20+ Ways to Invest Outside of the Stock Market

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invest outside of the stock market

Within the span of just two years, the Dow Jones Industrial Average jumped from $15,974 to $26,617 – an increase of 66%!! Since then, it has done absolutely nothing. In fact, it has actually gone down a bit and remained down. Most of the experts are confident that the stock market will continue to grow throughout 2018 and beyond…which is exactly why I am concerned.

It’s kind of like the weather report in West Michigan: whatever the meteorologist predicts, expect something totally different. Similarly, when the financial experts see no reason for the market to take another dive, that’s typically when it falls off the cliff.

If you hold my pessimistic sentiment on the stock market (and if nearly all of your retirement is in your 401k or IRA), then you’re probably looking for ways to invest outside of the stock market. Most blog posts out there give you 4 or 5 ideas for how to do this… I’m about to give you 20, which makes this the most comprehensive “invest outside of the stock market” list out there.

20+ Ways to Invest Outside of the Stock Market

Large cap, small cap, emerging markets, foreign stocks – we don’t want them. What we want right now is to figure out how to diversify our investments away from the stock market. After all, it’s the only way to have a truly diverse portfolio. So let’s get crackin’! Where can we put our money to grow without it being affected by the wildly variable stock market?

retiring extremely early - invest outside of the stock market1) Rental Property

Buy a rental property for $81,000, put another $9,000 into it to fix it up, and voila, you’ve got an investment that yields $12,000 a year (ie. 15% on your investment) and appreciates in value by 7% a year. Plus, you now have a depreciable asset that will shield a bit of your income come tax time! All this is what I’ve found to be the case with my first rental property.

If you’re handy, can sniff out a deal in real estate, and don’t mind managing a high maintenance tenant here and there, then the rental property game is probably one of your best ways to invest outside of the stock market. You’ll earn an income, the property will appreciate, and a portion of your taxable earnings will be shielded. It really is a good deal all around.

How to Get Started:

Mark Ferguson provides an excellent resource titled, “How to Get Started Investing in Rental Properties Quickly“. At this point, Mark has flipped 148 properties and owns 19 rental properties (he flips to earn the money so he can buy, hold, and then rent). If you want to learn about real estate, he’s definitely your guy.

2) Annuities

An annuity is a product that, after you deposit the funds it will pay those funds back to you in small increments with interest over time.

There are two different types of annuities:

  • Deferred, and
  • Immediate

With the deferred annuity, you’ll pay money into a fund over time until you’re ready to make withdrawals – typically in retirement. Immediate annuities pay out right after you deposit your lump sum into the account. In either case, you can decide on a variable or fixed annuity, or a combination of both. The variable annuity pays out based on how the market is doing, whereas the fixed annuity will always just pay a set amount that you agreed to when you purchased it.

On average, a fixed annuity will earn you 2%-2.5% on your money today. If you want to earn a bit more with some added risk, invest in a variable annuity – but then you’re more or less investing in the stock market, which is what we’re trying to avoid here.

Sure, 2%-2.5% for the fixed annuity isn’t much, but it is guaranteed and might be a nice safe place for a portion of your portfolio.

How to Get Started:

Check with the top insurance companies and get quotes. Tell them how much you’re looking to invest and then ask what the monthly payout would be (keep the term length equal for all comparisons). This should give you a clear indication of who is paying you the most interest and giving you more bang for your buck.

3) Bonds

A bond purchase means you loaned a company (or the government) money and are holding their debt. In exchange for your cash, they agree to pay you a certain amount after a predetermined time. Many consider bonds a less risky investment than the stock market, which means it’s often one of the top ways to invest outside of the stock market.

How to Get Started:

First off, where can you buy bonds? Typically, any broker that sells shares of stocks also sells bonds. This means that Vanguard, Fidelity, TD Ameritrade (all the top investment brokers) will have many different bond offers as part of your selection.

Want less risk? Choose a high-grade bond (ie. AAA).

