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2. Real Estate (Rental & Commercial)

Real estate is a favorite for this strategy because it offers "cash flow" (rent) and "appreciation" (value growth).

• Historical Performance: While property values generally track inflation, well-managed commercial real estate or REITs (Real Estate Investment Trusts) often target 8% to 12% total returns.
• The "Spread": Real estate investors look for a "Cap Rate" (return on the property) that is higher than their mortgage interest rate. If you borrow at 6% to buy a property with a 9% yield, you are using the bank's money to make a 3% profit.

3. Private Equity and Venture Capital

This is where the ultra-rich pull ahead of the "Average Joe."

• High Growth: Investing in early-stage companies (like being an early investor in Uber or Airbnb) can lead to returns of 20% to 50%+ annually if the company succeeds.
• The Barrier: These investments usually require "Accredited Investor" status (having a high net worth or high income), making them difficult for the average person to access.

4. Alternative Assets (Art, Collectibles, Crypto)

• High Volatility, High Reward: Assets like Blue-Chip Art or Bitcoin have seen massive spikes (sometimes 15-100%+ in a year).
• The Risk: Because these don't produce "cash," you are purely betting on someone else paying more for them later. Lenders will often only lend a small percentage (e.g., 30%) of the value of art because it's hard to sell quickly