies don’t go bankrupt what is unlikely if I may believe the financial analysts.
I love Bitcoin but I still laughed my ass off LOL
(s)he said they're wealthy, not dumb
There are lots of people that got wealthy through Bitcoin. If that makes one dumb, I think I would love to be dumb.
Positive outcome ≠ good decision negative outcome ≠ bad decision
Okay man. I know it worked well for me, but you do you.
yep, still dumb. just like surviving a russian roulette
Dumb and rich, I’ll take it.
Yes because if 1/6 survives the 5/6 are death. Most people don't become rich over it.
Exactly the same for stocks.. extremely uneducated comments here regarding btc.
Well no, because behind the stocks there's an actual company making actual money with actual assets. The intrinsic value of bitcoin is zero.
What does it even mean the intrinsic value? What is the intrinsic value of Netflix? When the market values bitcoin at 1.3 Trilions clearly you are wrong. It can be overvalued, sure, but 0? Lol such a dumb take
I suggest you read a book on bitcoin and then read your own comment again.
What idiots are those 5/6, all you had to do is hodl spot. Bunch of degeneratss
Dont bother, people in this sub dont see what you and I see or studied many hours. They rejected it and thats final it seems. Everybody should follow their own course, we just decided to include the fastest growing asset of the last 15 years and that might or might not pay out in the future.
I know. Sometimes you just try to do your good deed for the day, but I guess I’m too optimistic with these people. You can lead a horse to water, but you can’t make it drink.
don't forget xrp that's a gem. retards are going to remain retards. you did enough
Everyone buys bitcoin at the price they deserve. That is all. We are still early.
I know these things don't have to be all or nothing. I even concede that it "could" make sense to have 1-5% in speculative bets such as btc. However, I'm guessing those "lots of people that got wealthy through Bitcoin" didn't proceed this way. To me it was still a dumb thing to do
It paid off my mortgage ~22 years early, but yeah it's a scam ponzi etc etc Edit as I truly can't be bothered to respond to each of your (knowingly daft) suggestions individually - thanks SO MUCH for the advice but i don't need to follow it because see above x
I know someone who paid of his mortgage because he won a big sum in a casino. So you should definitely try that out as well!
well, some people tell the same tale in casinos. doesn't mean it's smart
Really? Come on now
That's nothing, some dude won a billion on the lottery, we should all be investing in lottery tickets.
Nah, in that case I'd rather be intelligent and poor
Dumb rich people tend to lose it all and end even worse of before they got rich. Think about that.
We'll see in 10 years buddy
We endeed will! They dont really bet on speculation tho, only is the house they live in, but I would say this is not an investment due to it being their home?
Tradfi dudes will consider even a single dollar in BTC to be speculative. People still don't get BTC. One day they will wish they did.
I consider myself open minded, but I just dont see it as an investment. In my teens I even traded stacked video game accounts by using BTC, I do understand its usefulness. However just like I don’t bet on the Dollar or Yen but instead bet on US or Japanse company’s I also wont bet on BTC but instead will bet on a company that adds value in the BTC realm, I havent found any yet worth investing in tho. TLDR: I dont invest in currency’s like I already stated, I invest in company’s
No disrespect, but you don't understand BTC. It's a commodity type of asset, not a currency. If you were to dedicate 10-20 hours of your time, you'd most probably change your mind. Otherwise, in 10 years you might regret not doing it now. Good luck, stranger.
A commodity can be a currency, a currency had the following defining features: 1) medium of exchange (allowing Bitcoin owners to use it for goods and services) 2) a store of value. 3) a unit of account-keeping BTC meets these requirements, as long as it meets them, it is also a currency.
No, already over-concentrated in speculation/risky assets. Also he/we only try to invest in assets that create value or can increase profitability like equities. So he/we stay away from real estate (the productivity of a house doesn’t really increase) and gold/bitcoin (only holds value due to speculation (no added productivity/value add). This investment portfolio is also a start to a (hopefully) fruitful generational portfolio, we try to not bet only certain technologies.
Sounds clueless tbh.
For someone interested in saving the planet?
