When you think of investing, what’s the first thing that pops into your mind? Probably investing in the stock market. Most people think of buying stocks when they hear the term “investing.” Stocks aren’t the only option out there, though.
If you don’t want to play the stock market or are overwhelmed by the whole process, you can still invest and build your wealth. Keep reading for some alternative investment ideas that can help you achieve your financial goals.
7 Alternative Investment Ideas
Investing in stock can earn you around a 7% return on your investment. However, stocks are very volatile and susceptible to great highs and great lows. If you can weather the storm and are in it for the long haul, stocks may make sense for you.
On the other hand, you want something more short-term or less volatile, stocks are likely not right for you. If you have money to invest but are hesitant about the stock market, consider one or more of these alternative ideas.
#1. Peer-to-Peer Lending
Peer-to-peer lending is a type of investment that removes the middleman (i.e., the bank) and brings investors and borrowers together. There are a number of different peer-to-peer lending sites out there.
They typically allow you to diversify your investments and invest in a number of different borrowers. This means that your risk is lowered and your rate of return can be in the double digits. You don’t need a ton of money to get started, so this is a great option for new investors testing the waters.
#2. Treasury Securities
Treasury securities don’t usually bring a high-interest rate because they are so stable, but they can be a safe investment. Learn more about the different options, as they have different interest rates and different maturity terms. Pick something that works with your investment and financial needs.
There are four different types of treasure securities you can buy: bills, notes, bonds, and Treasury inflation-protected securities. Bonds typically have the highest interest rate and you can start investing with as little as $100. You can purchase them online.
#3. Real Estate
Real estate is almost always a good investment. It can weather the ups and downs of the financial market and gives you something tangible for your money. If you have the fund to purchase an investment property, you can make passive income by collecting rent each month.
If you don’t want the responsibility of having an actual property to care for but still want to invest in real estate, a real estate investment trust (REIT) is an option. Basically, these work like a real estate mutual fund. You buy shares in a REIT, which could have shares in many different properties, and make income through the dividends.
This is a low-risk investment and allows you to invest in property without all of the upkeep and responsibility.
#4. Precious Metals
Investing in precious metals, like gold and silver, is controversial. Some people think they are a great investment while others think that the market is too speculative. The problem is that we can’t count on the price of precious metals to rise when the market rises.
Typically, precious metals gain in value when the dollar is weak. It’s hard to know when these shifts will occur, so you are taking a risk. The big benefit, though, is that precious metals are tangible assets.
#5. High-Yield Savings Account or CDs
When the stock market is highly volatile, a certificate of deposit, or CD, is a great place to invest. They are held by banks and insured by the FDIC, so you can be assured that you won’t lose your money.
They don’t have great rates of return and neither do high-yield savings accounts, but they are safe and stable. High yield savings accounts also have the benefit of making your money liquid, so you can access it when you need it.
#6. Forex Trading
The Foreign Exchange Market (Forex) is the largest global financial market. It is typically a short-term market, which is different from the stock market. Most stocks are bought and sold in 24 hours and everything is much quicker than the stock market.
It’s important to do your research and get some trading education before you jump in though.
#7. Equity Crowdfunding
Equity crowdfunding allows investors to invest in startups and small businesses. In return, they get ownership of a small percentage of the business. When the business succeeds, the value goes up and the investor earns money. If the business does not succeed, the investor loses money.
There are some cautions with this type of investing, however, as many startups are reluctant to offer equity in their business to small investors. Many small-time investors could be putting their money at risk as well since they don’t know a lot about the businesses or start-ups they are investing in.
Equity crowdfunding only became legal in the U.S. in the past few years, so invest with caution!
The Bottom Line
If you want to invest but don’t want to navigate the stock market, don’t fear. There are plenty of alternative investment ideas available to you. Some risky, some less risky, depending on what you want and how much money you have to invest.
If you want even more ideas for how to make money, particularly online, check out some of our other blog posts. We have information on everything from start-ups to blogging to SEO marketing. If you’re interested in boosting your income, we have something for you.