LEARNING HOW TO BE RICH AS AMERICAN

American households with an average total net worth of about USD 90 million often invest smartly by putting money in many areas, few businesses and trying to keep the investment tax rate to a minimum.
Three economists including Luis Viceira of Harvard Business School, Enrichetta Ravina of Columbia Business School, and Ingo Walter from Stern Business School, analyzed the holdings and transactions of over 260 super-rich families from 2000 to 2019. This data is an anonymous private company involved in managing the accounts of these families.
What are the advantages of these rich investors?
First of all, they make good use of common comparative advantages or particular strengths. They can access privileged investments and hold large sums of money for a long time. These super-rich investors often put 20% of their wealth in hedge funds and other forms of private equity or provide both capital and management advice to the fledgling company and then waiting for potential profits.
“Next, these rich people often don’t change their portfolios too much,” said Ravina, who led the research. They rarely trade even though they have more “power” to dominate the market than ordinary investors. Research shows that the reason for this is that the rich often hire an average of 6 investment advisors. They always have someone to blame for the losses and rarely admit their mistakes.
However, these rich people have no mature decisions
In early 2001, they spent only 0.01% of their total assets investing in a rather sophisticated financial instrument called mortgage securities. “This type of mortgage securities is quite promising at the time and they are always chasing profit,” Ms. Ravina said. By early 2007, the rate of investment in this stock increased to 2.3%.
Investing in a general trend is easy to increase risks. The Barclays CMBS 7 index used to evaluate the mortgage market segment has decreased by 36% in 2008. The total value of this rich household’s portfolio decreased from $ 8 billion in mid-2008 to Only 3 billion USD in March 2009.

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