The lifestyle of the 1% is often looked at through a filter of secrecy and awe. Sprawling estates complete with private security and gated entryways are just one of the things that separate their way of living from the other 99%. There are countless television programs and magazines that capitalize on our need to see behind the curtain and give us a glimpse of what it's like to live at that level of wealth. From cars to real estate to trust funds, the wealthy 1% do things a little differently from everyone else.

It's no different when it comes to investments and financial matters as well. High-net-worth individuals (HNWIs) have access to investments and wealth management platforms that the 99% don't. These products and services are designed to maximize returns, protect assets and minimize tax liabilities on capital gains.

For the majority of people, there are other opportunities to take advantage of. From mutual funds to qualified retirement plans, the 99% can still participate in financial markets and achieve their investment goals. The following are just some examples of how the 1% Invests.

Private Banking

When most people think of banking, they imagine checking accounts, debit cards, savings accounts, and conservative investment products such as certificates of deposit (CDs) and savings bonds. For the 1%, banking is a much more comprehensive experience. For starters, private banking includes more personalized service — no waiting in teller lines to cash a check or make a deposit. The private banking client has a point of contact that assists with everything from notarizing documents to making investments.

The interest rates on loans and investment products tend to be a little better as well. Jumbo mortgage loans and CDs are much more accessible, and the fees for almost all banking services are negotiable. Larger amounts of money moved through the bank allow for greater degrees of compromise when it comes to fees and closing costs. Many private banking institutions also have in-house services to assist with things such as tax and estate planning as well making it a virtual one-stop shop for almost anything the 1% might need when it comes to their personal finances.

Hedge Funds

Hedge funds are private investment vehicles that give their portfolio managers much greater degrees of control over investment decisions with limited oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), allowing them to engage in myriad investment strategies that most people don't have access to. Only accredited investors are allowed to invest in hedge funds — individuals who have a net worth of $1,000,000 or an annual income of $200,000 for the previous two years with the expectations of making at least that in the current or upcoming year.

Participants in hedge funds may find themselves involved in a number of strategies designed to maximize gains through the use of leverage, short selling, derivatives, currency trades and many others. The risks are generally higher than those found in products such as mutual funds, making them suitable only for qualified investors.

Limited Partnerships

Accredited investors have the opportunity to invest in high-risk vehicles known as limited partnerships. They become limited partners in enterprises — generally in real estate or energy such as oil or gas — and reap the benefits of ownership in the form of regular distributions. The risks are high, especially in the oil and gas partnerships, but the payoffs can be orders of magnitude more than the original investment.

In contrast to the 99%, here are some examples of how the 99% invests.

Qualified Retirement Plans

The primary investment vehicle of the 99% is a qualified retirement plan such as a 401k, 403b, or IRA. They allow pretax contributions in order to reduce tax liabilities and allow those contributions to grow without having to pay any kind of tax on the gains until the money is withdrawn. Many employer-sponsored plans come with employer contribution matching up to a certain amount as well, sending overall returns well above 100%.

Mutual Funds

For most people, the biggest exposure to stock investments lies in the form of mutual funds, either through a qualified retirement plan such as a 401k or an IRA or through a brokerage account. These diversified investment products come with professional managers who buy and sell individual stocks within their portfolios to optimize returns. Many funds can be purchased for as little as $50 a month, making them accessible for most people.

Brokerage Accounts

Owning a business is a dream many people have. Most people make that dream a reality by starting their own businesses or buying into established franchises. Another way to accomplish this dream is by purchasing shares, making the investor a part owner of that business.

Buying and selling individual stocks can be risky and requires due diligence on the part of the investor. However, anyone can sign up for an account and trade stocks, options, currencies and even futures, giving them the ability to take control of their own financial lives.


The old adage “it takes money to make money” is certainly true when it comes to the 1%. With greater wealth comes greater investment opportunities and better professional management. While many investment vehicles are off-limits to the 99%, careful financial planning and adherence to modern portfolio theory (MPT) can still help you reach your financial goals such as home ownership or retirement.