Wealth Decoded: How the Rich Build and Protect their Fortunes
The proven strategies wealthy individuals use to grow, protect, and preserve their wealth across generations.
You ever walk down the street and spot a nice car and ask yourself, “How can that person afford it?” Well, there are a bunch of ways that person can afford it, but surely it isn’t by mistake. In the modern era, the wealthy have always found ways to make more out of their circumstances without relying solely on luck. Now, don’t get me wrong, there’s always some degree of luck involved, but to create real, lasting wealth that transcends generations, we cannot depend on luck alone, we must rely on financial education.
Global Diversification is Key
A wise man once said, “Don’t put all your eggs in one basket.” This saying remains true for investing. Wealthy investors spread their investments across different asset classes such as financial instruments like stocks and ETFs, and commodities like gold and silver, and with a well-balanced portfolio, they can manage investment risks more effectively.
Example: During the 2008 financial crash, investors with mostly U.S. stocks suffered massive losses, with some portfolios losing as much as 50 percent. While international equities also dropped sharply, investors with truly diversified portfolios, spreading across bonds, commodities, and global equities, were better positioned to reduce overall losses. You never know what might happen in the world, but with diversification, you can always be more prepared.
Tip: Even adding one international ETF or a small allocation to a commodity like gold can give your portfolio geographic and asset-class diversification.
Tax Optimization Across Borders
Tax laws aren’t your enemies, they can be your best friends. High-net-worth individuals leverage tax codes to reduce financial burdens and potentially save thousands to millions in taxes.
Learn about specific savings accounts in your home country, like TFSA or RRSP in Canada, take advantage of tax treaties across countries to avoid double taxation, and some even set up offshore entities like trusts, LLCs, or holding companies to significantly minimize taxes.
Tip: Look up tax-advantaged accounts in your country, small contributions stack up over time.
Currency Hedging
Part of diversification includes holding multiple currencies. A classic example is Venezuela. In 2018, the bolívar was rendered practically worthless due to hyperinflation peaking over 1,000,000 percent. One million bolívar notes couldn’t even buy a loaf of bread. Citizens turned to stablecoins like Binance USD (BUSD) and Reserve (RSV), cryptocurrencies pegged to the U.S. dollar, to preserve purchasing power. By 2025, a significant portion of Venezuelans used stablecoins for daily transactions, prioritizing remittances and inflation hedging over speculation.
Tip: Have a portion of your savings in a different currency or invested in a reliable stablecoin to mitigate domestic market volatility risks.
Family Governance
Once wealth is built, the next challenge is keeping it in the family. The wealthy manage this through trusts or international foundations for cross-border inheritance, structured family governance to educate younger generations on financial principles, and legal strategies to minimize taxes during wealth transfer.
Tip: Even if you’re just starting, document your financial goals and start learning about effective ways to pass down inheritance, more on this in future issues.
Key Takeaways
Wealth is not created by accident, learning and applying the right strategies is essential.
Diversify across asset classes and geographies to minimize risk.
Use the tax code to your advantage and find legal ways to optimize your financial burden.
Never rely on a single currency, always have a backup plan.
Think multi-generationally, leverage your knowledge to secure your lineage’s future as well as your own.