Want a higher return? Choose a bond that’s graded a little lower (ie. B or C), but still has a high probability of paying.

Want to learn more? Check out this comprehensive post at NerdWallet: “How to Buy Bonds: A Step-by-Step Guide For Beginners

4) Certificates of Deposit

A certificate of deposit (commonly known as a CD) is basically a restricted savings account. Lock some money up here and you can earn up to 2.75%. The earnings aren’t going to make you rich, but it’s a safe way to invest outside of the stock market. Plus, it’s way better than the typical savings rate that’s hovering around 1% right now!

How to Get Started:

Setting up a CD is super easy. Just head to your local bank, make the deposit into a CD account, and start earning interest by the end of the day!

5) Money Market

Is a CD too restrictive for you, but you’d still like to invest outside of the stock market? Maybe a money market account suits you a little better. Move the money wherever you want, whenever you want.  Our bank currently offers 0.50% interest, which is pretty standard. Your bank might be a little better or a little worse, but probably right around there.

How to Get Started:

Unless you’re looking to use this money in the near future, I honestly wouldn’t recommend that you use this as a means of investing. It’s just too low of an interest rate. But, if you think you’d like to use this money in the next couple years and you’d really like a safe investment outside of the stock market, then I guess this would fit the bill.

Just like a CD, just head to the bank, ask them to open a money market account for you, and that’s it! It’ll be ready and earning that paltry interest in minutes.

6) Collectibles

My version of investing in collectibles when I was a kid was buying countless packs of baseball cards…

Let me stop and give you a lesson on collectibles…

Something that’s mass produced and not all that desirable is NOT a collectible. I spend hundreds, probably thousands, of dollars on my baseball card collection. I sold the whole deal last year for $75.

So long story short – When I mention collectibles, I’m not talking about Pokemon cards or Pogs (anyone remember those??). I’m talking about real collectibles that aren’t made anymore and are crazy hard to find (think American Pickers or Backyard Bounty). This could be antique toys, hard to find motorcycles, signage, replacement parts, or maybe even an old piano. Who knows! But, if it has value and it’s only getting harder to find, then it might just be worth investing in.

How to Get Started:

First, you’ve got to know what collectible you’re going to start going after (here’s a solid list from The Street: “7 Collectibles That Are Worth Investing In“). Then, you’ve got to figure out where to find it at a reduced rate. More than likely, you’re going to have to start scouring Craigslist, frequent garage sales, and put out a few wanted ads. But, looking is half the fun, right? Once you score your deal, you’ll be salivating to find another.

make a passive income - invest outside of the stock market7) Credit Union Checking Account

Everyone always thinks I’m nuts when I put a checking account on the list of ways to invest outside the stock market, but I’m dead serious! Invest with Lake Michigan Credit Union (or other credit unions that offer similar interest rates) and earn 3% on your money up to $15,000!

How to Get Started:

It’s easy, take a look at this list of credit unions, choose the one that has a great interest rate on checking accounts, and open one! Done!

8) Peer to Peer Lending

Some people have trouble getting loans through banks (or they simply don’t want to give their money to these money-grubbing institutions), so they turn to their peers online and ask for money. This is known as peer-to-peer lending and it’s really gotten quite popular.

With just a website as the medium, regular people that happen to have a few bucks can quickly turn into a master lender and earn 9% or more on their investment (like my friend Joe does on Retireby40). Of course, the repayment of these loans is no guarantee. Your best bet? Invest small amounts across many borrowers to improve your odds of  overall earnings. There are some people that won’t pay back. It happens. That’s why it’s best not to bet your life on just a couple horses.

How to Get Started:

The top peer-to-peer lending sites are:

Just click the links above, select, “Invest” and these easily-navigatable sites will take you the rest of the way!

9) Start Your Own Blog

Ahhhh, my love. I invested $44 to start my site with iPage in 2010. Since then, I have earned well over $100,000 with it. Isn’t that just crazy??

