If the volatility of the stock market makes you too nervous to invest, that’s okay! There are multiple ways to invest your money and build wealth outside the stock market. Many know that diversity is important when it comes to investing in the stock market. That same philosophy applies to finding stock market alternatives that will help increase your net worth.
Some of these alternatives to investing in the stock market are nontraditional. Others, like real estate investing, are quite common. Whether or not the investment ideas below will work for you will depend on a few things:
- Your risk tolerance
- Your skill level
- The amount of money you have to invest
All of the opportunities below are legitimate ways to build wealth outside the stock market to diversify your investments and make you less dependent on the market’s wild swings.
1. PURCHASING REAL ESTATE
There are a number of ways to invest in real estate. For instance, you can purchase single family homes and rent them out. You can purchase apartment complexes or commercial property. You can even invest in real estate through crowdfunding sites.
Investing in real estate is one of the best ways to build wealth outside the stock market. Unfortunately, lack of funds can be a high barrier to entry for many individuals wanting to invest in real estate. The rise of crowdfunding sites has lowered that barrier, giving more people access to real estate investing options.
Fundrise is one example of a real estate crowdfunding site. You can start investing for as little as $500 with Fundrise and you can invest in residential or commercial properties. Fundrise also allows you to invest money in either a retirement or non-retirement account so you can better match investments to your goals and needs.
It’s important to note that real estate is a risky investment. However, there are ways to insulate yourself from potential market fluctuations, like paying for your rentals in cash.
Some people who invest in real estate decide to manage their properties themselves. Others outsource to a property management company. Outsourcing prevents them from getting calls in the middle of the night about a broken dishwasher.
If you can mitigate the need for your personal involvement, investing in real estate is one of the best residual income ideas as it allows you to earn income with little effort.