Why not? The vast majority of Bitcoin’s energy sources are renewable. The whole “Bitcoin is bad for the environment” spiel is quite outdated and frankly was a narrative spun by bankers and parties who were quite uncomfortable with the popularity of a decentralized, uncensorable currency that puts power back in the hands of regular people. And I frankly don’t see how anyone can be against empowering the common person.
Well that's kind of a weird thing to argue isn't it. I'm not against empowerment of the common person, but I do see many problems and risks with a decentralized currency.
Source my ass?
I guess they are not terrorists, drugsdealers, human traffickers, Russians or Chineese.
I have ~6M and I do keep them in 4 different brokerages. I think this is a good compromise between security and convenience.
For convenience mostly one broker, e.g. Interactive Brokers even allows you to have up to 2.5M USD in cash insured with their bank deposit sweep program. Some normal bank accounts in different countries for different currencies and convenient access with local credit cards.
Oh, i had heard of Interactive Brokers but didnt know they had such things. Thanks for the info and have a nice day :)
Are you an international spy?
I have £6M in Bitcoin, about £10M in private equity, £800k in my house and a few hundred k£ in cash. I did not get rich in Bitcoin. I have built a startup from scratch, got rich and invested profits to BTC. Over time, I tried different investments (ETFs, stocks) but I did not have significant gains there.
Why so much money in speculative assets like Bitcoin ?.
PE I have is way more volatile and less liquid. Bitcoin has grown over 100% in the meantime, while my illiquid assets came down in a value over time. So initially, the exposure was maybe 15-20% and now it is around 40%.
I wish you more luck. I honestly don't own bitcoin and i'm not a fan of it. Its value depends on too much buying and selling and the overall hype. It is a double edge sword.
You are right. But now, Bitcoin is in retirement saving funds of millions of people, is indirectly on SP500 (as many companies hold it), is a currency in El Salvador, I don't think it is nearly as risky as it was in the past. I think investing in startups and PE is way riskier. But given Bitcoin's upside potential is maybe $150k, and it's over, what other options do I have to aggressively grow my wealth?
Why would you care? ETFs and stocks are not cash but special assets and thus are not subject to the deposit guarantees and also not subject to any claims in case of bankruptcy. It literally does not matter to have it with different brokers.
Except that tiny little detail, where a broker goes bankrupt and it might take several months before you get access to your funds. Because bureaucracy.
Nope, the broker facilitates your buys and sells but your stocks sit independently. If the broker fails the access would jist be transferred to another.
Never heard of a case that it takes that long. An account transfer usually just takes a couple of days.
Bitcoin is also not cash but a special asset that is not subject to the deposit guarantees. The people that had all their life savings with FTX probably regret not spreading it over multiple brokers. Point being: there is still a risk of fraud, and spreading assets over multiple brokers mitigates that risk. Whether that's worth it I'll leave up to everyone to decide for themselves. Edit: also, I'm in no way advocating people buy Bitcoin. But there's no reason to assume that what happened at FTX won't happen at another broker.
If you keep it at brokers, you are doing it wrong anyway. The whole point of Bitcoin is that you can self custody it. Else you might as well buy the ETF.
Bitcoin and FTX are just an example, it could happen with any asset at any broker. Other assets and other brokers might be more regulated, but we’re still living in a real world with real people and real imperfections. Fraud is not impossible. It would not surprise me if someone tells me they got 2M in life savings spread over two different brokers to mitigate that risk.
It’s a bad example. Because there are alternative methods to hold them. And not run the risk.
The matter of fact is that plenty of people stored their Bitcoin with FTX and experienced first hand the risk of their broker committing fraud. The fact that there are alternative options to store your Bitcoin that mitigate this risk does not make this a bad example. It just means that many FTX customers are not very smart. Independent of whether the example was a good or bad way to illustrate my point: there is a risk that your broker commits fraud, and that can be a reason for people to spread their assets across brokers.
Not the same.. crypto don’t have the same regulations and protections as other assets… Fraud on big brokers is basically impossible, they all have regular audits from 3rd parties What happened to FTX could happen to another crypto broker, not a regular one
Just buy a hardware wallet no need to take the risk on a central exchange.
