While investing in the stock market is still a great option for your retirement, you may want to look at other areas to put your money to work.
These other assets can be used to elevate your retirement further, build your wealth, and help protect you against economic downturns.
By investing without the stock market, you are diversifying your investments and including assets that don’t exactly follow the stock exchanges.
And before, many of the options below required a lot of upfront money or were only for the accredited investors.
But now with technology and financial laws altering, more people have a chance to diversify their investments beyond the stock market.
Are Stocks A Good Investment?
Investing in stocks is the most common and popular way to invest your money. This is especially a great choice for your future retirement as your money can compound overtime to help you build your nest egg.
The average stock market return over time fluctuates between 8%-12+%, some years higher and some years lower.
Plus, over time you have to adjust due to inflation. Typically, people usually end up around 6%-7% when it comes to calculating investment returns in the stock market.
Personally, I don’t recommend anyone ignore investing in the stock market in some way. If anything, you should invest in your company’s 401k or open an IRA to invest.
However, there is no reason that all your money needs to be invested in the stock market.
It is very important to diversify and if you take investing seriously, you should consider expanding your assets in some of the below options.
How Can I invest My Money Without Stocks?
Yes, you can invest your money in however you see fit based on your own financial goals. While the stock market will probably play some role in your life, you have plenty of other options.
Many of these assets below will help you make money while you sleep or “generate passive income.” But more importantly, they give you additional options to diversify.
If you’re ready to invest outside the stock market, then you’ll want to dive into the below assets.
Real Estate
I’ve written quite a bit about investing in real estate, but it is one of the most popular options outside of the stock market.
While you can invest in some publicly traded REITs like the Vanguard index fund VGSLX, that will typically follow stock market trends.
Instead, you want to look at real estate that does not rely on the stock market or follow the exchanges. One of those ways is to invest in rental properties.
While it can be time-consuming and some initial upfront cash may be needed, the long-term results can help you grow your net worth. Check out some of these real estate investing books to get started.
Real Estate Crowfunding
Your other option is to invest in real estate crowdfunding, which takes having to manage properties or the need for a large starting investment out of the equation.
Instead, you can build a portfolio of actual properties or commercial real estate with as low as $500. Two of the best platforms are Fundrise and DiversyFund.
And just like actual rental properties, these are a great way to invest without the stock market.
If you want to learn more about either, I’ve done a full overview of each.
Investing in Fine Art
Typically, investing in well-known art has been only for the mega wealthy. Seriously, you’ve probably seen the price tags on art by the likes of Andy Warhol, Claude Monet, and others that go well into the millions.
Additionally, the other options to invest in art included art funds (for accredited investors) or taking a chance on a new coming artist and hope they get popular years down the road.
Again, not easy for the standard investor who doesn’t have the accredited investor status (net worth north of $1,000,000 or makes over $200,000 per year).
However, there is a crowdfunding platform called Masterworks that allows you to invest in well-known blue chip works of art.
The team are industry experts who buy verified art and work with the SEC. Then investors can buy “shares” of the art piece. And when they sell the piece, investors get distributed the profits.
They have (or had) art from Andy Warhol, Jean-Michel Basquiat, Keith Haring, and others.
Each share is sold for $20, although different pieces might have a different minimum initial investment, with some as low as $1,000. Learn more and request to join Masterworks for free here.
Start Investing in Gold Bullion
If you have been around investing and investors, then you probably have read or heard about investing in gold bullion. This can be in the form of gold bars or coins.
Many times, precious metals are another option to invest outside of the stock market, like silver and gold.
There ETF funds on the stock exchanges that do include gold as well, but you can invest in physical gold too (which can be a better option).
Typically, you’ll see the prices and demand for gold rise during a bear market, as gold can quickly be sold for cash during an economic collapse.
Regardless, investing in gold can be a good investment for diversification.
However, there is a bit to learn and understand with gold investments as you want to ensure you are buying quality, are not being scammed, and purchasing from reputable places.
Plus, how you buy, the pricing, shipping and handling of gold can all vary and something you need to factor in as well.
