# Where do rich people keep huge amounts of money? **URL:** \ **Category:** Factual Questions\ **Created:** [July 17, 2011, 11:35am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344 "2011-07-17T11:35:48Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![isaiahrobinson](https://avatars.discourse-cdn.com/v4/letter/i/85e7bf/32.png) [@isaiahrobinson](https://boards.straightdope.com/u/isaiahrobinson)\ **Post date:** [July 17, 2011, 11:35am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/1 "2011-07-17T11:35:48Z")
There was a story recently about someone finding a withdrawal receipt near an ATM in East Hampton which had a balance listed at just under $100,000,000. It was rumored to belong to a hedge fund manager called David Tepper but when asked by the New York Post he said, “I would never do something so irresponsible as to keep $100m in a savings account”. I know there’s probably an infinite number of things you could invest $100m in, but I’m just wondering what the most basic, run-of-the-mill one is. If you won $100m on the lottery and you asked a specialist accountant for a list of options as to what to do with it in the short-term, what would the simple Option 1 be? He’d say, “well, it might not generate the best returns, but the most basic option is to keep it in…”, what? Treasuries? Swiss bank account? Something else? Or is a complicated, balanced portfolio of investments the only sensible way to store that much money? ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [July 17, 2011, 12:01pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/2 "2011-07-17T12:01:08Z")
Mutual funds. ---
**Author:** ![doubled](https://avatars.discourse-cdn.com/v4/letter/d/51bf81/32.png) [@doubled](https://boards.straightdope.com/u/doubled)\ **Post date:** [July 17, 2011, 3:14pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/3 "2011-07-17T15:14:37Z")
Most rich people don’t actually have that much cash. Even super billionaires. Usually, they’re a ceo and have a billion dollars worth of stock in the company, and for all intents that’s as good as cash, since they can sell some of the stock (or take a loan against it) if they need to buy a house or whatever. But most billionaires don’t actually have a billion dollars cash sitting around. If you’re diversifying outside of your company, you hire an asset manager (hedge fund, private equity, etc). They will usually invest your money in something semi-exotic that normal people can’t invest in alone. Ie, investing in startup companies, or maybe a hedge fund will put it in derivatives. You will definitely NOT keep 100 million in your bank for long. Partly cause it’s not earning much interest, but mostly cause the government guarantees bank deposits up to 250,000 but not above. So if the bank went out of business, sucks to be you. (There are special types of bank accounts that get around this problem but they don’t have ATMs) That ATM deposit slip people found was probably temporary-- the guy was buying a new house or something so he sold some stock and had the money wired to his account so he could write a check. Odds are, that money will be spent within a week. ---
**Author:** ![DJ\_Motorbike](https://avatars.discourse-cdn.com/v4/letter/d/90ced4/32.png) [@DJ\_Motorbike](https://boards.straightdope.com/u/DJ_Motorbike)\ **Post date:** [July 17, 2011, 4:23pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/4 "2011-07-17T16:23:02Z")
They invest it. Create jobs. ---
**Author:** ![AWB](https://avatars.discourse-cdn.com/v4/letter/a/bb73d2/32.png) [@AWB](https://boards.straightdope.com/u/AWB)\ **Post date:** [July 17, 2011, 5:18pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/5 "2011-07-17T17:18:19Z")
> [@isaiahrobinson](#): > > Treasuries? > > Swiss bank account? > > Something else? > > Or is a complicated, balanced portfolio of investments the only sensible way to store that much money? Money bin, a al Scrooge McDuck? 😛 ---
**Author:** ![Spoke](https://avatars.discourse-cdn.com/v4/letter/s/a88e57/32.png) [@Spoke](https://boards.straightdope.com/u/Spoke)\ **Post date:** [July 17, 2011, 5:23pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/6 "2011-07-17T17:23:46Z")
> [@DJ\_Motorbike](#): > > They invest it. Create jobs. If I put my $100 million in a mutual fund (presumably purchasing already-issued shares of stock in companies that are up and running), how, exactly, does that create jobs? What if I use it to buy undeveloped real estate as a long-term investment? Or buy T bills? (Just testing your assumptions.) ---
