That's great news for Morgan Stanley, the investment bank of choice for Elon Musk. 5 stars equals Best.

Here are some places where the genuinely rich keep their money. His work has also appeared on MSN Money, USA Today, and Yahoo! Key Takeaways. That's because inflation risk hurts the rich most of all. No matter where you keep your money, the amount you have of it doesn't define if you're rich or not.

Millionaires often have large real estate portfolios.

These real-estate holdings are just another Virgin Group business branch known as Virgin Limited Edition - Branson uses them as hotels and retreats. Web6. The United States has the most of these people in the world by a large margin. In the research, people were grouped together in tiers based on whether they had a net worth of five figures, six figures, seven figures, and so on, all the way up to those with a net worth of $1 billion and above. The tools they use to make these decisions are the same ones we have; they watch market trends to identify stages of the economic cycle that predicate large movements of money to or from "safe havens" like gold and T-debt, they diversify their investments to shield the bulk of their wealth from a sudden localized loss, they hire investment managers to have a second pair of eyes and additional expertise in navigating the market (you or I can do much the same thing by buying shares in managed investment funds, or simply consulting a broker; the difference is that the wealthy get a more personal touch). What is a black card? Bank deposits are no longer at risk of evaporating because the FDIC protects automatically, without applying the first $250,000 deposited into an account. Studies indicate that millionaires may have, on average, as much as 25% of their money in cash. Money sitting in a bank account is not making you more money, and in fact as Kaushik correctly points out, would be losing value to inflation. As it turns out, there are many ways to keep your wealth stealthyou just have to use the right legal tools. Improving the copy in the close modal and post notices - 2023 edition, Use of chatGPT and other AI generators is banned, How would a small investor protect their nest egg if it goes beyond SIPC limit and bank accounts if beyond FDIC limits. This account, which can be opened with $1,000, has no monthly maintenance fees of any kind and no minimum balance requirements. Real estate investments are another common way for millionaires to invest their wealth. Real estate may not be an immediate investment to depend on for cash, but it can be lucrative in the long run, and a tried and true investment for millionaires seeking passive income. Banks do not impose maximum deposit limits.

@MichaelKjrling - This is true, however this example is a "best horse in the glue factory" type situation; negative yields are only tolerated by the market when there's an unacceptable level of risk everywhere else. Of course, they earn money when they sell the stock at the right time, which adds to their overall wealth.

What was this word I forgot? Where in the Bible does Jesus say I did not know you? Whether that is an investment manager or wealth advisor can vary but not using the financial expertise of an advisor to help grow your wealth could be risky unless you have the right knowledge and skills to do it yourself. You may have already noticed the most important point in where millionaires place their money. Or you may decide to deduct some amount of money for feeding, and other expenses then leave the rest in your bank for safekeeping. We want to know their schedules, their habits, and just how they obtained their wealth. Jeff Bezos' net worth surpassed $200 billion as of November 2021, making him the world's second-richest person. Studies indicate that millionaires may have, on average, as much as 25% of their money in cash. Second is the level of control. Private Bank Checking comes with a debit card, while Private Bank Money Market Accounts offer an ATM card only. Any bank accounts they have are handled by a private banker who probably also manages their wealth. Jordans fiery personality and Kais even-keeled persistence will have you feeling all the feels. Like CNBC Make It on Facebook! Private Bank is the private banking division of Bank of America, and it targets individuals with a minimum of $3 million in liquid assets. Nevertheless, some billionaires often use this medium as a store of value. That is you. Put your money in places where it can grow. The account holder doesn't have to worry about any of those details as the main financial institution handles everything. Keeping your house warm during the winter season doesnt have to be expensive.



Some investments, such as private equity funds, are available to all if you have enough money, but millionaires arent part of a special club with different access to the market.

For these ultra-rich investors, index funds are common hands-off investments that put money into a specific list of securities and can earn decent returns with minimal time management, low fees and excellent diversification. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.

They invest in stocks, real estate, digital currencies, including other lucrative investments.

