Historically how did the wealthy invest their money?

The wealthy have invested their resources for thousands of years, likely since before history was recorded. There are references to investment management in biblical sources. The Talmud has a portfolio allocation (1/3 cash, 1/3 real estate, 1/3 business).

Some of what you could invest in was in old times different than now. Some is the same. Before very recent times, there was no stock market for example. Also, there may have been legal restrictions preventing certain ownerships. Even now, many countries do not allow land ownership (China) or restrict it (Mexico).

Real estate, jewels in some cultures, and business investments were all common choices. In more recent centuries, insurance contracts were used.

The most common choice, almost universal across all cultures, was education. This choice has always been highly effective at transferring wealth. The wealthy made sure their children had the best possible education. It may have been with private tutors. The method is not the point. Education for the next generation was and still is a significant use of resources. The next generation then start life with skills and some power. Add the parents’ connections and some power becomes a lot of power.

Your wealth is not just your home, cash, investments, etc. It is also the present value of your future earnings. Education, connections, and resources (and some luck) create the future potential. Always has been, always will be.


As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. If you would like to submit a post to my blog, please contact me.

If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.

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Questions for the comments

Did my explanation make sense? Do you agree or disagree with what I said?

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