Where do Rich People Store Their Money to Keep it Safe (Not What You Think)

Where do rich people keep their money? What are the safest options for money storage out there? Which countries are best for keeping large amounts of cash? Which banks are best?

Countries that come to mind are Cayman Islands, Switzerland, Singapore, UAE, UK, USA, etc. Swiss banking is among the most famous when it comes to wealth preservation and storage. London and Dubai are among the most famous cities for banking, and many are keen on keeping their wealth there.

But what about banks? There is a list of the safest banks in the world. Some of them are very well known and reputable institutions.

But when it comes to real wealth, let's say billionaire wealth, most of that wealth will not be stored in banks, but in assets. No matter how reputable a bank is if it goes under you will lose most of your money, and only get back an insurance deposit backed by the government. This is usually a quite low amount, which is negligable.

This is why it's a better idea to keep your funds to store money in a brokerage account than in a regular bank account. In this case your money will be quite safe, no matter what happens with the institution.
On top of this lots of wealthy people will buy real estate assets.

Who are we and what do we do?

We are Offshore Citizen team. We help people become global: get a second passport, set up a second residency, pay less taxes, do banking abroad, etc.

We have lots of interesting articles on different topics, we have relevant information up to date.

Author: Michael Rosmer

[jasonboltz]

Not only is your information spot on and highly valuable you are interesting to listen to. Great stuff! Thank you!!

[FreedomPlaya]

The Canadian government also froze citizens' bank accounts for people who donated to the truckers' convoy! They really crossed the line with that.

[arnoldvosloo]

Beyond the segregation of assets, brokerages also have higher deposit insurance than banks do. E.g., IBKR LLC claims they have $500k of SIPC coverage plus an additional $30M of coverage per account through Lloyds. Much more than the $250k FDIC coverage in US bank accounts.

[swb]

Perfect explanation. Really wanted to know this based on SVB collapse

[adamsediki]

Would love to see a video on best places to setup brokerage account. (for active traders, possibly LLC?) Is it possible to do this while living in a higher tax country?

love your videos

[larsschouw]

The excellent video explains how to protect yourself against bank failures. Now it turns out to be very timely!

[millenialmusings]

How could FTX swindle money if it was a broker?

[ByronWatts]

So many assumptions that everything is and will remain hunky dory as long as status quo remains, whilst forgetting that the whole system is broken

[halfbee]

This is the best video explaining one of my biggest questions in finance. Thank you!

[jakehart]

I thought you were going to say life insurance or becoming their own bank

[michaelthomas]

So, would it also be safer to store cash in a brokerage account rather than a bank?

[patienceisalpha]

Thanks Michael. Yes people think they should open many FDIC insured cash accounts. But the simplest way to hold a large cash position is through short term treasuries.

With regards to where and how, the US is climbing up the ladder, given their non reciprocation in CRS. Decent wealth amount in Wyoming trusts now. Coupled with IBKR accounts.

Enough name dropping.

[yuraplus]

Great video. That's exactly how things are. THANK YOU!

[alexzolotov]

Thanks for this video. That’s really interesting subject, about risks in different ways of storing money.

Really interesting to hear your experience and experience of your clients about it.

[Doug]

You forgot the one other safe location, on a blockchain. Granted picking the rick crypto or stablecoin is important. But even the government will have trouble taking it if self custody is used and they can get at your wallet or recovery seed.

[jeremyleonbarlow]

US treasuries are one of the safest cash equivalent asset that a lot of wealthy people around the world store their wealth in. I mean it's like the FDIC account with a better interest rate and a better tax scheme for Americans excluding municipal bonds with less risk than munis.

You are correct though if the US Treasury ever defaulted storing you money in just about any other asset will be pretty worthless too.

[libertarianspirit]

Interesting to hear this. I figured out this thing for myself years ago. But my motivation was different. I wasn't as concerned about insolvency of bank as I concerned that banks are more regulated, and thus can be more aggressive in their derisking policies than brokers. Since I'm russian citizen, I thought broker is less likely to close my account (because there is less regulatory pressure on them).

[chrisseeley]

Interesting and helpful information - thank you

[pooh]

when you say bonds, does that include GICs?

[de_anubis]

You don't store money - you let it work.