Why do the rich do not invest all money in mutual funds?

These days mutual funds are sold with promise of 15-20% annual returns. This much returns come without any headache. If it is so easy to grow money, why are the rich guys taking headache of starting and running more new businesses? They should keep all the funds in mutual funds and leave peacefully.

Because the returns are not guaranteed. There's an old saying when it comes to investments, 'don't put all your eggs in the same basket'. Diversification is the key. Always divide it into low risk, medium risk and high risk.

What funds offer that kind of return?

rich invest in real estate so far mate

Rich people have one thing in common (when they earned it themselves) they have a high drive for success. They want more! So 15-20% compared to a new business venture which could pay off big time in a few years. Also, mutual funds are not 100% save. Theres a company or bank behind a mutual fund which will buy stocks, ETFs, futures etc. with a pool of money from the customers. The company or bank of course takes a big chunk of the profits and if you Believe it or not they make mistakes too. You can't image how much money was lost in 2008, there were dozens of big investment firms going bankrupt. Also many of these firms do shady business. They always try to invent new instruments which are as complicated as possible to understand. You should watch the movie "the big short", that will open your eyes.
Why would you give someone your hard earned money to "gamble" around with it if you could just do it yourself? Especially nowadays it's easy to make a portfolio by yourself with fairly "save" ETFs or big company stocks. I remember a story I've read about a trader of a bit investment company in Japan. There's all sorts of different trading or investment styles, but this company was doing hft futures trading. Meaning they buy and sell future contracts worth billions every day. One day this particular trader came completely drunk to work, pushed some wrong buttons and shorted a futures contract instead of buying it. They lost millions or billions from that single mistake.

BassTrackerBoats said:

What funds offer that kind of return?

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OP seems to be from India. There are some funds here that offer ~12% returns consistently. 15-20% is extremely rare and the ones that may end up offering that kind of return are extremely high risk, so you may end up losing 50% or more instead of gaining 15-20%.

Because we don't put everything in one basket
that's called risk management so we always prefer the diversification in the investments we do.

Where are you getting this much rate of return? I have amount in MF but I am not getting that much of ROI

A lot of rich people put their money in mutual fonds.

I don't think you can get 15-20% returns via a mutual fund. What funds are giving these type returns or are you pulling this out of thin air?

No one can guarantee man, make sure to read always terms and conditions

Yes, Looks like you are from india, So I am.

Here is what is happening

- Mutual find in last 3 years have Gave me 90% return
- Because share market have given them 150% return over 3 years.
- Right now market is at scary top, People are Cashing out fast.
- to make money is market you gotta just " buy low sell high" or hold it till you are 60.
- annual return 5 years ago in market was 7-10% and Last 3 years are 30%, what do you thing gonna happen next? Be ready for Negative return, it could be next of may not be. No one knows.

Ahem TAXES?

Do you know the portfolio of all the rich people ? There can be chance that major portion of these rich people might already be making best use of these options you mentioned.

Nobody does that - better focus on investing your time in something that is productive op.

Because any desiscion basically is an agreement and if someone leaves change everything for the rest, less money to invest less oportunities, besides that everyone have an agresive or pasive method at the moment to do bussines and in this case with mutual funds you will always play safe with low earnings at long term but geting money back for big sharks wait to get a little return seems not good.

Supply and demand. If everyone put all their money into mutual funds, then the price of everything else would drop.

Sell stocks and invest in mutual funds? The stockmarket crashes and people buy it up cheap.

Everyone sells their properties to invest in mutual funds? House prices crash. Who buys? No one. So they can't sell and the value goes to 0. If it's *everyone*. But if the majority did it, then house prices would crash. More sellers, not enough buyers.

Natural systems of supply and demand.

Rich love to invest where they get Quick BIG Returns like Stocks / Property / Crypto -

Off course, they plan their portfolio smartly - with a "short portion" in Mutual Funds.

Parker2010 said:

Rich love to invest where they get Quick BIG Returns like Stocks / Property / Crypto -

Off course, they plan their portfolio smartly - with a "short portion" in Mutual Funds.

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Stocks can result in big loss. Very risky. That is why mutual funds actually exist.

most properly rich people have gotten there through successful businesses - and so they tend to continue focusing on that - parking excess funds in a diversified basket of investments