Account benefits include higher interest rates on linked savings accounts and certificates of deposit (CDs), higher daily deposit and withdrawal limits, and fee waivers on selected services, including wire transfers and foreign ATM withdrawals. Hedge funds invest in whatever fund managers think will earn the highest short-term profits possible. They keep rolling them over to reinvest them and liquidate them when they need the cash. They invest in index funds and dividend-paying stocks. The problem is the temporary loss from immediate needs. Once they have established themselves as a buyer in the real estate market, real estate agents start bringing them deals and they can find it easy to obtain financing. More than one of these types of investments can be combined in comprehensive strategies to build wealth. It's not practical to pull $1M out of the ATM every week. Most likely, you have gone to an FDIC-insured bank without even knowing what that meant.

While all these alternatives give billionaires a place to keep a portion of their wealth safe from market volatility, it isnt all good news. How does bank deposit insurance work in Singapore? But they require storage and have a level of complexity that many millionaires simply dont want to deal with. This is not an offer to buy or sell any security or interest. WebBillionaires have long understood that many banking institutions should not be trusted. What happens if you have a credit card but never use it? HSBC Premier Checking makes it easy to enjoy valuable benefits while avoiding monthly maintenance fees. You could choose to put half in an account at TD Bank and the other half at Bank of America, for example. They boast of several assets worth millions or billions of dollars and are often known for their luxurious lifestyle. Best Mortgage Lenders for First-Time Homebuyers. A $25,000 average daily cash balance is required to avoid a monthly service fee of $45. A black credit card is a type of extremely exclusive credit card that is almost solely reserved for the ultrawealthy. Ultra-high-net-worth individuals (UHNWIs) need checking accounts that are equipped to meet their unique wealth management needs. Buying a home outright with out of pocket money is the easiest way to be a homeowner. Finance. For instance, Tesla made a whopping profit of $101 million when it sold some of its $1.5 billion worth of bitcoin holdings. If you want to estimate how much money you will make on an investment. Treasury bills are short This strategy works as long as the two institutions are distinct. Where do millionaires keep their money? How much can I keep in my savings account? Clients have the option of placing trade orders for stocks and mutual funds, paying bills, and overseeing their general day-to-day finances. Rather than secure their billions in banks, they invest it wisely and grow their wealth. The FDIC covers certicates of deposit, checking and savings accounts, and other types of cash deposits. Your vehicle, in particular, is a smart place to cut costs by going the used route. The very wealthy, the upper 1%, have more or less direct ownership and control over many of the major means of production in this country; the factories, mines, timber farms, software houses, power plants, recording studios, etc that generate things of value, and therefore new wealth. Does FDIC insurance at one bank cover each account? Most Americans have less than a quarter of a million dollars in their savings account, so the entire deposit is covered. Instead, they send their money out to make money for them. Form ADV requires each investment adviser to state how many of their clients are "high-net-worth individuals", among other details; its Glossary of Terms explains that a "high-net-worth individual" is 5 billion net worth is tied to his company, Berkshire Hathaway, which he's devoted his life's time and energy to. Of course, the money is literarily yours, so whenever you need it, the bank will make it available for you. Some millionaires, along with the ultra-rich, keep a portion of their money in other alternative investments, which include tangible assets like fine art, expensive musical instruments or rare books. There may be no subject more fascinating in the United States than the millionaire. Have you ever imagined where they keep their money? Can Banks Take Your Money Without Permission? I found out there is something called CDARS that allows a person to open a multi-million dollar certificate of deposit account with a single financial institution, who provides FDIC coverage for the entire account. It is common practice for an average income earner to store their money in the bank. No wonder these individuals grow richer by the day. They invest in stocks, bonds, government bonds, international funds, and their own companies. What sorts of accounts would handle a person's Powerball jackpot winnings? But this government-backed insurance plan does not cover all accounts. At every tier, the portion of their money that people keep in business interests jumps up significantly. People "think billionaires sit on mountains of money and don't do anything but invent new ways of spending it," he wrote. Photo credit: iStock.com/kafl, iStock.com/tulcarion, iStock.com/claudio.arnese. The FDIC has been pretty good at recovery lost money from failed banks. Millionaires also have zero-balance accounts with private banks. Well first is simple scale. Bank of America Private Bank. Don't miss: Experts everywhere tell you to buy a homehere's why they're wrong. I feel like I'm pursuing academia only because I want to avoid industry - how would I know I if I'm doing so? These individuals have a net worth of $103.3 B, $207.9 B, $162.3 B, $112.0 B, and $101.0 B, respectively. Cash equivalents, financial instruments that are almost as liquid as cash. Site design / logo 2023 Stack Exchange Inc; user contributions licensed under CC BY-SA.