**Author:** ![arseNal](https://avatars.discourse-cdn.com/v4/letter/a/ecae2f/32.png) [@arseNal](https://boards.straightdope.com/u/arseNal)\ **Post date:** [July 17, 2011, 5:27pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/7 "2011-07-17T17:27:41Z")
Apparently some people keep it in a Capital One checking account. [http://www.businessinsider.com/someone-in-the-hamptons-is-keeping-100-million-in-a-capital-one-checking-account-2011-6](http://www.businessinsider.com/someone-in-the-hamptons-is-keeping-100-million-in-a-capital-one-checking-account-2011-6) ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [July 17, 2011, 5:29pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/8 "2011-07-17T17:29:34Z")
Yes, that story was mentioned in the OP. ---
**Author:** ![GreasyJack](https://avatars.discourse-cdn.com/v4/letter/g/df705f/32.png) [@GreasyJack](https://boards.straightdope.com/u/GreasyJack)\ **Post date:** [July 17, 2011, 5:40pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/9 "2011-07-17T17:40:09Z")
> [@arseNal](#): > > Apparently some people keep it in a Capital One checking account. > > [http://www.businessinsider.com/someone-in-the-hamptons-is-keeping-100-million-in-a-capital-one-checking-account-2011-6](http://www.businessinsider.com/someone-in-the-hamptons-is-keeping-100-million-in-a-capital-one-checking-account-2011-6) It’s probably not a Capitol One account, considering that the ATM charged him a fee. Perhaps it could be some sort of banking instrument that’s more exotic than a run-of-the-mill savings account, but which still has ATM access? ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [July 17, 2011, 5:40pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/10 "2011-07-17T17:40:50Z")
It would be nice if it were true that the hugely rich invest gobs of money to create jobs, but there is no actual evidence for this. Unless your definition of “invest” is so elastic to be meaningless. There’s no real default answer to the OP’s question. Any economic adviser will give anyone with money of any size to put away the same answer. Diversify. Put some money into stocks, either directly or through mutual funds; some into bonds; some into commodities; some into real estate; and keep a small amount in cash for fun and impulse. All these run on different cycles, i.e. when some are rising others are falling. This keeps you from having huge losses when a cycle bottoms. Only those whose greed blinded them to this basic truth lost all their money by giving it to a Bernie Madoff. What never happens, except in the very indirect way above, is that they use it to create jobs. A small number do provide money to start-up companies, true. However that’s one of the riskiest ways of investing. Most start-ups fail, in which case all the money is lost. Venture capital is no more than a sophisticated form of Las Vegas. You do it only with money you feel completely free to lose or you’re an idiot. That’s why most start-ups find it so hard to get any money at all. And there is no real reason to do anything similar with your $100,000,000. Businesses today are sitting on an estimated $2,000,000,000,000 (yes, trillion) in “cash” (i.e. money put into some form of the above to make a return) that they are not turning into jobs. They don’t see a sizable return for investment in job creation. If the collected businesses of America don’t, then no individual will. ---
**Author:** ![Fubaya](https://avatars.discourse-cdn.com/v4/letter/f/c2a13f/32.png) [@Fubaya](https://boards.straightdope.com/u/Fubaya)\ **Post date:** [July 17, 2011, 6:46pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/11 "2011-07-17T18:46:28Z")
The available balance and balance are the same. The sucker doesn’t even have overdraft protection! ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [July 17, 2011, 6:51pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/12 "2011-07-17T18:51:10Z")
> [@GreasyJack](#): > > It’s probably not a Capitol One account, considering that the ATM charged him a fee. Perhaps it could be some sort of banking instrument that’s more exotic than a run-of-the-mill savings account, but which still has ATM access? Right. The account is at another bank, so Capitol One charged him a fee as a non-account holder. ---
**Author:** ![yabob](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yabob/32/2821_2.png) [@yabob](https://boards.straightdope.com/u/yabob)\ **Post date:** [July 17, 2011, 7:44pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/13 "2011-07-17T19:44:22Z")
Some brokerage accounts allow checkwriting / ATM withdrawal privileges. It makes sense for somebody to have a substantial quantity being carried as cash in a brokerage account for a short interval while they are moving it between investments, or if they active traders who have pulled out of the market and are sitting on the sidelines for a while. But $100 million is more than “substantial”. ---
