Skip to content

What is a Stock Alternative? (And What Are The Top Stock Alternatives?)

If you’re currently saying, “I don’t want to invest in the stock market right now” and it makes you uncomfortable, you may want to look into a stock alternative. There are many ways of investing outside of the stock market. And you know what? They may even be less risky, and they might earn more money!

Want to know more? If you’re asking questions like…

  • What’s the meaning of a stock alternative?
  • And, how much should you invest in alternatives?

Then read on!

Related: The Market’s Slide in 2022 Has Already Changed Investor Behavior

What is a Stock Alternative? There are more options than you think!Stock Alternative Meaning

If you’re wondering, “What can I do instead of investing in stocks?” then you’re likely interested in stock alternatives.

You probably have an idea what a stock alternative is, but what is the official definition? Are we on the same page here?

What is a stock alternative?

A stock alternative is simple an investment that’s not in the stock market. 

  • An investment in Apple stock? That’s a stock investment.
  • An investment in a classic painting? That’s a stock alternative. 🙂

Historical Reasons Not to Invest in the Stock Market

The stock market is often wildly volatile. In a single day, you could lose 3-4% in the stock market, even if you’re heavily diversified! And, over a longer period of time, the stock market could plunge 30% or more. And often, it’s due to something fairly fickle like an over-investment in tech stocks, people taking on too much debt for housing, or as of late, an emerging new virus.

  • Dot-Com Bubble – The Nasdaq index peaked on March 10, 2000. From then to October 4, 2002, the market plummeted by 76.81%.
  • Housing Bubble – The Dow index peaked on October 9, 2007 at $14,164. Then the sub-prime lending market took its toll on the world. Just a year and a half later, the Dow index lost 54% of its value.
  • Coronavirus Scare –  As COVID-19 spread across the world, the stock market tumbled out of fear for what would happen next. In just 2 weeks, most stocks fell by more than 30%.

If you had started investing in February of 2000 or September of 2007, I don’t blame you for being scared to invest in the stock market. I’d probably be looking into a stock alternative too!

Related: What to Do With Your Money in a Recession (The 2022 Recession Is On!!)

Can You Risk Not Investing in the Stock Market?

But….should you be looking into stock alternatives?

According to Nerdwallet, the stock market has earned an average return of 10% over the last 100 years.

What does this really mean?

If you would have invested $100,000 by age 30 and just let the money sit there, guess how much it would turn into by the time you turned 70?

Your $100k would turn into…..over $5 million!! Just by sitting there and earning interest!

That’s a pretty dang good return for doing nothing!

If you don’t invest in the stock market, you may be missing on these returns in the future. 

But…could you earn more if you investing outside of the stock market?…

Related: The Worst Time to Buy a House…Is It Now??

What Is Better Than Stocks?

So what is better than stocks? Can anything else turn $100k into $5 million in 40 years’ time? 

Yeah, potentially!

Here’s a great example, and one that you might not immediately think of. 

investing in collegeWhat is better than stocks? Perhaps a degree.

Let’s say that you’re 30 years old and work in a factory earning $30,000 a year. 

Unless you do something different, you’ll be earning $30k per year for the rest of your working years.

If you worked from 30 until 70, you’d have 40 years of earning $30k a year, which equates to a total of $1,200,000.

Sounds big, but you probably wouldn’t be able to save a single cent of that money. At age 70, you’d have no money.

What if instead, you decided to go back to school to become a commercial pilot?

Did you know that commercial pilots earn upwards of $200,000 a year?

What if you put in the hours, learned how to be a pilot, and start a new commercial pilot career at age 35?

What’s your new lifetime earnings now?

It’s not $1.2M…it’s over $7.2 million!!

Whoa. So that career change…that investment in time and money…it earned you 6 million more dollars in your life!

If you never invested a cent in the stock market, you’d still be juuuuust fine. 🙂

Related: Do You Need a Degree to Be an Entrepreneur? (No…But Maybe Yes…)

How Do I Get Rich Without Stocks?

We already mentioned one potential move to get rich without stocks. Make a career move and become a pilot! 

Seems strange, but if you’ve always wanted to become a pilot AND you’re nervous about investing in the stock market, then it couldn’t make any more sense!

