Where do millionaires and billionaires invest

This is how millionaires invest their money

The German Institute for Economic Research (DIW) has presented an extensive study on the characteristics of the super-rich in Germany.

The result: millionaires are more often than the average men who are older, better educated and more satisfied. First, "Die Zeit" reported about it.

The study also provides interesting information about how millionaires invest their money. Their strategy is fundamentally different from the rest of the population.

A large-scale wealth study by the German Institute for Economic Research (DIW) provides new insights into the distribution of wealth in Germany. As part of a three-year research, the researchers interviewed 1,956 households, including 881 millionaires.

One of the most important findings of the study: Inequality in Germany is greater than previously assumed. The richest percent of the population therefore collects around 35 percent of the wealth, previously it was assumed that it was just under 22 percent. First the weekly newspaper “Die Zeit” reported on the data.

Old, male, West German

But the study also contains some interesting numbers and facts about the characteristics of millionaires that were previously little known. Here are the key takeaways:

  • Wealth in Germany is predominant old and manly. Only 31 percent of millionaires are women. Eight out of ten are over 50 years old.
  • The majority of millionaires live in West Germany. Only six percent come from the new federal states.
  • Millionaires work significantly more than the common man. They work an average of 47 hours a week - around ten hours more than those in the three lower wealth segments.
  • The majority of millionaires have a job. 73 percent work as self-employed, most of them run a company with more than ten employees
  • You earn with more than 7,600 euros net more than three times as much per month as the average.

Differences in investment

The authors of the study also point out that millionaires invest their wealth differently than the rest of the population. They put the largest part in company shares: The business assets make up around 40 percent of their gross assets (around 1.26 million euros). Other real estate (around 792,000 euros) and owner-occupied residential property (around 575,000 euros) also dominate.

The researchers interpret this as evidence that the super-rich primarily choose forms of investment that focus on generating income, such as income from renting and leasing. Financial assets, on the other hand, play a subordinate role.

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The scientists also analyzed the life satisfaction of the super-rich. Millionaires are therefore happier than average. On a scale from 0 to 10, their average life satisfaction is 8.2 percent. For comparison: In the lower half of the wealth distribution it is 7.1 points, in the upper middle class it is 7.4.