Many people assume the only way to invest is through stocks. While, yes…stocks are a great way to invest your money and potentially see some real gains over time, but there are plenty of other venues for investing, some of which are considered much safer than your typical stock investment.
There are several reasons why a person may be averse to the prospect of stock investments. If you haven’t been investing long enough and have yet to see any real improvements in the market, you may be under the impression that stocks are not worth the trouble. Maybe the lack of control you have over the market has even led to feelings of stress or helplessness. This is common and can be a valid reason to explore other paths to investing your hard-earned money.
Best Stock Market Alternatives
Luckily, there are plenty of ways you can invest, not all of which are as risky as playing the market. Here are a few examples of solid investments you may want to experiment with over time.
- Gold and other commodities
- Your own property
- Real estate
- Equipment leasing
- Peer-to-peer lending
- Art, antiques, sports cards
- Angel investing
- Your business or skills
There are endless routes to generating wealth. In order to determine which investment strategy is best for you, a little research can go a long way. First, consider what you are interested in. What are some of your hobbies and passions outside of your work? Maybe you are a good shopper and love hunting for the best deals, or perhaps you’ve got an eye for real estate and enjoy browsing properties and studying the market. Finding an investment strategy that aligns with your lifestyle can make the process more enjoyable and sustainable.
Let’s take a deeper look at some alternatives to the stock market and how they may benefit you as you seek to build long-term wealth.
Gold and other commodities
You may have seen the price of gold and other commodities fluctuate over the years, giving you a sense that this type of investment is risky. However, gold and other commodities are typically relatively safe investments. Whether through exchange-traded funds, purchasing stocks in gold miners or other related companies, or through the purchase of physical product, there are a variety of ways to invest in precious metals.
Real estate has long been a relatively safe bet when it comes to investing and doing so has never been easier. While it’s rare for any type of investment to be 100% fool-proof, real estate investments do have a solid reputation for yielding returns.
There are several ways to invest in real estate that don’t require you to throw all of your money into a property. Technology has made real estate investments more convenient, with platforms like Fundrise allowing for fractional shares and thus, lower risk. If you are dealing with long-term rentals, you can hire a property manager to take care of the day-to-day operations like collecting rent and dealing with maintenance.
- Related: Read our Full Fundrise Review
Your own property
Lending rates are at historic lows, meaning your chances of securing a great deal on home loans are high. But investing in real estate doesn’t just mean buying. There are other ways you can increase the value of your property while taking advantage of the great rates you’ll find today. For instance, you can invest in building a new addition to your house, or even refinancing your mortgage. Refinancing at a lower interest rate can help save you thousands of dollars throughout the course of your loan. This is why a growing number of borrowers are choosing to invest in their own property rather than in stocks.
You may have heard all about the bitcoin and cryptocurrency craze over recent years. There’s a reason for the hype. If you don’t mind digital assets, cryptocurrency does have the potential for some big returns if you play your cards right. But be aware that cryptocurrency has a history of being quite volatile. While this can be a fun and interesting way to invest, keep in mind that it’s not the safest method.
If you do indeed decide to invest in Bitcoin or other forms of cryptocurrency, the good news is that setting up an account is relatively easy and takes just minutes. You’ll need to provide information such as your Social Security number, your bank account number, and a credit or debit card on file. You may even need to upload a photo of your ID. And while Cryptocurrency can seem safe, it’s important that you exercise caution. Bitcoin and other forms of crypto investing are not insured by the SIPC, meaning you aren’t protected against online breaches. This in and of itself can deter many users from experimenting with cryptocurrency.
Peer-to-peer lending is gaining popularity among investors for several reasons. For one, it’s relatively easy to get started. Secondly, these yield above-average returns. For instance, investors might see 10%-12% per year through peer-to-peer lending, which is more than they may yield when investing in savings and bonds.
How do you get started? You can go through a platform like LendingClub, which will allow you to view the profiles of various prospective borrowers. You’ll sift through potential borrowers’ basic information, as well as information like loan amount and purpose for the loan. You’ll also gain access to an evaluation of their credit, allowing you to make an educated decision about where your investment money will go.
Art and antiquities
Modern technology has made investments in fine art and antiquities more accessible than ever. With galleries and auctions moving online, a new wave of buyers has emerged, driving up competition and strengthening the market.
In general, the antiquities market has proven quite steady.Investing in antiquities and fine art has the potential for impressive returns if you know what to look for. What’s more – you can use some of these to decorate your home as you wait for it to appreciate.
However, learning the tricks of this trade is easier said than done. If investing in art or antiquities sounds like something you’re interested in, it may be a good idea to consult with an art or antiquities dealer to determine which pieces have real value so you know what to look for.
McDonald’s, Chick-fil-a, Holiday Inn…these nationwide chains are helping franchise owners across the world build generational wealth. If you are looking for a long-term investment with active involvement, it may be time to think big and consider how investing in a franchise can benefit your future.
Granted, a franchise isn’t for everyone. You will need a moderate to large investment to get started, but it could very well be worth it. After all, operating a successful franchise can do incredible things for your portfolio.
Before deciding whether a franchise is the right decision for your investment strategy, you’ll need to take into account all of the moving parts. Chances are good that you will need to establish multiple locations in order to generate the type of income that has potential to build real wealth. You’ll also need to be actively involved in the leasing of land, hiring management, and other critical duties associated with franchise investing. It’s important that you carefully evaluate whether or not you can keep up with the duties of running a successful franchise or risk ruining your investment before it truly begins.
Many people have great ideas for businesses but never seem to secure the funding to get them off the ground. Investing in someone else’s business may be a worthy investment if you believe in the cause. Becoming an angel investor allows for a unique opportunity to help someone else realize their own dream while potentially turning a profit. By investing a portion of your money in getting these start-up businesses up and running, you’ll be able to grow with the business and increase your profits over the long run if the business is successful. The opportunity to be part of something new and interesting is reason enough for many wealthy investors to take note. Plus, angel investing can yield a higher rate of return on your initial investment, making this a favorable alternative to your typical stocks.
One unique way to invest is through the leasing of equipment. Many businesses require leased equipment to complete projects across a wide scope of industries. You can earn a profit by investing in equipment and then renting it out to these companies. Once the equipment is paid for, you have the option of selling it or continuing to rent it out until it reaches the end of its life. Whether office furniture, construction machinery, medical equipment, or other devices, this may be a low-risk way to invest your money while supporting businesses in growth.
Your own business
Many experts agree that investing in your own business is a wise use of your money. In many ways, this is true. Perhaps you’ve always wanted to own your own business but have never had the assets to do it. Or maybe you’d like to invest in new courses and certifications to help you charge more for your services or go back to school to earn a professional degree that could earn you a higher income. Investing in your own business or further education is a great way to put your money to good use in hopes of obtaining a brighter financial future.
Investing is complex. There is no one-size-fits-all solution for how to best invest your hard-earned money as each investor has a unique portfolio, assets, and goals to work with. The harsh truth is that you might need to withstand a fair amount of trial and error before finding the right investment for you, and perhaps even lose some of your money in the process. While few investments are fail-safe, you can increase your chances of building sustainable wealth by doing your own research, carefully weighing your options, and speaking with a skilled financial advisor who can help walk you through it. By keeping a diverse portfolio, you can increase your chances of finding that one worthy investment avenue and riding it until it starts delivering the value of return you’ve been searching for.