My question is, because they make so much money, do they keep their millions/billions in a bunch of different banks b/c most only insure up to like $250,000 or so? How do they keep it safe?
Wealthy people tend not to have very much cash or liquid assets (easily convertible to cash) lying around, at least relative to their total wealth. Instead, the vast majority of their money is usually tied up in investments and would take time to sell-off and convert to cash.
These investments could be physical (e.g. buying real estate / properties) or non-physical (e.g. putting money into stocks and investment funds). It doesn’t really make sense to keep all that money sitting around in bank accounts because it earns very little interest over time. When, however, you have hundreds of thousands or millions of dollars lying around, it’s not too difficult to have it invested and turn a fairly substantial profit.
There are always risks, of course – but generally speaking, when you have a lot of money, the risk-reward ratio works in your favor and there’s a good chance, particularly if you diversify your portfolio and assets, that you will earn a large return on some or most of your investments (and be able to minimize your losses on the few investments that don’t turn out that well).
No one keeps even a few hundred thousand dollars in cash (bank accounts included). That a terrible waste of money. Rich people have their money in various investments (what I cant say, that’s way too variable), and if you have more than a few thousand dollars cash yours should be too.
They keep it safe by diversifying. If you have a billion dollars and keep it scattered across 100 investments then at worst you’d lose 10 million if one completely collapsed but then hopefully the other ones would make up for it.
The big exception would be people like Bill Gates back in the day who had tons of Microsoft stock. If Microsoft would have collapsed like Enron he would have been hosed.
Only poor people and young people (who are poor) keep the mass of their net worth in a checking account. Most people have a great amount of their net worth tied in an investment, whether it be a 401k or individual retirement account, or real estate like a house, or a business.
Same goes for wealthy.