So what other options are out there? How can you become rich without stocks?

Related: Webull vs Robinhood : 2022 Comparison (Which one is better??)

What to do with 1 million dollars? Start a business!What can I do instead of investing in stocks?

You can skip ahead a few sections and read about the 8 alternatives to investing in the stock market (I give you permission). But, you may want to stay here and read about the BEST way I know how to make money outside of the stock market.

For me, I’d beat the stock market with my own business venture.

If you have an idea and you feel it has a decent chance of success, then why not go for it? 

Starting a business can be super lucrative. Sure, you’ll likely put in a ton of hours to get it started, but in the end, you’ve got an income, and you’ve got a potentially monstrous asset that you can sell and retire on. 

What type of business could beat the stock market?

You may be asking, “What type of business could I start that would earn returns that are greater than 10% returns?”

Honestly, it could be anything. It could be something as simple as:

  • cleaning gutters
  • mowing lawns
  • writing articles for blogs
  • detailing cars

Or, maybe you’ve got some specialized skills. Maybe you could start a business in:

  • fixing cars
  • starting websites
  • developing apps
  • consulting

The possibilities are endless!

Related: How to Retire in 10 Years With a Million (It’s Possible!!)

How Do I Invest In Alternative Investments?

Let’s say you’ve got an idea for investing in alternative investments. How do you get started?

If your alternative investments are things, then the solution is simple. Buy them!

  • Buy that collectible car
  • Purchase that original piece of art
  • And take that case of expensive wine home with you

For sure you should find a deal before buying, but after the search, the next steps are pretty basic. Buy them, take care of them, and sell them way later at their peak value.

Business Plan for starting an online businessIf you’re investing in an idea or a business, then the next steps become a bit more complex.

  • Put your ideas on paper
  • Sketch out a business plan
    • What might this idea earn per year?
    • What would it take to develop it?
    • Will it require a lot of money up-front?
    • What will the profits be per year?
    • And finally, what happens if it doesn’t work? What’s the backup plan?
  • Test out the idea (start on a super small scale to see what the response is)
  • Get your funds together
  • If all goes well, start growing it and potentially take it full-time!

Related: How to Short Tesla Stock (…And Should You??)

How Much to Invest in Alternatives

Should you put your entire investments into stock alternates? 

You can, just as long as you diversify your investments! In other words, please don’t just start a business and depend on that to grow and take care of you in retirement. That’s not a good plan.

Invest in a wide variety of things!

  • the stock market
  • your education
  • a business venture
  • and then any one of the below stock alternatives!

How much do I personally invest in alternatives?

For me, I’m pretty boring. I believe in the U.S. stock market.

  • Our 401k is invested 70% in the S&P 500, 30% into International funds 
  • I’m currently buying the dip and putting extra money into my S&P 500 investments each week
  • Beyond this, we own a single family rental property
  • And, I own this website, which is actually worth quite the pretty penny these days!

Related: Can You Retire With 1.5 Million Dollars? (Hint: You Can!!)

8 Top Stock Alternatives Today

When looking for investments, many people would gravitate toward stocks or bonds because they’re more common and well-known. However, there are other ways to invest your money. In fact, there are quite a number of ways to start investing outside of the stock market.

Interested in the best alternatives to the stock market? Here are some great stock alternatives that might make sense for you right now.

Invest in bitcoin now or wait1) Cryptocurrency

One of the alternatives to investing in stocks is cryptocurrency. It uses blockchain technology to allow sellers and buyers to transact business directly without hiring a middleman.  

Although its functional uses are still emerging, the values of digital currencies, such as Bitcoin and Ethereum, are increasing dramatically. The good thing about cryptocurrency is that it’s simple to acquire using a reliable crypto exchange platform, allowing you to buy and sell digital currencies.

To learn more about crypto, you could browse this site. Once you learn all about crypto and you’re comfortable with investing your money there for the long-term, then you can pull the trigger. Certainly don’t invest ALL your money here, but would I invest 5%? Sure!

Related: How to Invest in Cryptocurrency (…And Should You??)

2) Crowdfunded Real Estate

Another alternative to investing in stocks is crowdfunded real estate.

