Where to Put Your Money: A Complete Guide to Non-Stock Investments

Most investors instinctively turn to stocks first, but that’s only one piece of the puzzle. If you’re wondering where to invest money beyond the traditional stock market, you’re on the right track. Diversification into non-correlated or negatively correlated assets is a proven strategy to balance risk and build wealth steadily. Here’s a breakdown of 13 alternative investment vehicles—from fortress-like safety to thrilling volatility.

Low-Risk Options: The Conservative Investor’s Playground

Government-Backed Securities

Savings bonds issued by the federal government offer predictable returns with minimal downside. You can choose Series EE bonds with fixed rates or Series I bonds that adjust with inflation. The beauty here? Your money is backed by the full faith and credit of the U.S. government, so losses are virtually impossible unless the government itself defaults.

Certificates of Deposit (CDs)

Banks offer CDs as fixed-income instruments with FDIC protection up to $250,000. You lock in a guaranteed interest rate for a set period, and the tradeoff is early withdrawal penalties. While returns won’t match the stock market over 30 years, the certainty is unmatched for risk-averse investors.

Corporate Bonds

When companies need capital, they issue bonds that anyone can purchase. You receive regular interest payments and get your principal back at maturity. Risk varies by issuer strength—higher default risk means higher yields. Unlike stocks, bond holders aren’t affected by the company’s profitability swings, making returns more predictable.

Moderate-Risk Alternatives: Diversify Your Portfolio

Real Estate Investment Trusts (REITs)

Don’t have millions to buy property outright? REITs are the answer. These trusts invest in housing, commercial real estate, hotels, and warehouses, then distribute rental income to shareholders. It’s where to invest money if you want real estate exposure without the headache of property management or substantial capital requirements.

Peer-to-Peer Lending

Platforms like Prosper and Lending Club connect individual investors with borrowers. You can start with just $25 and spread your capital across dozens of loans. When borrowers repay with interest, you earn returns. The risk is borrower default, but diversification across 100 notes versus one dramatically reduces that exposure.

Municipal Bonds

Cities and states issue bonds for infrastructure and education projects. The killer advantage? Interest income is exempt from federal taxes—and often state and local taxes too. Your after-tax return frequently exceeds corporate bonds despite lower stated yields, making them smart where to invest money for tax-efficient income.

Gold and Precious Metals

Gold serves as an inflation hedge and portfolio insurance. You can own bullion, coins, mining stocks, futures contracts, or gold-focused mutual funds. Price volatility is real, so store physical gold securely. The FTC warns to vet dealers carefully before purchase.

Higher-Risk, Higher-Reward Investments

Commodities Futures

Contracts on agricultural goods, metals, and energy commodities can generate outsized profits—or losses. Supply and demand shifts directly impact contract values. This is a complicated market with institutional players, so retail investors should tread carefully or avoid entirely.

Vacation Rentals

A second property rented out when you’re away serves double duty: personal enjoyment and investment income. Platforms have simplified management, but liquidity is low. If you need emergency cash, finding a buyer takes time, so this suits long-term holders only.

Cryptocurrencies

Digital currencies like Bitcoin (currently trading near $88.91K, up 1.25% in 24 hours) operate independently of government systems. Crypto is non-correlated to stocks, but the volatility is stomach-churning. This belongs in your portfolio only if you understand the technology and can stomach 50% swings. It’s a speculative position, not a core holding.

Private Equity and Venture Capital

These funds pool investor money under professional managers who buy stakes in private companies or startups. Returns can be exceptional, but management fees are steep, capital gets locked up for years, and minimum investment thresholds are high. Direct access is typically restricted to accredited investors with substantial net worth.

Annuities

You pay a lump sum to an insurance company in exchange for guaranteed payments over time or for life. Fixed annuities provide stability; variable and indexed versions tie returns to market performance. The downsides: high fees, significant broker commissions, and tax deferral benefits that don’t always justify the costs.

Building Your Strategy

The question of where to invest money depends entirely on your risk tolerance, time horizon, and financial goals. Conservative investors might combine CDs, government bonds, and REITs. Moderate portfolios could add peer-to-peer lending and gold. Aggressive investors might allocate to crypto, commodities, and private equity.

Start with thorough research. Each investment class carries unique risks and opportunities. Diversify across multiple alternatives rather than concentrating in one category. And remember: the best investment is the one you fully understand before committing your capital.