When it comes to amassing vast wealth, the general perception is that billionaires are just lucky. But the reality is different. Billionaires invest very wisely to grow their wealth. Their strategies are so effective that not only do they increase their wealth, but they also do not have to pay much tax. Let’s know what methods billionaires adopt to amass enormous wealth and also save taxes.
Where and how do billionaires invest?
If you are thinking that billionaires only buy shares or invest in big companies, then this is not the whole story. Their investments are diversified, which helps them reduce risk and ensure long-term growth.
Strategic investment in the stock market
For billionaires, the stock market investment goes through a well-thought-out strategy. Titans like the late Rakesh Jhunjhunwala and Radhakishan Damani created immense wealth by making long-term investments in the right companies. Billionaires often invest in companies that have a strong business model and can grow tremendously in the coming years.
Startups and private equity
Nowadays, a big focus of billionaires is also on startups. They invest in startups, because there are more possibilities of growth there. In India too, many high-net-worth individuals are investing in new businesses, through which they not only earn good returns but also take advantage of tax benefits.
Also read: Best short-term investment options for higher returns
Real estate: Growing wealth by linking it to land
Real estate investment has always been the first choice of the rich. It not only gives rental income, but its value also increases manifold over the years. Mukesh Ambani has luxury properties all over the world. Giants like Warren Buffett invest a lot in commercial real estate.
Gold, art, cryptocurrencies, and hedge funds
Alternative assets like gold, artworks, digital assets and hedge funds are also part of the investment portfolio of billionaires. These assets come in handy when the market is down, as their value often remains stable or rising.
How do billionaires save taxes?
Now the question is, when billionaires earn so much, do they pay huge taxes? The answer is – No! Billionaires reduce their tax liability through legal means and adopt smart investment planning.
Offshore investments
Many rich people invest in countries where the tax rate is low. This is called offshore investment.
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