Beating the S&P 500 in yearly returns is a challenging task. Warren Buffett claims that the typical investor can't do it. There are a few ways you could potentially achieve higher returns.

Active Stock Picking: One way to potentially beat the S&P 500 is by actively picking stocks that you believe will outperform the index. This approach requires you to conduct extensive research, analyze company financials and market trends, and make informed investment decisions. However, keep in mind that active stock picking is a challenging and risky approach, and even professional fund managers often struggle to consistently beat the index.

Sector Rotation: Another approach is to invest in sectors that you believe will outperform the broader market. However, sector rotation also requires a deep understanding of the market, and there is no guarantee that you will achieve better returns.

Diversification: Diversification is an essential aspect of any successful investment strategy. You could diversify your portfolio by investing in a range of asset classes, such as stocks, bonds, real estate, and commodities. Diversification helps to spread your risk across different investments, which can potentially lead to higher returns with lower risk.

Alternative Investments: You could consider investing in alternative assets such as private equity, hedge funds, or venture capital. These investments are typically only available to accredited investors, but they can offer higher potential returns than traditional investments. However, alternative investments are often illiquid and require a significant upfront investment.

Timing the Market: Market timing involves predicting when the market will rise or fall and making investment decisions based on those predictions. While some investors have been successful with this approach, timing the market is a difficult task, and even professional investors often struggle to consistently time the market correctly.

Overall, beating the S&P 500 requires a disciplined and informed investment approach that is tailored to your individual risk tolerance and financial goals. Remember that investing involves risk, and there is no guarantee of future returns.