Remember when your parents told you to “just put your money in the stock market”? Well, turns out the kids with serious cash aren’t listening. And honestly? They might be the smart ones here.
According to a Bank of America survey that probably cost more than my car, wealthy Americans aged 21-43 (aka millennials and Gen Z with at least $3 million in assets) are only putting 25% of their portfolios into stocks. Meanwhile, their older counterparts are going all-in at 55%. It’s like watching your cool younger sibling refuse to wear the same outfit as your parents.
But here’s the kicker: 93% of these young millionaires plan to put even MORE money into alternative investments. So what’s catching their fancy instead of boring old stocks?
Gold: Not Just for Pirates Anymore
Turns out 45% of wealthy young folks own physical gold, and another 45% want in on the action. Gold has been the ultimate “I don’t trust anything” investment for centuries, and with inflation doing its thing and the world feeling a bit… chaotic… it’s having a moment. The shiny stuff recently hit around $3,300 per ounce, which is either really exciting or really terrifying depending on when you bought in.
Real Estate: Because Everyone Needs a Place to Live
Real estate remains the cool kid at the investment party. About 31% of younger wealthy investors see it as their best growth opportunity. Makes sense – people always need somewhere to live, and unlike stocks, you can actually touch a building (though please don’t lick it).
The top 1% already holds over $6 trillion in real estate assets, which is approximately all the money in the world, give or take a few trillion.
Art: When Your Investment Looks Pretty on the Wall
Here’s where it gets fun: 72% of young investors think traditional stocks and bonds are basically dead for above-average returns. Enter art investing, where you can own a piece of a Picasso without needing to rob a museum.
Contemporary art has actually outperformed the S&P 500 from 1995 to 2023 (11.5% vs 9.6% annually). Platforms like Masterworks now let regular humans buy fractional shares of blue-chip paintings. It’s like a timeshare, but classier and with less aggressive sales pitches.
Crypto: The Wild West of Money
Young wealthy Americans are putting 15% of their portfolios into cryptocurrency, compared to just 2% for older investors. With crypto’s total market cap hitting $3.72 trillion and Trump promising a “strategic national Bitcoin stockpile,” it’s gone from “internet funny money” to “maybe we should pay attention.”
The Bottom Line
While your financial advisor might have a heart attack reading this, these young millionaires might be onto something. They’re diversifying beyond traditional markets, hedging against inflation, and frankly, having more fun with their money.
The stock market isn’t going anywhere, but maybe it’s time to think beyond the S&P 500. After all, if you’re going to lose money, you might as well do it with style.