Geoffrey J. Passehl manages money for many clients — some of them very rich. After years of working with the ultra-wealthy as a private wealth advisor and founder of Passehl Financial, a Northwestern Mutual private client group, he’s figured out exactly what they do differently.
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These aren’t complicated theories or confusing financial jargon. They’re specific things billionaires do with their money that regular people don’t. Here are the five biggest differences Passehl sees between billionaires and everyone else.
They Treat All Their Accounts Like One Big Portfolio
Most people handle their retirement accounts separately from their regular investment accounts. They make decisions for each account without thinking about how they work together. Billionaires do the opposite.
“They manage all investment accounts holistically in retirement. This approach can help reduce risk and increase tax efficiency through strategic asset location between qualified and non-qualified accounts,” Passehl explained.
This means billionaires look at their entire money picture as one system. They can move money around to pay less in taxes and reduce their overall risk. The wealthy also pick different investments inside this bigger system.
“Wealthier retirees also tend to use equity portfolios made up of exchange-traded funds (ETFs) versus mutual funds. ETFs tend to be less expensive and more tax efficient,” Passehl shared.
Regular investors can use this same idea. “For everyday investors, managing your accounts as part of a unified strategy can lead to smarter tax decisions and better long-term results,” Passehl said.
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They Turn Charity Into a Money Strategy
Regular people might donate to charity when they feel like it or when someone asks them to. Billionaires plan their giving like they plan their investments.
“Philanthropy is more than a feel-good gesture for billionaires; it’s a core part of their financial strategy. Whether through private foundations, donor-advised funds or direct charitable contributions, they approach giving with the same level of intention and planning as they do investing,” Passehl explained.
This smart approach helps them in multiple ways. “Strategic philanthropy allows them to support causes they care deeply about while also unlocking powerful tax advantages and legacy-building opportunities,” he said.
“Many billionaires view charitable giving as a way to leave a lasting impact beyond their business success. They often collaborate with experts to ensure their donations are effective, measurable and aligned with long-term goals,” Passehl shared.
You don’t need billions to think this way about giving. “For everyday investors, this is a reminder that giving back doesn’t require billions but purpose. Even modest charitable contributions, when thoughtfully planned, can make a meaningful difference and become a valuable part of a holistic financial plan,” he said.
They Spread Their Money Around Like Pros
Most people know they should diversify their investments, but billionaires take this to a whole different level.
“Billionaires diversify with precision and purpose. Instead of concentrating their wealth in a single asset class or market, they spread risk across a carefully curated mix of investments: public equities, private businesses, real estate, commodities, venture capital and even alternative assets like art or collectibles,” Passehl explained.
This isn’t random diversification or just following basic investment advice. “This intentional diversification isn’t about chasing trends but about building a resilient portfolio that can weather economic storms and capitalize on emerging opportunities,” he said.
The key lesson for regular people is changing how you think about spreading your money around. “For everyday investors, the takeaway is clear: Diversification isn’t just a buzzword, it’s a mindset. It’s less about picking the next hot stock and more about creating a financial foundation that can adapt, endure and grow over time,” Passehl said.
They Think Way Further Into the Future
Most Americans worry about paying bills this month or saving for next year. Billionaires plan for their great-grandchildren.
Passehl pointed to research that shows this difference: “While many Americans admit to focusing more on immediate needs than future goals, millionaires and high-net-worth individuals are far more likely to have a comprehensive financial plan (84% vs. 52% of the general population).”
Billionaires build wealth that will last long after they’re gone. “Billionaires embrace building wealth strategies that span generations instead of reacting to short-term noise,” he explained.
Here’s the weird part — thinking long-term actually makes billionaires spend less money, not more. “Despite their wealth, many affluent individuals are surprisingly disciplined when it comes to spending. They often choose to live below their means, not because they have to, but because they value long-term security, legacy planning and purposeful giving,” Passehl shared.
Their spending focuses on things that matter beyond just enjoying life right now. “Their focus is frequently on preserving wealth for future generations or supporting meaningful causes, rather than indulging simply because they have the means to do so,” he said.
The lesson for regular people is basic but powerful: “For everyday investors, this mindset offers a powerful lesson: True financial success is about how intentionally you plan, spend and give, not about how much you get in your paycheck. Building wealth starts with clarity, discipline and a long-term perspective.”
They Get Professional Help
Most people try to handle their money alone or maybe get advice from friends. Billionaires work with teams of financial professionals.
Passehl shared research that shows this huge difference: “According to Northwestern Mutual’s Planning & Progress Study, millionaires are significantly more likely to work with a financial advisor — 69% compared to just 33% of the general population.”
Billionaires use these professional relationships to handle complex money challenges. “High-net-worth individuals, including billionaires, often leverage these relationships to develop comprehensive, long-term financial strategies that address key concerns such as taxes, healthcare, inflation and market volatility,” he explained.
“This proactive approach provides greater confidence and control over their financial future,” Passehl said.
The wealthy also use advanced financial products in their professionally managed plans. “Additionally, affluent retirees can benefit from a well-structured financial plan designed to generate a reliable income stream throughout retirement. These plans often incorporate strategic assets like annuities, which help stabilize income and reduce the impact of short-term market fluctuations,” he said.
You don’t have to be ultra-wealthy to get professional financial help. “Whether you’re planning for retirement, managing debt or saving for a big life event, professional guidance can help you make informed decisions and stay on track, even when markets are uncertain,” Passehl said.
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This article originally appeared on GOBankingRates.com: I’m a Wealth Manager: 5 Things Billionaires Do That You Don’t
