5 High-Net-Worth Investing Strategies

High-net-worth investors are those with at least $1 million in investable assets. While hard-and-fast investing strategies like keeping tabs on asset allocation, holding a diversified set of assets, and focusing on long-term investments, apply to everyone there are some strategies that specifically benefit those who already have substantial money to work with. Here are five investment strategies for high-net-worth individuals.

A financial advisor could help you manage your high net worth to leverage the best possible returns.

High-Net-Worth Investment Strategy #1: Hedge Funds

Hedge funds are a type of investment strategy which caters to those with a high-net-worth, often requiring minimum investments of at least $1 million. A hedge fund pools the money of all investors to make complex investments, including investing in various derivatives. Types of hedge fund strategies include long-short funds, market-neutral funds and event-driven funds.

Hedge funds have the potential for big earnings, but also some significant risk. Fortunately, high-net-worth investors should have the cash to allow them to take the risks.attached to these types of complex investments.

High-Net-Worth Investment Strategy #2: Private Investing

Wouldn’t you have loved to be an early investor in any of the companies that now dominate the world? Facebook, Netflix, Amazon and other tech firms all started off as small companies and needed private investing. If you’re a high-net-worth investor, you have the ability to find the next Mark Zuckerberg and get in on the ground floor.

This investment strategy obviously takes a bit of work and more than a bit of luck. You have to put in the time and effort to find an entrepreneur who you believe in and who has a product or service you think can make it big, or be lucky enough to have someone come to you. There’s also significant risk here, as most companies don’t end up becoming global monopolies. If you hit it big here, though, there’s a chance you’ll be hitting it very, very big.

High-Net-Worth Investment Strategy #3: Tax-Free Municipal Bonds

When you’re a high-net-worth investor, keeping your tax bill under control is almost as important as the investments themselves. That’s why municipal bonds are attractive to high-net-worth individuals even if they aren’t as exciting as some of the other strategies on this page. Municipal bonds earn money and aren’t subject to taxes. They might not have the highest yields, but municipal bonds provide a high-net-worth investor with steady growth that isn’t subject to Uncle Sam’s hands.

High-Net-Worth Investment Strategy #4: Give to Charity

Giving money to a charity should give you a good feeling for giving some of the money you’ve earned to help other people. It is a good investment strategy too, though. Charitable donations are deductible on your taxes each year, so it can help you lower what you owe to the government each year.

There are specific rules for how charity can help you on your taxes, so make sure you understand how it works or get help from a financial advisor.

High-Net-Worth Investment Strategy #5: Traditional Investments

A high-net-worth investor in a suit, checking his phone.

Finally, a reminder that investing in traditional asset classes like stocks and bonds can also be a part of a high-net-worth investment strategy. The big difference, though, is that high-net-worth investors can use their money to build a vast, diversified portfolio. Dividend stocks, growth stocks, and a myriad of bond classes can all be part of your strategy.

High-net-worth investors can work across multiple time horizons. Certain short-term investments can be flipped quickly if an opportunity is there but long-term investments typically make up the majority of a high-net-worth investment portfolio. Buying and holding allows high-net-worth investors to really take advantage of economic growth.

Tax-Efficient Investing Strategies

Tax management plays a central role in preserving and growing wealth for high-net-worth investors. Beyond municipal bonds, several strategies can help you reduce taxable income and improve after-tax returns.

Tax-loss harvesting: By selling losing investments to offset gains elsewhere in your portfolio, tax-loss harvesting can lower your tax bill while maintaining your market exposure through reinvestment in similar assets.
Holding period optimization: Long-term capital gains rates are generally lower than short-term rates. Structuring your investments with a longer time horizon can help minimize taxes when you sell appreciated assets.
Asset location: Not all accounts are created equal. Tax-inefficient investments like high-turnover mutual funds or bonds may belong in tax-deferred accounts such as IRAs or 401(k)s, while tax-efficient index funds can be better suited to taxable accounts.
Qualified Opportunity Zones (QOZs): Investors who roll capital gains into qualified opportunity funds may be able to defer, reduce, or even eliminate certain capital gains taxes, depending on the length of the investment.
Donor-Advised Funds: For investors interested in philanthropy, donor-advised funds (DAFs) allow you to make a charitable contribution, claim an immediate tax deduction, and then distribute funds to charities over time while the assets continue to grow tax-free.

Asset Protection and Estate Planning

High-net-worth investors often focus as much on preserving wealth as on growing it. Without proper asset protection and estate planning, taxes, creditors, or family disputes could erode the wealth you’ve built. Several strategies can help secure your financial legacy:

Trust structures: Establishing revocable or irrevocable trusts can provide privacy, control, and protection from estate taxes. Dynasty and charitable remainder trusts are especially useful for those looking to pass on wealth or support charitable causes for generations.
Gifting strategies: Taking advantage of annual exclusion gifts allows you to transfer wealth to heirs tax-free. In 2025, an individual can gift up to $19,000 tax free. Gifts over $19,000 deduct from a lifetime gift tax exemption of $13.99 million. This means high-net-worth individuals have a lot of latitude for tax-free gifts provided they haven’t gone over the lifetime exemption yet.
Life insurance for estate liquidity: Permanent life insurance can provide immediate cash to pay estate taxes or debts, ensuring that your heirs don’t need to liquidate investments at unfavorable times.
Asset titling and liability protection: How you title assets, whether individually, jointly, or within a trust, can affect how they’re treated in lawsuits or divorce. Asset protection trusts and limited liability entities can also shield investments from potential claims.

Because these strategies involve complex tax and legal considerations, it can be a good idea to work closely with an estate planning attorney and financial advisor to coordinate a plan that aligns with your goals and family dynamics.

Bottom Line

A high-net-worth investor checking her investments on a tablet.

High-net-worth investors can look to various investment strategies to build on their wealth and make their money work for them. Hedge funds, municipal bonds, charity, and traditional investing can all be part of the plan. Building a diversified portfolio is still key, and the extra cash makes it possible to invest across the spectrum.

Investing Tips

It’s even more crucial for high-net-worth investors to get professional help to protect and build their fortune. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s free investment calculator to get a sense of what a particular investment might look like down the road.