And you know what? If it’s possible for me, it’s possible for you too. You won’t regret it.

Here’s the keys to earning money with a blog:

  • You MUST be passionate about your topic of choice (because it’s going to take a year or more of writing to no one before your grandma eventually navigates her way to your site)
  • People MUST be interested in reading it (you might love writing about obscure poetry from the 1650’s, but if no one wants to read it (and I sure don’t!), it’s not going to make any money.
  • You DO NOT need to be a whiz online. I stumbled my way through designing my blog and I knew absolutely nothing about web-mastery. And now, I’ve created a tutorial that will help you sign up and design your page!
  • Love people and do what’s best for them. Readers will come pouring in, ready to hand you their money.

How to Get Started:

Getting started is easy. Just click my affiliate link here, use the tutorial above, and you’ll have a full-functioning website in under an hour for just $24!!


Web Hosting from iPage

10) Start Your Own Small Business

Want to invest outside of the stock market and finally have some control over your money? Sounds like you’re a future business owner to me.

If you’re passionate about something and love the idea of making money doing it, then why not get started today?

  • You’ll make people happy with your service,
  • you’ll make some money doing what you love, and
  • you might even be able to turn it into a full-time money machine!

Who knows what could happen??

How to Get Started:

First, you’ll need to decide on your business – here’s a few ideas to get your brain moving: 14 Cheap Business Ideas You Can Start Today.

Next, tell your friends, neighbors, and casual acquaintances all about it – every day, all day. You’ll start with them as customers and if they love your work, they’ll gladly recommend you to their friends and colleagues. And THAT’s when your business really starts making money.

11) Precious Metals

Instead of buying into companies and their businesses online, maybe you’re looking to invest outside of the stock market with gold, silver, or some other form of precious metal. Some people do earn money in these spaces, but I’ll have to caution you about the supposed “easy money to be made” here. Nothing is easy. If it was, we’d all be doing it and we’d all be rich,

Precious metals have risk just like any other investment out there. The good news though, is that the value of these assets often increase as the overall market declines. So, if you want to invest outside of the stock market because you think it’s going to tank, then this investment type should really wet your appetite.

How to Get Started:

I’ve done all the research and weighed all the options, and I DO NOT recommend that you go out and buy a bunch of gold and silver coins. This is, in fact, probably the WORST way to invest in precious metals. Instead, I’ve invested some money in a motif (a share of precious metal ownership).

  • It’s easy to buy and sell
  • The value goes up and down with the raw metals
  • You don’t need to rent out a huge safety deposit box for all your gold bars

need to go to college - invest outside of the stock market12) Education

I have spent roughly $50,000 on college education. I figure it has already earned me $70,000 above and beyond what I would have made without it. And in the future, I’ll probably bank another $500,000 as I move up the ranks in Corporate America. So, nearly $600k on a $50,000 investment? That’s a pretty nice return and totally worth it if you ask me!

If you’ve always thought about getting a degree or getting your masters and you believe the payback is worth it, then why not invest in yourself? Heck, this “education” doesn’t even have to be a college degree. Maybe it’s a certification, or maybe you want your guru friend to teach you how he makes $250,000 a year.

If you want to invest outside of the stock market by investing in yourself, I say go for it.

How to Get Started:

Take a look at the 8 college degrees with the best returns on investment if you’re itching to get a degree. Then, simply find the best, reasonably-priced school in your area and sign up for classes!

If instead, you’re looking for certifications, hop online and do some research. What benefit does the certification offer? Will you receive a pay increase once you’ve got it? Will it help you get a better job? Be sure to consider how quickly you’ll get your money back from your investment. If it’s more than 5 years, it’s probably not worth it.

13) Angel Investing/Venture Capitalist

Want to be one of those cool guys on Shark Tank that tells someone their idea is incredible and that you want to be part of it? Well, things in real life don’t always look like they do on TV (in fact, they almost never do).