**Author:** ![aruvqan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aruvqan/32/2891_2.png) [@aruvqan](https://boards.straightdope.com/u/aruvqan)\ **Post date:** [July 17, 2011, 10:44pm UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/14 "2011-07-17T22:44:40Z")
Back a few years ago you used to be able to buy bogus atm slips to keep in your wallet so if you wanted to give a girl your number you pull out a ‘random’ piece of paper from your wallet and scribble your number on it … [http://www.prankplace.com/product.aspx?d=Tricky-Fakes.Fake-ATM-Recepts&p=13777&c=50](http://www.prankplace.com/product.aspx?d=Tricky-Fakes.Fake-ATM-Recepts&p=13777&c=50) still can apparently. ---
**Author:** ![arseNal](https://avatars.discourse-cdn.com/v4/letter/a/ecae2f/32.png) [@arseNal](https://boards.straightdope.com/u/arseNal)\ **Post date:** [July 18, 2011, 12:02am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/15 "2011-07-18T00:02:40Z")
> [@Dewey\_Finn](#): > > Yes, that story was mentioned in the OP. :smack: I read all the replies and did a text search for capital but I guess I failed to read the OP fully. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [July 18, 2011, 12:15am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/16 "2011-07-18T00:15:06Z")
Under the mattress? ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [July 18, 2011, 12:41am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/17 "2011-07-18T00:41:00Z")
> [@DJ\_Motorbike](#): > > They invest it. Create jobs. Or they invest in a company and cut its expenses by laying off half the employees. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [July 18, 2011, 12:47am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/18 "2011-07-18T00:47:54Z")
In your 401K account. ---
**Author:** ![NAF1138](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/naf1138/32/3245_2.png) [@NAF1138](https://boards.straightdope.com/u/NAF1138)\ **Post date:** [July 18, 2011, 1:51am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/19 "2011-07-18T01:51:49Z")
I can’t answer for all people, but until relatively recently I worked in business management which is sort of like full service accounting for the super wealthy. My firm specialized in the entertainment industry, so we didn’t have the super super wealthy, but it wasn’t chump change I think our richest client had a net worth of somewhere around 80 million. I can tell you what we advised our clients to do. First we always tried to keep a percentage liquid. What percentage depended on the client, but it was enough to cover their regular monthly expenses plus another 10 thousand or so as a buffer. This was all kept in interest earning checking accounts, or high yield money market accounts. The money was shuffled around daily to make sure it was where it was needed. Second our clients were all heavily invested in Mutual funds, IRA’s, T-Bills, and other securities. What they were specifically invested in would change depending on what our brokers and investment advisers recommended at any given time. But diversity was key. Never more than a couple of million in any particular investment and it was all staggered so that not everything would mature at the same time, but something was always maturing every few months. Third, and this wasn’t us it was just where another large chunk of money went, property. Most of our clients owned multiple homes, or were investors in malls or office buildings, owned apartment complexes that sort of thing. Add in jewelry, cars, art, other toys and that’s where all the money usually was. Like I said, diversity was key as was making sure to get the largest yield with the lowest risk. ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [July 18, 2011, 2:12am UTC](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344/20 "2011-07-18T02:12:16Z")
> [@doubled](#): > > You will definitely NOT keep 100 million in your bank for long. Partly cause it’s not earning much interest, but mostly cause the government guarantees bank deposits up to 250,000 but not above. So if the bank went out of business, sucks to be you. I’m not sure this answer makes sense. You are saying the biggest reason to avoid banks is because of the risk of them failing but are banks a worse risk than most other investments that you might use instead? I doubt this is correct. I think the main reason is just that banks have a low rate of return. [Next page](https://boards.straightdope.com/t/where-do-rich-people-keep-huge-amounts-of-money/589344.md?page=2)