13 Alternative Investments Beyond Stocks: Build Wealth With Something to Invest in to Make Money

Mention investing and most people immediately envision the stock exchange. However, building a robust financial future doesn’t require putting all your eggs in the equities basket. Strategic diversification using investments with low or negative correlation to market movements is a proven wealth-building approach. Whether you’re skeptical about Wall Street or simply want to spread your risk across uncorrelated assets, here’s a comprehensive guide to alternative investment vehicles that generate returns without traditional stock exposure.

These options span the risk spectrum—from highly conservative to extremely volatile—so thorough due diligence is essential before committing capital.

Lower-Risk Options: Building Stable Income Streams

Savings Bonds and Certificates of Deposit

Federal government-backed savings bonds represent one of the safest parking spots for your capital. Available in Series EE (fixed rate) and Series I (inflation-adjusted) versions, these instruments guarantee returns backed by the full faith and credit of the U.S. government. The downside? Returns typically lag long-term stock market performance, but your principal is virtually bulletproof.

Bank-issued certificates of deposit operate similarly, offering fixed interest rates for predetermined timeframes with FDIC insurance protection. Early withdrawal penalties apply if you need liquidity before maturity, but this tradeoff ensures predictable, government-guaranteed returns that make something to invest in to make money without market stress.

Corporate and Municipal Bonds

When corporations need capital, they issue bonds—investment contracts that pay periodic interest and return your principal at maturity. Unlike equities, bondholding provides no ownership stake, meaning you won’t benefit from exceptional company performance. However, you’re also shielded from downside risk if the business underperforms. Interest rates reflect borrowing risk; riskier issuers offer higher yields but greater default potential.

Municipal bonds carry similar mechanics but originate from city and state governments funding infrastructure projects. The attraction? Interest income is typically exempt from federal taxes and potentially state/local taxes, making after-tax returns competitive despite lower nominal rates.

Real Estate: Tangible Assets Without the Landlord Headaches

Real Estate Investment Trusts

Real estate investment trusts (REITs) democratize property investing. Instead of requiring millions for direct ownership, REIT shares let retail investors gain exposure to diversified real estate portfolios including residential, commercial, hospitality and industrial properties. REITs distribute rental income to shareholders quarterly, providing passive cash flow without management burdens or extensive market research.

Vacation Rental Properties

For those seeking tangible ownership with income generation, vacation rental homes offer dual benefits. Use the property for personal getaways while renting it out during off-periods to cover expenses—potentially building equity as real estate appreciates. Vacation rental platforms streamline management, though properties lack liquidity. Unexpected capital needs might force delayed sales.

Income-Generating Alternatives

Peer-to-Peer Lending

Digital lending platforms connect borrowers directly with investors. Contribute as little as $25 to fund portions of personal or small business loans, earning interest as borrowers repay. Default risk exists—if a borrower stops paying, that note’s value evaporates. Risk mitigation comes through portfolio diversification; investing $100 across 100 notes means several borrower defaults won’t necessarily eliminate gains.

Private Equity and Venture Capital

Private equity funds pool investor capital for professional managers to deploy in mature private companies, targeting growth and eventual exits. Venture capital follows similar logic but targets early-stage startups. These vehicles potentially deliver outsized returns but carry substantial risk, high management fees, and extended lock-up periods (often 5-10 years). Direct participation typically requires accredited investor status (net worth/income thresholds).

Higher-Risk Speculative Plays

Gold and Precious Metals

Gold serves multiple portfolio roles—inflation hedge, crisis insurance, and speculative vehicle. Investment methods include bullion, coins, mining company stocks, futures contracts, or metal-focused mutual funds. Direct bullion/coin ownership requires secure storage (safe deposit boxes, vaults). The FTC warns gold prices fluctuate significantly; verify dealer reputation before purchasing, especially if storing gold with third parties.

Commodities Futures

Contracts for future commodity delivery—corn, crude oil, copper, etc.—let you speculate on supply-demand dynamics. As underlying commodity prices swing, contract values soar or plummet accordingly. Potential profits are substantial but so are losses. Commodities provide inflation hedging but demand expertise navigating competitive, complex markets.

Cryptocurrencies

Digital, decentralized currencies like Bitcoin represent the frontier of alternative investing. Crypto volatility is legendary; price swings test even experienced investors’ nerves. Bitcoin remains the most recognized cryptocurrency, but alternatives abound. This investment vehicle suits only those comfortable with extreme price fluctuations or possessing genuine conviction about blockchain technology’s future.

Specialized Instruments

Annuities

Insurance company contracts where you pay upfront capital in exchange for guaranteed periodic payments—either for fixed terms or lifetime. Three varieties exist: fixed (predictable payments), variable (payments tied to investment performance), and indexed (linked to market indices). Tax-deferred growth on earnings is attractive, but high fees and broker commissions can significantly erode returns. Research thoroughly before committing.

Building Your Alternative Investment Strategy

The core principle remains: diversification across uncorrelated assets reduces portfolio volatility and provides something to invest in to make money through multiple channels simultaneously. Start with lower-risk foundations (bonds, REITs, CDs) before gradually introducing higher-volatility positions (commodities, crypto, private equity). Your risk tolerance, timeline, and capital determine the optimal mix.

The investment landscape extends far beyond traditional equities. By thoughtfully combining alternative vehicles, you construct a resilient portfolio capable of generating returns through multiple economic environments while reducing dependence on stock market performance.