With recent headlines warning of a potential surge in market volatility, more and more investors are looking beyond traditional asset classes and exploring alternative investing paths. Alternative investing, which includes hedge funds as well as private assets like real estate and side businesses, can provide diversification, reduce risk and generate additional income.
Alternative investing has long been considered the domain of the wealthiest and most sophisticated investors, but don’t let that intimidate you. Like many areas of finance, a new generation of technologies and investment classes are making alternative investing more approachable and transparent.
That said, alternative investing still requires checking a few financial boxes before getting started to ensure you’re building from a solid foundation. For example, before diving into alternative assets, investors should consider eliminating any high-interest debt, creating an emergency fund of three to six months of expenses and having at least $100,000 in savings set aside for long-term investments.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Once you’ve established a solid financial foundation, it’s time to start exploring alternative investing options. Here are the three main paths to consider when beginning your alternative investing journey.
The DIY approach.
Many people get their start in alternative investing by buying a fixer-upper investment property or starting a side business, as these are some of the most common alternative investments.
This option requires a significant amount of time and effort, but it can also be one of the most lucrative since you don’t have to pay anyone to produce the returns. You’ll want to make sure you’re equipped with the right resources to help guide you along the way. Some I’ve found to be useful include:
- Blogs (for example, BiggerPockets, Financial Samurai).
- Books (The 4-Hour Workweek, Pioneering Portfolio Management).
- Local meetups (for example, EO, YPO).
Self-directed investing.
This path involves relying on your network to source deals or exploring the many alternative investment marketplaces that have cropped up over the past decade, like EquityMultiple for real estate or AngelList for venture deals, for example.
Self-directed investing requires a lot of research and due diligence, but it can be rewarding if done correctly.
This option is best for someone who is well-networked or has the time and knowledge to perform proper due diligence.
If pursuing this path, it’s critically important you choose deals you believe to be in the top 10% of their category, ideally.
MFOs or tech-asset management hybrids.
If you’re passionate about pursuing alternative investments, but don’t have the time or expertise required with options one and two, outsourcing to trusted experts might be an ideal path for you.
There are two primary options, multifamily offices, like IWP, that offer a range of planning and investment diligence services for a flat fee, or tech-enabled asset management firms like Equi (our platform) that rely on sophisticated data and a specialized diligence team to offer portfolios of what we believe to be the top alternative investment products. This is the most “hands-off” and streamlined approach.
Remember, alternative investing can be a rewarding experience, but it's important to do your research and understand the risks before diving in. It's also important to have a solid financial foundation before investing in alternatives. By following these principles, you'll be well on your way to a successful alternative investing journey.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have MillionsPrivate market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It HelpsSaving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard AboutTiming is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.
-
Caring for Aging Parents: An Expert Guide to Easing the Financial and Emotional StrainEarly conversations, financial planning and understanding the progression of care needs can help to mitigate stress and protect family relationships.
-
I'm a Financial Adviser: The OBBB Is a Reminder for Older People to Have a Long-Term PlanThe new tax bill presents a good opportunity for retirees to revisit tax plans, look into doing some Roth conversions and consider plans for long-term care.
-
I'm an Insurance Expert: This Is Exactly Why Your Insurance Rates Are Soaring (and What You Can Do)A dramatic rise in the frequency and cost of severe weather and wildfires means you need to prepare, prepare, prepare — no matter where you live — for higher premiums.
-
Q3 2025 Post-Mortem From an Investment Adviser: Markets Continue to Climb, Gold ShinesThe third quarter saw market gains driven by Fed rate cuts and strong earnings, despite high valuations and concerns about speculative trading and job growth. Gold and international stocks could be potential hedges.
-
Moving Abroad? You Might Need a Cross-Border Financial AdviserIf you want to live in another country long term, you could benefit from an expert's guidance. Here's how to find a good qualified adviser to help with residency requirements, documentation, financial laws and tax impacts.