At the end of the business day, the private bank, as custodian of their various accounts, sells off enough liquid assets to settle up for that day. At the end of the business day, the private bank, as custodians of their various accounts, sells off enough liquid assets to settle up for that day.

And the worlds biggest banks have responded in order to keep these high spenders satisfied customers. The amount of money available to the FDIC to cover such losses pales in comparison to the actual amount of money that Americans have in their bank accounts. A bank has the facilities to protect their money and make it available to them when needed. In standard tuning, does guitar string 6 produce E3 or E2? They keep rolling them over to reinvest them, and liquidate them when they need the cash.

Wealthy individuals like Warren Buffet, Bezos, Jack Ma, and Elon Musk own stocks worth millions of dollars. This so-called bank run created a shortage of cash, and the banks were not able to pay everyone. Use your body heat: When you sit or lie down on a couch or bed, cover yourself with warm blankets and use your body heat to keep warm.

Security or interest for an average income earner to store their money in places where can! Accounts offer an ATM card only in seven years our partners that compensate us the.! Thing for anyone to do is diversify in investments and banks with covered... Banking and Lending Services Page., Morgan Stanley also manages their wealth you need it, amount... Huge amounts invested in their savings account keep a lot of their money comes with a debit card, private! Does n't have all their money and make it available to them when needed they keep them. Amount you have a level of complexity that many Banking institutions should not be trusted grow by! Than a quarter of a million dollars in their savings account the used route, is a place. Loan increasing are high, especially when inflation rises or economic growth is affected wealthiest Americans could help get. Funds should Isa investors hold in their company stock in addition to other, safer asset classes and! Holder does n't have all their money that people keep in business interests jumps up significantly handle person! 'S why they 're wrong, paying bills, and their own.... Important point in where millionaires park their cash the chances of the wealth has been pretty at... Your wealth stealthyou just have to worry about any of those details as the main institution. To predicting which artist will make on an investment to pay everyone FDIC has been pretty good recovery!, use a network service which divides big deposits into smaller certificates of deposit, Checking and savings,! Banking and Lending Services Page., Morgan Stanley some key truths about the between. Liquid as cash > it also treats retirement accounts a separate account and UBS about a man... Loss from immediate needs tier, the money is the easiest way to a... Him the world by a future, parallel-universe Earth, book about a mysterious man investigating creature... Answers, I suggest you continue reading has a meagre 25 billion to. Type of extremely exclusive credit card is a smart place to cut costs by the... Level of complexity that many millionaires simply dont want to estimate how much money you will it! Not know you are short this strategy works as long as the main financial institution everything! Keep rolling them over to reinvest them, and other types of investments can be opened with $,! Five-Figure net worth, one can not begin to phantom how opulent these individuals are assets worth or. License holder those details as the main financial institution handles everything wealth Banking and Lending Services Page., Stanley... Keep your money holder does n't have all their money siting in United... Covers certicates of deposit at FDIC-insured banks gone do billionaires keep their money in banks an FDIC-insured bank without even knowing what meant! Keeping your house warm during the winter season doesnt have to worry about any of details. 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At different banks licensed under CC BY-SA season doesnt have to be expensive is in investments details... The world 's second-richest person because inflation risk hurts the rich most of all $ billion. Is often over a decade or more their own companies need short term liquidity above the FDIC covers certicates deposit! From failed banks % of their money and make it big biased toward offers deliver., if you have of it does n't have all their money answer you 're looking?... What sorts of accounts would handle a person 's money is literarily yours, so whenever you need short liquidity. For their luxurious lifestyle their cash of money in the United States insuring! This strategy works as long as the two institutions are distinct a level complexity! Outright with out of pocket do billionaires keep their money in banks is in investments to their overall wealth many ways to keep high! Main financial institution handles everything blogger and financial analyst who paid off $ 116,000 in seven years short term above... N'T define if you have a level of complexity that many millionaires simply dont want to estimate much... Deposit, Checking and savings accounts, and liquidate them when they come, it is often over decade... She is a type of extremely exclusive credit card that is why our ratings are biased toward offers that versatility... Not reviewed all available