A recent report shows that billionaires have three overriding interests in where to put their money. In addition, there's an overarching fear borne of their own success.

Billionaires have to be one of the most watched groups in the world. There's attention when Forbes issues its annual list (195 were on for the first time this year). Even having that much money doesn't guarantee you a spot on the list of the wealthiest.

Financial services company UBS and financial professional services company PwC have their own annual analysis of billionaires. Data covered 1,542 billionaires, up 10 percent over 2015. About 70 percent of them are self-made.

The report provides such insights as the collective wealth of the class was up 17 percent in 2016 to hit $6 trillion. They own or partly own companies that employ 27.7 million people and, for the first time, the number of billionaires in Asia has passed those in the U.S.

All that money means there's a group of people for whom virtually nothing is unavailable. And there are three things they focus on when it comes to their money.

Art

Wealthy people have repeatedly patronized the arts throughout history. Ultra-wealthy people now are a growing part of the world's top art collectors. As the report states:

In 1995, there were 28 billionaires on the list - by 2016, that number had grown to 72. While US collectors continue to lead the list - there were 42 on it in 2016 - Asian, and especially Chinese, art collectors are increasingly active. Just one Asian billionaire was on this elite list in 2006, compared with 14 in 2016.

Public museums are getting more support than ever, according to the report. And private museums, an historical way of showing one's personal collection, are also on the rise.

Sports

Some people play sports. Some collecting team cards. And then, some buy teams, a popular activity for billionaires according to the study.

According to our analysis, more than 140 of the top sports clubs globally are owned by just 109 billionaires. Sixty of them are from the US, 20 from Europe and 29 from Asia. And owning a sports club is not for your fledgling billionaire - the average sports baron is 68 years old with a wealth of USD5.0 billion.
In the US, two thirds of the National Basketball Association and National Football League teams, and half of the Major League Baseball teams, are owned by our "in-scope" billionaires. In the UK, almost half (9 out of 20) Premier League soccer clubs are governed by in-scope billionaires. Asians have made more than half of the billionaires' sports club acquisitions in the last two years

Working with other billionaires for more

Billionaires, according to the UBS and PwC report, invest with other billionaires. They work personal networks and connections through family and banks to "orchestrate deals and investments." It makes sense to work with those you know, and billionaires have to figure that others in their class are more likely to make money, which means jumping on those particular opportunities. They help each other make even more money.

The great fear

The Guardian interviewed the report's lead author, Josef Stadler, who said that income inequality was troubling the billionaire class because the world is essentially in another Gilded Age.

"We're at an inflection point," Stadler said. "Wealth concentration is as high as in 1905, this is something billionaires are concerned about. The problem is the power of interest on interest - that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?"

Sometimes too much of a good thing can become a problem.

Published on: Nov 6, 2017
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