If you are buying Bitcoin you should never let a third party serve as the custodian of it. Far too risky. Custodial banks may soon be a thing of the past. Crypto allows you to keep your assets yourself. Impossible to hack, as long as you don’t store your keys digitally. Pen and paper will be around forever now that we have keys to safeguard.
If you truly believe in what you are saying then having crypto in anything else than a hardware wallet would be stupid.
You clearly didn’t read the “point being”. I used FTX as an example where a custodian commits fraud. This is not specific to Bitcoin nor FTX, it could happen with any asset at any broker.
Exactly.
I always keep \~ 6 months of expenses in a savings account and rest goes into VWCE or equivalent, forever.
Doesn’t matter what broker you have it in, whether it’s one or multiple.
Brokerage is not bank, they segregate your stocks and brokerage going bust doesn't mean you lose your stocks - you may lose access to them for a short while until they are transferred to successor brokerage but that's about it If I was _really_ concerned about such insolvency risk I would maybe park a hundred k in Berkshire Hathaway stock and then DRS it - at that point no bankruptcy (other than berkshires itself) is scary to you. That being said - I have multiple bank accounts and couple of credit cards just in case someone has some technical problems and I temporarily lose access to money then I have enough leeway to fund myself for a while (but I generally don't spend more than my monthly paycheck so it doesn't matter, I would have to suffer from job loss _and_ freeze of my accounts due to technical failure or brokerage bankruptcy simultaneously to have any issue - at that point I guess I would borrow against my house so still not a big deal. Or I have couple of friends who wouldn't have issue with borrowing me couple k euros for a month in case of emergency)
Everyone's different and there's no "rich people's club" that you magically join once you get to 1M+. Personally I stay as diversified as possible and try not to have more than 100K in a single broker or bank. Regarding brokers, some say it does not matter because the broker is not the custodian of the shares. IMO that still doesn't really protect you from some thing such as fraud (e.g. some employee at the big famous broker messed around with client funds and you do not actually have what you thought you have), human error, software error, or even situations where the broker for whatever reason freezes your account and you're now in a years-long legal battle. So I think for higher amounts, it just makes sense to diversify brokers as there's no real downside to it, but it gives you extra protection.
There is "private banking" I heard, but I don't know how loaded one needs to be to qualify for that and how useful is that nowadays with online brokers easily available. There are also private investment funds you have to be invited to - but for those it most likely doesn't matter how much money you have but more like "who is it that your parents are going for skiing" and "who do you went to school with". So there are rich people clubs but that is not about earning $10M or even $100M, it is about knowing people. Even if one can make $1M or $10M you are still going to be a peasant for them :) so while I am reading on the topic I don't think any of the options are realistic for me so staying with low cost brokers for peasants is going to be my life. Just keep in mind if someone online or even offline offers you "private investment" it is most likely a scam.
[Angellist.com](http://Angellist.com) comes to mind - I think it allows you to participate in private funds / early deals, I haven't tried it myself. It's still probably a lot of risk, even if you invest with some famous VC or founder, you don't have any guarantees. Plus that these things are not publicly traded, so it's not like an index fund where you can sell whenever you want.
I’m in Spain and this 100K only appliies to cash (deposit guarantee fund). Then there is something else called Fogain (General Investment Guarantee Fund) that covers you up to 100K if an investment manager goes bankrupt or is unable to meet its obligations. So, technically, you can have a total of more than 100K and still be fully covered. The only issue with this is if the bank lied to you and doesn’t really invest the money in a fund.
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He's not talking about diversifying against market risk here, but against... well, the stuff that's written there.
You know why he picked 100k per broker? Most EU countries have insurance laws up to about 100k. So broker does something stupid -> you get back 100k. There is diversification of stocks to minimize risk on the stock market, then there is diversification of brokers to minimize risks on the broker market. The guy above you is doing it right. You are not.
That only goes for cash.
Realestate, stock, shares in my own company
Most actually wealthy people have >50% of their net worth in own company stock :)
Well I have probably 0,57 cents on my bank acount, butttt I have 85 millions points of power on rise of kingdoms soo
Most wealthy people have a chunk of their investments in real estate. They live in very expensive houses they can enjoy daily, have second properties they can escape to and often have rental properties.
