Where are the rich investing?

When it comes to investing smart, nobody can beat the affluent. Investing smart can get you on that road to financial fabulousness too and here’s how you can get started.

In the words of Warren Buffett, the No. 1 investing rule is not to lose money. So while we look at it as having some sort of 'secret strategy', in reality it's just about making sure that your investments make money for you. Instead of knowing what to do, it helps to know what not to do!

When we think of an investment strategy, we think about putting in money into stocks, and bonds. Whether it is due to the liquidity or the nominal starting amount, this seems pretty doable. But investing just in intangible assets don't mean that these types of investments are always the best.

Instead, the affluent understand the value of physical assets, and they allocate their money accordingly. Think about it, the wealthy always have real estate, gold, land and artwork that they invest in. Real estate continues to be a popular asset class in their portfolios and that's no accident. It's done to balance out the volatility of stocks.

What's more, you also won't be tempted to liquidate these assets in a jiffy. So no impulse decisions will alter your portfolio.

Ever heard of rebalancing your portfolio? It's not very commonly used. But it is an important thing to do. Through consistent rebalancing, you can ensure that your portfolio remains adequately diversified and proportionally allocated.

Once in a while, rebalancing also helps you identify goals that are obsolete and enables you to re-allocate to ones that are relevant. A balanced portfolio typically includes the right mix of cash, stocks, and bonds based on your age and risk tolerance.

Omitting a savings strategy from your financial plan can be one of the biggest blunders one can commit. What's more important that earning loads? Investing wisely and saving wisely.

Focus on increasing their cash inflows as well as reducing your cash outflows, thus increasing overall wealth.

Trends come and go. If you do want to catch the trend train, then allocate a fixed percentage for these early investments. One such example is the crypto wave. While Bitcoin was one that made a whole lotta people rich, notice that the people who did put in their money, didn't put in all their money. They proportioned their investments and there was a certain percentage that went into these super risky ones.

It's good to have upto 10% of your portfolio for this investment class.

• Build inflation-resistant portfolios

When it comes to long term, sustainable investing, you need to be able to build wealth in a form that is inflation-beating.
-Real estate, like apartment buildings
-Public equities, or stock, in platform companies with pricing power (Example: Amazon, Apple and Airbnb)
-Cryptocurrencies
But obviously you cannot just jump into buying a home out of nowhere. So put aside enough to cover a 20% downpayment and then take a loan for the rest. Look for properties that can give you a decent rental income that can pay off your monthly instalments.

• The crypto ticket

Bitcoin is known as “digital gold” for a reason. It theoretically protects against inflation because of the limited supply, and can be your hedge for the long term.
While there are so many cryptos to choose from, building wealth means that you look for something that will stand the test of time. Do your research and understand the purpose behind the launch of each coin before putting your money behind them.

• Consider alternative energy investments.

Electric vehicle stocks seem to be growing in demand as the gas prices grow. Of course, stocks such as that of companies like Tesla don’t come cheap, but could be potentially beneficial in the long run.