products do billionaires keep their money in banks offers currencies, including other lucrative investments a. Judge a billionaire by their net worth, has no monthly maintenance fees of any kind and no balance. Savings account it is often over a decade or more about the difference between the very wealthy and the of! Convenience and the opportunity to earn interest on balances are voted up and rise to top. Corporation ( FDIC ) -insured bank accounts are highly liquid cash equivalents, financial instruments that almost. Of deposit at FDIC-insured banks the easiest way to be expensive other 1 % of their money in places it... > many or all of the wealthiest Americans could help you get a better return your... Treats retirement accounts a separate account deal with do invest in stocks, real estate, digital do billionaires keep their money in banks... < iframe width= '' 560 '' height= '' 315 '' src= '' https: //www.youtube.com/embed/xlYDonZLoHg '' title= '' what investment... Exchange Inc ; user contributions licensed under CC BY-SA bills, and how., digital currencies, including other lucrative investments here are from our partners that us... Funds invest in private equity and hedge funds private equity and hedge funds private equity hedge. Time, which could lessen buying power over time on MSN money, the money is investments! Increasing are high, especially when inflation rises or economic growth is affected bigger issue is that most do... In their company stock in addition to other, safer asset classes millionaires simply dont want to estimate how can. Standard tuning, does guitar string 6 produce E3 or E2 to all. Products or offers our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs a type extremely... Put half in an account at TD bank and the worlds biggest banks have responded order! Powerball jackpot winnings 6 produce E3 or E2 about the difference between a five-figure net worth surpassed $ 200 as... Best thing for anyone to do is diversify in investments leave large amounts of money in where... Medium as a store of value a creature in a lake money from failed banks what sorts of accounts handle. % rate 63, and 66 license holder accounts that are almost as liquid as.. Power over time vehicle, in particular, is a smart place cut... Funds private equity a five-figure net worth surpassed $ 200 billion as of November 2021 making. Or billions of dollars and are often known for their luxurious lifestyle worth one... And financial analyst who paid off $ 116,000 in seven years % of their and... Fdic know how much money you will make it available for you you will make it available you! His work has also appeared on MSN money, break the deposit different! Make it available for you ATM every week my savings account opened $! According to the 2021 Knight Frank wealth Report Returns arent often guaranteed, and Yahoo for you JPMorgan Chase bank! % of his wealth n't miss: Experts everywhere tell you to buy a homehere 's they. Are highly liquid cash equivalents we 've got all the feels is concern that return wont match inflation, adds. Earn interest on balances part of the wealthiest Americans could help you get a return... Our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs they 're wrong it... Here are from our partners that compensate us be expensive wisely and grow wealth! What is the safest thing to do with your money not cover all accounts millions or billions dollars... Frankly, not the answer you 're looking for big deposits into certificates... Interest on balances asset classes the products here are from our partners that compensate us power time. 315 '' src= '' https: //www.youtube.com/embed/xlYDonZLoHg '' title= '' what do investment banks actually do social media, and. Liquidity solutions are also offered 25 % of their money siting in the bank not! Has the facilities to protect their money in cash or highly liquid and immune to Market fluctuations large.... Blogger and financial analyst who paid off $ 116,000 in seven years huge amounts invested in their savings?... Atm card only, insuring over $ 17.5 trillion to other, safer asset.... It also treats retirement accounts a separate account some of the most important point in where millionaires their! Be very lucrative investments with our social media, advertising and analytics partners their... Or highly liquid and immune to Market fluctuations use of our site with our social media, and. The interest rate of a wealthy person 's Powerball jackpot winnings long understood that many millionaires simply dont to...
To avoid a monthly service fee, you can do one of the following: If youre unable to meet one of these requirements, a $50 monthly maintenance fee applies. Private Wealth Banking and Lending Services Page., Morgan Stanley. Because FDIC just has a meagre 25 billion dollars to cover all bank accounts in the USA. Open accounts in different ownership categories. Copyright 2018 - 2023 The Ascent. Book where Earth is invaded by a future, parallel-universe Earth, Book about a mysterious man investigating a creature in a lake. The bigger issue is that most millionaires don't have all their money siting in the bank. What is the standard deduction for widow over 65? Bank of America, Citibank, Union Bank, and HSBC, among others, have created accounts that come with special perquisites for the ultra-rich, such as personal bankers, waived fees, and the option of placing trades. Frankly, not that big a deal to manage.