If you have a load of cash that you’d like to invest in someone (or rather, in their idea/product), there’s thankfully more ways than just being the host of a hit TV series.

How to Get Stared:

There’s a few ways to invest outside of the stock market and in someone’s brilliant idea instead:

  1. Partner with a college or city to hold a contest where the top entrepreneurial idea gets your money and the right to work with you to take it public
  2. Network within your group of professionals to see if anyone comes to you with an idea that’s worth investing in (you can then work with them privately, which is almost always the best case scenario)
  3. Become a member of a venture capitalist community that constantly receives applications from entrepreneurs that are looking for funding to take their idea to the next level. Just do a quick Google search for communities in your area. You might even find a group in your very own city!

how small businesses can prosper - invest outside of the stock market14) Buy a Business

Don’t want to start your own business from scratch? Instead, you’d rather just buy one that’s already flowing smoothly and might just need a few tweaks here and there? If the return on your investment is favorable, then I’d say it makes total sense, especially if you already have the cash!

How to Get Started:

First, you’ll need to decide whether you want a business that produces a product or a service (ie. do they manufacture an item in a factory or does the business require a service to be performed for someone?). Either can be great businesses and provide you with a lot of money, but which one interests you more?

Once you decide your likely business type, you’ll need to start seeking out a seller. You can find businesses via:

  • Craigslist (beware of scams)
  • Word of mouth – let all your friends know you’re interested in buying something (you’d be amazed how often this turns into a promising lead)
  • Talking to business owners – let them know you like their business and would be interested in buying if they ever wanted to sell
  • A local business broker

15) Fix Up Your House

Want to invest outside of the stock market and put a few bucks into your house instead? That’s actually not a bad idea at all, especially if you’re able to find worthwhile upgrades at a reasonable price.

According to U.S. News, some of the top home improvements for the money are:

  • Paint
  • Backsplash
  • Kitchen cabinets
  • Bathroom vanity
  • Granite countertops

This is especially a great idea if you’re looking to sell your house soon. Buy $100 of paint, $100 of back-splash (you can easily do this yourself), and a $300 vanity, and who knows? You could sell your house for $5,000 more than you would have before.

You’d be amazed how big of an impact these fix-ups can have on potential buyers.

How to Get Started:

It’s easy really. Look around your house and ask yourself, “What looks old and outdated?” Second, you need to be honest about the repair – “Will I be able to recoup these costs with the sale of this house?” If your house is worth $50,000 today…then granite counter tops probably make no sense whatsoever. But a nice fresh coat of paint probably does!

Don’t be afraid to DIY. There are tons of great YouTube videos out there that will teach you everything you need to know. By doing the job yourself, you’ll save a ton of money and be able to make a higher profit upon the sale of your house.

save for your child's retirement - invest outside of the stock market16) Online Savings Account

Just a few years ago, interest rates on a savings account was next to nothing. Today, the rates are coming up nicely – both because of the rising interest rates of the Fed and simply because online banks have a lighter overhead load and can afford to pay more.

According to BankRate, the top online saving account rates today are:

  • Popular Direct: 2.0%
  • Salem Five Direct: 1.85%
  • Dollar Savings Direct: 1.80%
  • Virtual Bank: 1.77%
  • Capital One 360: 1.50%

How to Get Started:

Simple. Just click the BankRate link above, choose the savings account that works best for you, and deposit the funds. Done!

17) Art

Are you a lover of art? Are you just dying to buy one of your favorite pieces?

I say have at it.

In 1984, the artist Jean-Michel Basquiat sold one of his paintings, “Untitled” for $19,000. Last year, the painting was sold on auction for $110.5 million….

Whoa.

Obviously, this isn’t going to be the case with every art piece. Some will go up in value, others will go down, and some might absolutely skyrocket! Your best bet is to simply find art that you enjoy and buy it for that reason. If it happens to make you millions, that works too.