Some non-stock market investments allow you to watch your investments grow. It has low entry barriers, making them an ideal opportunity for investors who are just getting started in investing. You may find several crowdfunded real estate opportunities that require a few hundred dollars minimum investment.  

Real estate crowdfunding involves groups of investors who raise capital for single real estate projects. The cash infusion enables investors without huge capital to flip a home, renovate rental properties, and buy commercial office buildings.  

Related: How to Invest 200k (…And Become a Millionaire Fast!!)

selling gold online to make money3) Gold

The other alternative to investing in stocks is gold.

There are various ways to invest in gold, including…

  • gold futures contracts,
  • gold coins,
  • and gold bullion,
  • and even mutual funds.

If you want to buy coins or bullion directly, ensure a safe area to store your investment. However, before you invest your hard-earned cash in gold, remember that gold prices may also go up and down. By researching more about gold investment, you’ll know the things you should or not do to maximize your profits.  

Related: What Do The Rich Invest In? (That The Poor Do Not!!)

4) Peer-to-Peer Lending

Regardless of your investment goals, peer-to-peer lending is a decent stock investment alternative.

Also referred to as P2P lending, online P2P services provide loans for personal use, businesses, and anything you can imagine. Once you join the pool of investors who can loan money to others, you can fund the loan when the borrower qualifies.

How Peer-to-Peer Lending Works

Typically, your money is pooled with some investors’ money, and together you make loads to people asking for funds. Then, you’ll receive fixed repayments every month that include the interest you owe. The good thing about P2P lending is getting higher returns than standard savings vehicles.

The primary risk with P2P lending is that you’re loaning to individuals who might not be able to get loans from banks or can’t go through the traditional loan outlets. However, there’s not a ton to worry about here as you can decide the credit rating and some factors to consider for borrowers. You may also have the choice of whether or not to fund borrowers.  

5) Real Estate Investment Trusts (REITs)

If you’re interested in real estate properties but don’t have enough money or time to research the process of buying a property, you can opt for REITs.

These will allow you to invest in housing, warehouses, hotels, and commercial buildings and distribute the rental fees to the owners. So, if you don’t want to buy properties but are interested in real estate investing, REITs are an excellent addition to your investment portfolio.  

Related: What to Do With 10k (These Moves Could DOUBLE Your Money!)

Real Estate Broker - top jobs that pay 50k a year without a degree6) Rental Property Investing

If you’re wondering how to make money grow without investing in stocks, you can consider investing in rental properties.

Due to the increasing demand for properties, home prices continue to increase. It means you have the potential to earn more returns over time.

However, it’s only possible if you find a reliable tenant for your rental property. So, whether you plan to rent out your property as a vacation rental or hire somebody to manage the property, focus on finding trustworthy tenants to enjoy the perks of rental property investing.  

Related: How to Buy Your First Rental Property (And Start Your Future Empire!!)

7) Own A Business

I mentioned this stock alternative earlier in this post. It’s obviously one of my favorites.

If you don’t want to invest in stocks or any of the above choices, you can invest in your own business instead. Although it may cost you more, running a business may produce the highest possible returns as it grows over time.

Depending on your budget, you can start with a small business or startup.

For example, you can create an online shop or offer online services like consulting and coaching.

If you have a full-time job, you can establish a part-time business that you can open during the weekends or evenings. This way, you don’t need to give up your regular job while making extra money with your business.  

Related: How to Start a Blog – The Step by Step Process!!

8) Commodities

Aside from gold, commodities such as aluminum, copper, or grains can be an excellent investment alternative.

Unlike some asset classes, they can be used to lessen the market risk because they have a low correlation with stocks.  

In addition, commodities are accessible to every investor, unlike some alternative investments that might require accreditation. You may quickly trade agriculture and energy securities in the futures market.  

Related: How to Invest in VOO (And What Is It Really??)

Choosing a Stock Alternative: What Will You Invest In?

All those ideas we explored above… those are some of the many alternatives to investing in stocks.

While they are great options for your investment portfolio, do your research and take your time before you start investing. This way, you’ll know what can help you achieve your long-term goals.

What’s your favorite stock alternative? Tell us in the comments below!



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

Related posts