If you are looking for more info, read some of the below sources:
Invest Conservatively in a CD Ladder
Generally, when people see investing in a CD or “Certificate of Deposit” they scoff or push it off to the side. Mostly because CD interest rates are low and can take years to payout.
However, the interest is usually higher than just putting your money into a savings account.
The other benefit is having your money invested relatively safely over time with guaranteed interest. Plus, you can keep stacking them as long as you want.
The downside is your money is tied up typically for 5 years, so if interest rates increase your money can’t be used to get the better rates. Additionally, if you want to take money out early for cash, you’ll typically have a withdrawal penalty.
How A CD Ladder Works
So a typical CD ladder model will divide your investment evenly over five CDs, with one CD maturing each year. If you had $5,000 to invest, you could spread out your money like this:
- $1,000 in a one-year CD
- $1,000 in a two-year CD
- $1,000 in a three-year CD
- $1,000 in a four-year CD
- $1,000 in a five-year CD
After one CD matures, you can reinvest in another five year CD and so on. Eventually, you ladder will have long-term CDs, which can earn you the highest interest. But you could also take the proceeds as well.
Learn more about CD Laddering here if you are interested in exploring a safer and more conservative investment outside of stocks.
Invest in an Online Business
There is no doubt that online businesses have taken off and there is good money to be made. Of course, there is plenty of risk and you have to know how to navigate online marketing to do well.
But one of the popular options is to invest in websites. With website investing, you acquire a web property to earn income, build it up to earn more, or to flip later on for more.
Think of a website as digital real estate that can appreciate in value overtime like actual real estate would.
These could be niche blogs, large content websites, domains, or even buying a domain and designing the website to then sell.
You can buy or sell online websites via marketplaces like Empire Flippers, Flippa, on your own, or even find some on domain registrars websites (for example GoDaddy’s domain marketplace).
You can also start from scratch and invest your money in a brand new online business.
For example you can start a WordPress blog, a e-commerce business with Shopify, Amazon FBA, or some other variation. There are multiple ways to make money as well as increase the value in order to sell it in the near future.
Peer-to-Peer Lending (P2P)
Instead of investing in assets, with Peer-to-Peer lending (P2P), you’ll fund various loans that individuals need for various reasons like personal loans, debt consolidation, or refinancing.
The reason this is attractive to the borrower is it removes the banks out of the lending. This also keeps the fees and interest rate for the borrower lower.
But as an investor, you are still getting decent returns of anywhere from 4%-7% (Based on historical returns from LendingClub and Prosper).
And as an investor, you see your money return monthly as borrowers make their monthly payments with interest.
The positive to Peer-to-Peer lending is that you can choose multiple loans to split your investment into, each with different risk levels and return percentages.
When you diversify your loans, you set yourself up to be protected in case someone does not pay their loans or something happens in general.
Since you have multiple other loans with decent returns, if another loan was to go bad you still have money coming in.
However, Peer-to-Peer Lending is not available in every state. So be sure before you sign-up for LendingClub, Prosper, or another platform — that you legally can invest with them. The platform typically has a list in their FAQ about which states these loan investments are available too.
Digital Currencies
Whether you like to admit or not, digital currencies like Bitcoin, Ethereum, Litecoin, Ripple, and many others are not going away.
The U.S. government is interested in regulating it and more businesses are accepting digital currency. However, it’s hard to know the real value and where in the future it may go, which makes investing in digital currencies challenging.
Only a few short years ago, you couldn’t avoid the news about Bitcoin as it skyrocketed in value due to the demand.
While that has since leveled off a bit and many other digital coins appeared, these became alternative investment options for many people.
I will caution that these markets are very volatile and you should proceed with caution. Too many people during the Bitcoin boom who had no real understanding of the blockchain or these coins were putting a substantial amount of money into it.
And when it dropped in value from major selloffs, many people lost a lot of money. And at the same time, many people became Bitcoin millionaires too.
If you are interested, I recommend using the digital currency exchange Coinbase, one of the leaders in the space. They also have a ton of resources to learn more about digital currencies.
Are you investing without the stock market? Or are you investing in the stock market and other assets like the above? Let me know in the comments below!