Any investment philosophy can be back tested with defined parameters and declared the victor.
My answer is based on comparing a 14 year track record in real estate vs 29 years in stocks, options and mutual funds. When comparing the two approaches, I've invested similar amounts, made 4x more in real estate and done it in half the time. The extra time spent on real estate investing has been compensated with a salary and not included in the investment portion of the returns. Some real estate investments were leveraged with personal guarantees that added risk not present in a 401k. Some stock/option trades involved margin that created risk not present in non-recourse CRE.
Short Answer: Income producing real estate is better. My two favorites are passive multi-family investing and independent owned self storage. Light industrial and office/warehouse are my next set of favorites. With real estate, you can reap the spoils and still maintain the tax advantages. With stocks, you either wait 'til 59 1/2 or pay taxes as you go, diminishing the returns. I get money every month from real estate, but most of my stocks are locked up in retirement accounts.
Longer Answer:
Independent Owned Real Estate - Best option for highest % returns.
-Single Family Rentals (1-4 units) independent owner self managed or via a property manager.
-Multi-Family Rentals (5+ units) independent owner self managed or via a property manager.
-Single Tenant Net Leased - Retail, industrial, medical, office i.e. Dollar General, Sonic Drive In, DaVita or you favorite local mom/pop business
-Multi Tenant Net Leased - Same as above with more tenants, i.e. strip center, office building, multi-tenant warehouse
-Self Storage - from small class C up to large class A. A larger property can support hiring a part time or full time manager or both.
-RV & Mobile Home Parks - similar to storage. Smaller parks operate with a park host vs full time management.
-Any of the above could be bought purely for the yield from day one OR they could be a value-add property where you improve the cash flow via management and rehab.
-Farm land rental - Cash rent (2-4 annual payments) could also include a profit split on harvest.
-Raw land speculation - you pay holding costs with no income while waiting on appreciation
-Land development - This gets into some gray area between investing and speculation. It is the ultimate value-add investment because you are starting with dirt and create a cash flowing asset. You can exit at any point in the development cycle from acquisition, entitlements, groundbreaking, C of O or stabilization.
-Flipping IS NOT investing, it is a contracting business.
-I've done all the above except multi family, RV parks and farm land, although I do have close ties to investors in those three categories.
-The best parts of real estate are inflation protection and tax free access to equity via refinance.
Passive Real Estate - Best option when you aren't comfortable or interested in running a business.
-All of the above assets with someone else managing the asset and taking a cut of the revenue and profits for doing so.
-Each Private Placement Memorandum is different. DYODD. Fees and payouts vary widely.
-Some offerings are only for accredited investors, others accept sophisticated investors. Learn which one you are.
-If you have more money, the SEC has fewer guardrails.
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SEC Regulations - Here is a good summary of Reg CF (crowdfunding), A+, Reg D 506 b & c
-You are investing in a deal sponsor as much as the actual property. Vet them both.
-Local RE clubs are one place to meet deal sponsors, especially for Reg D 506b (sophisticated investors allowed, no advertising)
-Returns are generally lower than individual ownership, but you aren't making operational decisions. It is what you pay for outsourcing the headaches.
-My experience has been limited to Reg D 506b as an accredited investor. I've actively searched for, met and vetted every deal sponsor.
Stocks:
-Individual stocks are great if you know how to pick them. Warren Buffet and others have done well here.
-It takes time researching stocks, probably more than it does with real estate.
-Realize you are buying part of a company, not a trend line on a chart.
-Index ETFs are one way to reduce risks and possibly returns.
-If you crave the "action", get out now while you still have money.
Not Stocks, but Equity:
-With a 5-6 figure down payment you can buy 100% of a small business.
-"Acquisition Entrepreneurship" is the Bing/Google search phrase.
Options:
-You are buying and/or selling insurance.
-If you know how to calculate risk and have self discipline you can make more money that with stocks.
For non-retirement accounts I use a tax efficient approach. BRK stock and S&P ETF make up the bulk.