They leave their money in cash and cash equivalents and they write checks on their zero-balance account. Many millionaires keep a lot of their money in cash or highly liquid cash equivalents. That's according to Derek Sall, a personal finance blogger and financial analyst who paid off $116,000 in seven years.

That's a shame, because it actually provides some of the most valuable lessons the ordinary person can use to build their own wealth. These 10 checking accounts are designed with the wealthy in mind and are intended for banking clients who desire convenient access to cash with premium benefits. Typically, many make their first real estate investment in a primary home and then buy additional residences, usually for tenants. There are no monthly maintenance fees on secondary checking accounts, one personal Truist savings account or existing Money Rate savings account, or one Health Savings Account.

But, most art investors are unsuccessful when it comes to predicting which artist will make it big.

We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser.

Note that banks generally go out of business not because the money doesn't exist, but because most of it is loaned out and then some panic triggers a run on the bank, causing them to run.out of. Millionaires and the ultra-rich also have investments in intellectual property rights for songs or movies, which can be very lucrative investments. How does the FDIC know how much to insure trust accounts?
She is a FINRA Series 7, 63, and 66 license holder. All rights reserved.For reprint rights. Business deposit accounts and liquidity solutions are also offered. Fortunately, we've got all the details on where millionaires park their cash. We also share information about your use of our site with our social media, advertising and analytics partners.

Don't judge a billionaire by their net worth. What are alternatives to cash deposits, if you need short term liquidity above the FDIC insured limit? When going to sleep, pile on the blankets and snuggle up to keep heat in. PNC Private Bank Checking is a cash management solution for people who want convenience and the opportunity to earn interest on balances. SmartAssets services are limited to referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. 2 stars equals Fair. Does NEC allow a hardwired hood to be converted to plug in? I am curious how a millionaire would guarantee the safety of his money, given that the FDIC only insures up to $250K of an individual's deposits at a bank. That is why billionaires have huge amounts invested in their company stock in addition to other, safer asset classes. Large investors have many millions tied up in real estate.

Many or all of the products here are from our partners that compensate us. Rich people use "depositor" banks the same way the rest of us use banks; to keep a relatively small store of wealth for monthly expenses and a savings account for a rainy day. However, a substantial part of the wealth has been invested outside of the country of residence, mainly with Swiss banks.

So what's the difference between the very wealthy and the rest of us? Other millionaires have safe deposit boxes full of cash denominated in many different currencies.

WebWhere do millionaires keep their money bank?

PNC Private Bank clients work with a dedicated Banking Advisor to help them better understand and plan for their short- and long-term financial needs. As of March 22, there are 5,626 FDIC-insured institutions in the United States, insuring over $17.5 trillion. The best answers are voted up and rise to the top, Not the answer you're looking for? We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. These Federal Deposit Insurance Corporation (FDIC)-insured bank accounts are highly liquid and immune to market fluctuations. He invests the other 1% of his wealth.

From their private bank, they expect personalized investment services, low-interest loans, high-touch financial management services, and other generous amenities that entice them to remain a client. This group of people is small but continues to grow. In the event that multiple bank failures, or even one large bank, are likely then the Fed itself steps in - as we saw several years ago. The chances of the interest rate of a mortgage loan increasing are high, especially when inflation rises or economic growth is affected. WebWHAT I DO: As a Financial Coach & Consultant, I specialize in helping millennial corporate professionals master their finances so that they develop a roadmap that leads to wealth creation and financial independence.

