Expert Reveals How the UK’s Top 1% Really Invest Their Money (Spoiler: It’s Not All Property)

The top 10% of UK households hold £1.2 million or more in net wealth, and you need to crack £3.1 million in total wealth to become a member of the top 1%. But how do they go about accumulating this, and what are they doing differently from the average person?

With this in mind, the experts at Financial Interest have put together a guide on the top five ways the rich invest their money and what we can take away from their decisions.

The Top Five Ways The Rich Invest Their Money:

Property – First up is property. You might assume the rich get richer by snapping up property. And yes, wealthy households are more likely to own multiple properties such as buy-to-lets to London flats and country houses. However, as a share of their total wealth, property actually shrinks the richer they get. For households worth around £250,000, property typically makes up half of their net wealth. But for those with £5 million or more, it drops below 20%. That’s not because they own less, but because business assets and financial investments grow much faster.

Cars and Contents – Physical goods like cars or home contents, which make up a large share of net worth for poorer families, barely register in a millionaire’s balance sheet. After all, a £20,000 car is a big deal if that’s half your savings. But for someone with £5 million, it’s background noise.

Luxury Items – Whisky has become the luxury asset of choice for the wealthy. With one survey finding that 27% of high-net-worth individuals plan to invest in it within three years, more than art (26%), jewellery (20%), wine (15%), or classic cars (14%). It doesn’t take much digging to find out why. The Knight Frank Luxury Investment Index, which tracks ten high-end assets, shows whisky up 280% over the past decade. The only item to beat the S&P 500’s 208% return. The rest lagged behind: wine rose 146%, watches 138%, art 105%, and so on. There’s no definitive UK stat on how many wealthy people invest in these assets, but when a classic car or six-figure painting is the minimum entry point, it’s safe to conclude the participation skews rich.

Cryptocurrency – Crypto might be commonly associated with get-rich-quick schemes and scams these days, but one survey suggests the wealthy are over three times more likely to own it. After all, rich investors can afford to ride the crypto rollercoaster. Saltus, a UK wealth manager, surveyed individuals with more than £250,000 in investable assets and found that 40% currently hold crypto, with another 46% planning to invest. Compare that to the general population: the Financial Conduct Authority (FCA) reports only 12% of UK adults own crypto, a figure that’s risen slightly from 10% in previous years.

Private Businesses and Venture Capital – One of the clearest dividing lines between the wealthy and everyone else is business ownership. Most Brits don’t hold any business equity, beyond the odd bit of crowdfunding or a small family enterprise. But among the UK’s richest households, business is a major asset class. In fact, households with over £2 million per adult hold around 13% of their total wealth in business assets. For those with over £5 million, that figure jumps to over 40%.

Damien Jordan, founder of Financial Interest and Damien Talks Money, comments on how the rich invest money and what we can take away from their tactics:

“Most people believe that you need millions in the bank to invest the way the rich do, but the real advantage is your mindset and attitude to investing.

Of course, there’s no disputing that the system is easier on those who have more money to start with, but that doesn’t mean you can’t adopt a wealthy mindset and play by their rules. The rich turn their attention to ownership rather than savings. What I mean by this is that instead of letting their money sit in a bank account and accumulate the standard bonus on top, hoping for the best, they buy and invest in assets that grow over time like businesses, shares and property.

You don’t need to start off with a fortune to make smarter decisions, you just need to adopt your mindset so that you think like an investor, rather than a saver. Wealth is built with a solid strategy, not just with money.”