Private equity refers to investments in companies that are not publicly traded on a stock exchange like the NYSE or Nasdaq. When you buy stock in Apple or Amazon, you are investing in a public company. Private equity is the opposite: you are putting money into private businesses, often with the goal of helping them grow, restructure, or eventually go public or be sold.

Historically, private equity was reserved for institutional investors (think pension funds and university endowments) and very high net worth individuals. The minimum investment requirements were often in the hundreds of thousands or even millions of dollars. That is why most people never even considered it an option.

Here is where things are getting interesting. There are now several ways that regular investors can get exposure to private equity without needing a seven figure portfolio.

1. Publicly traded private equity firms. Companies like Blackstone, KKR, and Apollo are themselves publicly traded, meaning you can buy shares in them through a regular brokerage account. When these firms do well, so do their shareholders.

2. Private equity focused ETFs and mutual funds. Some funds now invest in a basket of private equity related assets, giving you diversified exposure without the massive minimum investment.

3. Interval funds and BDCs. Business Development Companies (BDCs) and interval funds are investment vehicles that provide access to private market investments with lower minimums, though they come with less liquidity than traditional stocks.

4. Retirement account options. Some 401(k) plans are beginning to offer private equity options within their fund lineups. If yours does, it is worth understanding what you are getting into before opting in.

Private equity can offer higher return potential over the long term, but it comes with trade offs. These investments are typically illiquid, meaning your money may be locked up for years. They also carry more risk and less transparency than publicly traded investments.

For most people building their financial foundation, private equity is not a first step. Max out your emergency fund, pay down high interest debt, and make sure your retirement accounts are funded first. But if you are at a stage where you are looking to diversify beyond traditional stocks and bonds, it is worth learning more.

The financial world is opening up more opportunities for everyday investors every year. Stay curious, keep learning, and make sure any investment you make fits your goals and your timeline.