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Warren Buffett, Elon Musk, and Jeff Bezos are among the wealthiest Americans who ever lived. The majority of their wealth is in stocks. But when it comes to investing in the stock market, today’s rich young Americans are not following in their footsteps.
The stock market has long been the go-to choice for people looking to invest their money. But that could be about to change as a younger generation — with a preference for alternative investments outside the shaky stock market — enters the scene.
According to a survey from Bank of America, individuals aged 21 to 43 with at least $3 million in assets only have 25% of their portfolio invested in stocks — compared to 55% for wealthy investors aged above 43.
Most rich, young Americans (93%) say they plan to allocate more of their portfolio to alternatives in the next few years. So, what alternative investments are capturing the interest of these young millionaires?
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A golden opportunity to hedge against inflation
The Bank of America survey revealed that among wealthy young investors, 45% own gold as a physical asset, and another 45% are interested in holding it.
Historically, gold has served as a hedge against inflation and market volatility. Many investors turn to “safe haven” assets like gold during economic and geopolitical instability to preserve their wealth.
The enthusiasm of investors has indeed propelled the price of gold to record levels with the precious metal recently surging past the $4,000 per ounce mark.
There are lots of gold assets to choose from, including gold bars, coins and gold stocks. A gold IRA is a type of individual retirement account that allows you to invest in physical gold and other precious metals.
Priority Gold is an industry leader in precious metals, offering physical delivery of gold and silver. Plus, they have an A+ rating from the Better Business Bureau and a 5-star rating from Trust Link.
If you’d like to convert an existing IRA into a gold IRA, Priority Gold offers 100% free rollover, as well as free shipping, and free storage for up to five years. Qualifying purchases will also receive up to $10,000 in free silver.
To learn more about how Priority Gold can help you reduce inflation’s impact on your nest egg, download their free 2025 gold investor bundle.
Artwork: a creative way to diversify
More than 72% of younger investors (ages 21-43) believe it is no longer possible to achieve above average investment returns by investing solely in traditional stocks and bonds. Art is one of the alternative investments that has captured the attention of smart investors.
With over $67 billion in annual transaction volume and a total estimated global value of $1.7 trillion, art represents a massive asset class, according to Deloitte.
In the past, you had to be ultra wealthy to invest in art, considering you needed to have the millions it takes to buy a painting at an auction.
But Masterworks has now changed that. This investment platform has made it possible for more investors to access this prized asset.
Instead of buying a single painting for millions of dollars at auction, you can now invest in fractional shares of blue-chip paintings by renowned artists including Pablo Picasso, Basquiat and Banksy.
All you have to do is select how many shares you want to buy and Masterworks will take care of the rest.
Masterworks investors have realized representative annualized net returns like +17.6%, +17.8%, and +21.5% (among assets held for longer than one year) and new offerings often sell out quickly.
- See important Regulation A disclosures at Masterworks.com/cd
Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)
Real estate: rich with opportunity
Real estate has long been considered a solid portfolio hedge, as rent and property values tend to increase with inflation. It’s no surprise that high-net-worth individuals — regardless of their age — see opportunity in this asset.
In the Bank of America survey, 31% of younger people said real estate presents the greatest opportunities for growth. Federal Reserve data also shows that the top 1% of Americans hold over $6 trillion in real estate assets.
First National Realty Partners allows accredited investors to access institutional-quality commercial real estate investments. With FNRP, investors own a share of properties leased by national brands like Whole Foods, CVS, Kroger and Walmart, providing a stable, positive cash flow without the worry of tenant costs and management.
With FNRP, investors can become the landlord of these big-name brands, accessing the potential for greater returns, diversification, and transparency.
New investing platforms are also making it easier than ever to tap into the residential real estate market.
For accredited investors, Homeshares gives access to the $36 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors.
With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.
With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.
If you’re not an accredited investor, crowdfunding platforms like Arrived allow you to enter the real estate market for as little as $100.
Arrived offers you access to shares of SEC-qualified investments in rental homes and vacation rentals, curated and vetted for their appreciation and income potential.
Backed by world-class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio regardless of your income level. Their flexible investment amounts and simplified process allows accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work on your part.
Cryptocurrency: more than a craze
Investors used to be skeptical about cryptocurrency, perhaps due to its speculative and highly volatile nature. But it has now entered the mainstream, and especially with President Trump vowing to create a “strategic national Bitcoin stockpile”, crypto has surged to a global market cap of $3.68 Trillion.
It’s no surprise that the wealthy millennials and Gen Z are fond of this asset class. In the Bank of America survey, 29% of younger people said cryptos offer the greatest opportunities for growth, while only 7% of the older group agreed.
Rich young Americans also allocated 15% of their portfolios to crypto, compared to 2% of the older generation.
If you’re interested in getting in on the crypto game, you can join the club through Robinhood Crypto, where you can buy and sell crypto without any trading fees or commissions.
What’s more — you can get up to a 1% deposit match on all crypto deposits and transfers.
Robinhood Crypto has the lowest average trading cost in the U.S., which means you could get up to 3.6% more crypto when you trade with Robinhood Crypto.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.