In the United States, the 401(k) plan has become so ubiquitous that it is often synonymous with retirement.  Although the 401(k) is a great tool in the investor's wealth building arsenal, including for those hope to someday make it into the top 1% of wealth in the United States, it would be a mistake to ignore other avenues of amassing money; money that when invested, can earn dividends, interest, rental income, and capital gains.

To help you think about your retirement funds beyond the traditional 401(k) plan, here are some other ways you might spend your working years building wealth for your family through your investment portfolio.

Real Estate Investments - An older friend of mine owns millions of dollars in rental properties and office buildings, which were slowly acquired over the decades as a result of disciplined savings without a lot of debt.  Every month, tens of thousands of dollars gets deposited in her checking account as her tenants pay to use the properties in her retirement fund portfolio.  With no liabilities, she escaped the recession unscathed and now has a higher net worth than when the world began falling apart in 2008.  That is what happens when you are armed with cash, have a strong balance sheet, and are willing to take advantage of opportunities in the midst of crisis.

Private Businesses - One interesting retirement fund plan for corporate executives or others who can't stand the idea of endless days of shuffleboard and golf is to start or acquire a small business.

 I recall reading a story in one of the major financial publications detailing retirees who had decided to open profitable franchises ranging from donut makers to coffeehouses.  Despite working more hours than they did during their career, they considered it retirement because these entrepreneurs answered to themselves (and their customers), were able to put their experience to work, stay engaged in the community, and live off the income generated from the retirement fund money they invested.  This type of investment is not appropriate for everyone.  Running a business is a special skill and some otherwise very intelligent people would be broke if they had to make a living operating a company.

Intellectual Property - One of my favorite stories about retirement fund investing involves songwriter Franke Previte.  He didn't have a single penny to invest yet he amassed an intellectual property portfolio worth millions that comes in the form of the copyright ownership of two hit songs: "Time of My Life" and "Hungry Eyes" for the movie Dirty Dancing.  Previte reportedly receives six-figure royalty checks from his intellectual property, estimated somewhere in the range of $340,000 to $645,000 each and every year.  The songs were written after he got the idea for the them on the highway, pulled over the car, and began scribbling out the lyrics.  He turned down the opportunity to sell his assets for years, despite needing the money.  

To give you an idea of how valuable intellectual property can be for your retirement fund, especially if you create something that society wants such as a hit song, patent, book copyright, or trademark, to generate the same level of annual dividends that Previte does from his royalties would require somewhere between 165,050 shares and 313,107 shares of PepsiCo.  At today's market price, that would take $9,959,117 to $18,892,876.  Franke Previte literally manufactured that kind of wealth out of thin air.

For another example of relying on intellectual property as a source of retirement funds, look at the article in The Wall Street Journal by Nancy Keates from September 9th, 2011 called The House Built By Chipmunks.  In it, she describes how Ross Bagdasarian Jr. turned the cartoon characters Alvin and the Chipmunks into a fortune that provides a seaside mansion in California and huge streams of royalties and profits.

Blue Chip Stock Reserves - I know of a man who had an interesting secret retirement fund outside of his 401(k) plan that involved investing in stocks.  Specifically, it involved investing in blue chip stocks.  Every week for nearly 30 years, he put $100 in shares of Johnson & Johnson and $100 in a portfolio of low-cost bonds.  He treated these investments like expenses, just as one would paying the gas or electric bill.  He reinvested all of the dividends and profits and now has somewhere in the high six-figures to low seven-figures in extra retirement fund money that very few people know exists.  He has no plans for the wealth, but instead uses it as an extra cushion.

Broaden Your Retirement Fund Investment Perspective

Of course, there are other important sources of retirement fund income including pension plans, Social Security benefits, and annuities that provide guaranteed income for life.  These alternative sources of retirement fund money can lower the amount you need to have saved, as explained in the article You May Not Need as Much Money In Your Retirement Funds As You Think.  The key take away is that you shouldn't make the mistake of thinking your 401(k) plan or Roth IRA is the only investing vehicle available to you and your family.  It's not.  Opportunities can often be found all around you.