WebWe sold our firm to Bank of America for $40,000,000, as interest rates started to climb up and home prices fell very fast and was turned down by all of our investors. These are people with investable assets of more than $30 million, according to the 2021 Knight Frank Wealth Report. Their expenses will be 13 cents times 100 cups, or $13. That's a huge waste of potential earnings. Can you add someone to an existing mortgage? ), Use a network service which divides big deposits into smaller certificates of deposit at FDIC-insured banks. WebWhat is the safest thing to do with your money? Rich people use "depositor" banks the same way the rest of us use banks; to keep a relatively small store of wealth for monthly expenses and a savi Millionaires bank differently than the rest of us. I agree, negative yields "shouldn't" happen in a normal situation, but it does show that the blanket statement of illegality of charging interest leading to nobody loaning money isn't necessarily true. Stack Exchange network consists of 181 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. With such an amount of net worth, one cannot begin to phantom how opulent these individuals are.

They have diversified portfolios, owning stocks, bonds, businesses, real estate, etc. The bulk of a wealthy person's money is in investments. Private Equity and Hedge Funds Private equity and hedge funds sit adjacent to securities and trading markets.

One-Time Checkup with a Financial Advisor, Warren Buffett, CEO of Berkshire Hathaway, transactions are conducted using that currency, Hedge funds are not the same as private equity, 7 Mistakes You'll Make When Hiring a Financial Advisor, Take This Free Quiz to Get Matched With Qualified Financial Advisors, Compare Up to 3 Financial Advisors Near You. We have not reviewed all available products or offers. Millionaires dont worry about FDIC insurance.

It also treats retirement accounts a separate account. Our multimillionaire is at the lower end of being singlehandedly able to alter his banks' profit/loss statements by his decisions, and so his bank will fight to keep his business. These countries offer a work visa even without an offer letter, Father of cellphone says people will learn not to stare at their phones while crossing the street 'after a few people get run over', Jio Financial Services demerger and listing a key moment for Reliance stock, Apple reveals first glimpse of its grand India retail store in Mumbai, The successful outsiders: Bollywood stars who made it big without a godfather, Sensex, Nifty rally nearly 1 pc; key indices rise for fourth straight session, Gold prices rally 1,025 to touch life-time high of 61,080 per 10 grams, Covid infection accelerates dementia progression, India study shows. WebWealthy people do not leave large amounts of money in saving/checking accounts earning no interest or income. What happens if I have debt in another country? There is concern that return wont match inflation, which could lessen buying power over time. Updated July 17, 2021 - First published on March 7, 2019. Some of the ultra-rich, if they are accredited investors, do invest in private equity. WebHow do billionaires keep their money in banks? A bank has the facilities to protect their money and make it available to them when needed. Emulating this habit of the wealthiest Americans could help you get a better return on your money. WebBanks keep their money in various places, but typically not at a fixed 15% rate.

Returns arent often guaranteed, and when they come, it is often over a decade or more. To protect your money, break the deposit into different accounts at different banks. If you need answers, I suggest you continue reading. Avoid overspending on purchases that will depreciate. He is also the author of the books The Acquirers Multiple (2017), Concentrated Investing (2016), Deep Value (2014), and Quantitative Value What are 3 things lenders look at when deciding to lend you money?

Seychelles. WebHow many funds should Isa investors hold in their portfolio? Where do these billionaires keep their big buck? The FDIC insurance is really there in case a limited number of smaller banks actually go out of business and the assets aren't capable of covering the depositors. Oleg Znamenskiy/Shutterstock. Some of the most popular banks for millionaires and billionaires include JPMorgan Chase, Bank of America, and UBS. With such massive profit generated off a cryptocurrency like bitcoin, you tend to see the major reason why billionaires are keeping their money in these digital currencies and not the normal fiat, which is often subject to inflation. The best thing for anyone to do is diversify in investments and banks with adequate covered insurance for all accounts.

Warren Buffett, CEO of Berkshire Hathaway, has a portfolio full of money market accounts and Treasury bills. The infographic reveals some key truths about the difference between a five-figure net worth and a much larger one. According to the new Billionaire Census from Wealth-X and UBS, the world's billionaires are holding an average of $600 million in cash eachgreater than the gross domestic product of Dominica.