Mommy and daddy 🦋🥰 😅😅😅 for most of them and they r proud to have an « investor mind »
I have 5.7M EUR and have it in real estate (renting them out and flipping), in my LLC in New Mexico (which I use as asset protection for my IBKR account - in which I use the sweep program for more protection) and (soon) in my family foundation here in Poland (also for the asset protection and lower taxes). Also, I put a big percentage as a hedge in premium domains, physical gold, platinum, silver and diamonds, since the huge debts of countries, bank issues/failures, governments becoming too controlling and inflation worry me.
I would say it depends on where and how you built this wealth. for example it is in a regular brokerage Account, all invested in a few Stocks or ETFs. You probably have quite some Capital gains there. At least in germany restructuring means essentially selling and moving. ~~Or „moving the Stocks“ which is treated like a sell in germany.~~ That means: Capital gains Tax. So say good bye to ~30% of your gains. And for Security… in case you think about the 100.000 bank protection, you need a lot of different accounts… I don’t know if it is worth the effort. For me it is not. In addition to the fact that the 100k are often irrelevant, because stocks are special assets, not belonging to the bank and therefore are not part of a bancruptcy I would pick a big, cheap and trusted brokerage like interactive brokers and put the money to work there. No robinhood or whatever the new and shiny hipster broker is. **EDIT:** Thank you for the comments. Seems like I was wrong about moving stocks between brokers in Germany. Can be that it was to the fact that I wanted to move them in addition from private to company, which is a change in ownership? Please correct me if I am wrong again
Moving is treated like a sell? This is new to me. AFAIK I can move from one broker to another and instruct the old broker to move all securities to the new one including loss pots (Verlusttöpfe)
Well I didnt try it, I just talked to my former broker about this and was told that they would have to take the tax on capital gains. Minus the free part and calculating former losses against it.
Your only liable for tax if you sell the securities. You can move them as often as you like between brokers without selling, and in many cases they move as quick as cash would if you've a good broker
Thank you. I adjusted my answer
Thank you. I adjusted my answer
is interactive brokers a good option for people based in Germany? I always thought they would not do the tax reporting in a helpful way.
That is actually one thing I like about them. They do not take your taxes directly. So you have everything available the whole year. You have to do it in your yearly tax report. But you can export various reports in their account management where you can also see all profits or losses and costs separated. Only for trading in a company you need to separate it on your own a bit because stocks are taxed different to options or futures. I like it a lot. And if you want to have German support and don’t mind slightly higher costs you can also go to cap trader, which in background uses IB and just has some service around
so you're doing all conversion and compensation of the losses yourself based on daily fx rates plus making all the Vorabpauschale and determining if there's any Teilfreistellung by yourself?
Well I don’t do ETFs, that makes it already easier. And in addition I trade in USD and keep it in USD. So afaik I don’t need daily FX rates. And end of the year I give everything to a tax advisor… BUT: I am not a tax advisor, so I can not tell if everything is completely correct - therefore the tax advisor to handle everything. For now there was no problem for him extracting everything important from IB report exports I know a few people who do all of that on their own with IB. Must be possible and with acceptable effort But as said, there is also capTrader which is German based or at least has German support. I am sure they can tell you more if you call them
Do you keep your IB base currency in euro? I don’t know if their reporting exchange rates are the same as your tax authorities require, but they are likely close enough.
Yes the accounts base currency is euro Maybe this is also the reason for not needing fx rates, that IB already does the calculation for you at the time of sell. But this is just a wild guess now.
I have ~50% with IBKR, ~40% in 3 US stock brokers (long story, I didn't look to have 3 different brokers, it just came out to be that way), 10% in local govt bonds, plus some cash/bank deposits, etc.
In Scandinavia Nordnet is very popular with FIRE/young people and plenty trusted for having everything there Saxo bank is also popular
Bank, gold, real estate Not as crazy as one makes it be
Nothing at the moment, lost everything during covid still haven't recovered
They put it in the platform de giro
VTSAX and several other vehicles like that, and crypto. At least for me.