How to Get Started:

Almost every city has local art shops. And beyond this, there is probably an art fair that goes on nearby each year. Attend them and check out all they have to offer!

If you’re looking for art that’s already been circulated, look up art auctions in your area. Do your research, know the value of some of the pieces, and then make a bid!

18) Wine

Love your fine wines? Why not collect some? If you know more than the average bear, you could quite easily buy a non-aged wine for $30, hold onto it for a few years, and then sell it for over $100. I’ve heard of people doing this time and time again – it’s no guarantee, but if you know what you’re doing and you’ve got a good network of people that are interested in your aged wines, then this could be a great investment for you!

How to Get Started:

Simple. Buy wine, put it in the basement, then sell it years later for a profit! Hahaha, okay, it might be a bit more complex than that. You probably need to know a little bit about wine before you get started.

  • Find out which wines are in high-demand, and
  • Which wines age well and are better with time

Then, you’ve got to have a game-plan to sell it.

  • Will the local winery buy it?
  • Can you sell it online?
  • Is there a local wine club that would be interested?

Here’s some further inspiration for you and your research: The Top 10 Investment Wines that Returned 150% Over Five Years

debt snowball tool  invest outside of the stock market19) Pay Off Debt

My personal favorite!

Want to invest outside of the stock market because you’d rather chunk your money at your debt? I say absolutely!!

I mean really, if you have debt and are paying 10% in interest payments, does it really make any sense to invest?

Not at all.

My vote is that people pay off their car loans, student loans, and credit cards before investing a dime anywhere else.

How to Get Started:

It sounds easy – just pay off your debt – but it is hard work that could take years of constant battling…setbacks along with victories. It really can be a rollercoaster, and choosing to stay on the ride for years is a challenge for most.

I recommend first saving up $1,000 in a mini-emergency fund. After you do that, take a look at my popular article, “How the Debt Snowball Really Works” and fill out the Excel sheet to figure out how quickly you could get out of debt!

20) Land

There’s an abundance of companies out there to invest in, but you know what there’s less and less of all the time?

Land.

If you’d like to invest outside of the stock market and would rather sink some money into land, it’s probably not a bad idea at all – especially if you can figure out how to profit from it while you own it (ie. rent it to a farmer, start your own pumpkin patch, etc.)!

How to Get Started:

Start by looking at properties on Zillow to get a sense for how much it costs for a few acres of land in your area. After a few months of looking online (and gaining an understanding of the market), start to visit a few of these farms. Ask around to see if any nearby farmers would be interested in renting the land for their crop (or anything else they’d like to use it for). It could be that you have your investment covering its own costs before you even buy it!

Get a local realtor to help you out too. It won’t cost you anything, and their knowledge of real estate will be completely invaluable to your search.

flip a houseBonus Suggestion – Flip Houses

My sister and brother-in-law would shoot me if I didn’t make one more suggestion – buying and flipping houses. It’s certainly not passive income, but there’s definitely money to be made here. So far, they’ve flipped around six houses and have likely cleared $125,000 in profits (my estimate…and it’s probably low).

If you’re handy and aren’t put off by cat pee and nicotine stains, the fix and flip model might work out pretty well for you.

How to Get Started:

Find the quality real estate areas in your neighborhood, seek out a run-down one that’s in need of some lovin’, and do your best to get it for below-market price (a cash offer helps tremendously). Then, fix it up (watch out, this could take months and months if you’re not careful…), list it with a quality realtor, and sell it for a five-figure profit!

Want more? Check out this post that explains everything you need to know about flipping houses: “How to Flip a House: From the Search to Sold!

How to Invest Outside of the Stock Market

Well there you have it! For those of you that are getting a little shy about having your entire nest egg in one basket (the stock market), there’s another 20+ investment ideas that can earn you a pretty penny as well!

So what about you? How will you invest outside of the stock market? Tell me in the comments below – especially if it’s not listed above!!

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