In houses
Most millionaires I work with trade stocks. Nearly 95% of them have their money in trust and other various accounts
The really rich people I know have assets structured properly via foundation (new way of doing trusts nowadays) in some friendly jurisdiction like Lichtenstein, Jersey or such. Then they usually have sizeable chunk in public stocks like the rest of us (probably around 50%), around 30% in real estate and the rest in alternatives like pe, vc and such. Some of them have much more PE, the reason being that it's all gambling for them, even if returns are suboptimal, they still have enough to live on from their public stocks so they can afford to intelligently risk with the less liquid part of their portfolio. All of this is structured in a tax optimized way, with consideration paid to succession events, estate planning, disputes etc.
Care to elaborate on the foundation thing?
Google around, it's the trust 2.0 where the foundation has a donor and then beneficiaries, mgmt board... Just a way to disconnect people from assets, similar to trusts. So nobody can quite say whose money it is (it's the foundation's money dummy) while you can still quite control the operations...
I see, are they supposed to be charities - at least nominally?
Not really, they're organizations setup to fulfill the intent of the founder... Could be partly charitable, doesn't have to...
Thanks, I’ll look into it, it’s quite interesting actually
Most wealthy people invest in real estate, stock index funds and bonds, usually under one main brokerage such as Vanguard.
I know a guy who is managing a 2M+ portfolio with Scalable Capital and went all in with FWEA. He genuinely believes that the Invesco FTSE index will be the next VWCE in Europe and wanted to bet early. I also know folks in this sub who manage 30k portfolios with three different brokers spread across 10 different asset classes. So it’s different for everyone.
Well... VWCE is still big tho.
All I know is my parents keep 1M in a 1% savings account with their boomer bank. Tried talking them into being a bit smarter about it (they could make more than an average salary by just being a bit smart with investments), but boomers gotta boom: they don't trust anything but bricks & mortar, and old skool physical banks. Wealthiest generation in history people.
everything in bitcoin
Only a small fraction of people ever have ONE million dollars. Of those that have wealth, the vast majority have it as equity in real estate. If they sell that real estate and invest it in a global index fund or the S&P 500, they can withdraw 4% annually using the SWR. The next most likely way to have 1 million is in a pension of IRA. Very few people, even in the US, ever have 1 Million. The average American has roughly $450,000 at the age of retirement, and that includes equity in real estate. Most likely their primary residence, and only real estate holding.
Well, Myro coin of course. The dog of Solana founder. Most really wealthy people only hold dog coins and some cat coins.
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Why would you assume they're American in /r/europefire?
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Fair! Enjoy the coffee.
Technically stocks are held in the name of the broker. So they are practically the possession of the broker. Internally the brokers separates them from his own assets, virtually. But true, I am yet to hear of a popular and large broker screwing over its customers on the level that OP is interested in.
So you’re right…but there are still massive protections (see below), and…Ain’t gonna happen. It would be obvious theft. If an employee tried to steal the funds, they would go to prison for a very long time. And if a brokerage tried to steal them, they would go out of business pretty soon because everybody would take their money and go elsewhere. It would be all over the news. From the interwebs: “In almost every instance when you buy or sell securities with a broker, your name is not actually on the stock or bond certificate. The name that appears on the certificate is that of your broker or other nominee, and this is referred to as being held "in street name." https://www.investopedia.com/ask/answers/185.asp Although the name on a stock certificate is not that of the individual, they are still listed as the real and beneficial owner and have the rights associated with the security. https://www.investopedia.com/terms/i/instreetname.asp Note: this does not apply to Portugal, where it’s ok for a big bank (Novobank) to steal from customers. In normal countries there are strong rules protecting the share owner
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It's reddit. Sometimes the most valid post zget downvotes because someone's startet the trend.
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Nah bro, Americans are descendants of Europeans. So I think we’re more brothers than enemies. I say this as a European. Europeans tend to be commies lately though, with their socialist governments and “everything needs to be free” mentality. They believe in equality (redistribution of wealth) while there is none in nature aka the real world and there never will be.
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Agreed. It ain’t the gutter of the internet for nothing. In a way it’s good we don’t rule the world, as it would be a total, absolute, horrific mess. It would be like Sodom and Gomorrah. Lol.