Many people understand the importance of contributing to retirement accounts like an IRA, 401K, or Index Universal Life Policy. Most will also become interested in setting up investment portfolios. The good news is that there is no shortage of alternative investing opportunities you can pursue that don't involve the stock market at all.

Here are a few options to consider:

  1. Real estate

For most people, their home is the single greatest personal asset, and most of us anticipate being able to sell for a profit down the line. But consider looking into the possibility of purchasing rental properties, especially with the boom in vacation rentals like Airbnb or VRBO. Commercial properties are another option to consider, and a great way to earn passive income, while growing equity for return on property investments.


  1. Private equity

This might strike you as being very similar to investing in stocks, because the easiest route is to place your money with a private equity firm that invests on your behalf, but it is actually a very different beast. Many private companies that aren’t listed on the stock market seek investment capital, and promise solid returns.


The average person doesn’t necessarily have the resources to locate promising companies or undertake the vetting process to ensure a sound investment on the stock exchange. However, a private equity firm will do this for you, for a fee. If a private company you’re invested in is acquired or decides to IPO and go public, your investment funds will be returned. If you choose a reputable private equity firm and set the risk level you’re comfortable with over the long haul, this is an intelligent alternative to investing in the stock market.


  1. Direct investment in business

If you want to take a more active role in your investments, options like private equity and venture capital may not suit you. In this case, you may be more interested in directly investing in startups or established businesses. You can find ways to invest with startups or existing companies through Angel Investment Firms.


There are two major catches. Generally speaking, Angel Investors must be willing to fork over $1 million plus to become an accredited investor and get in the game. In addition, that money is likely to be tied up for a decade on average, before you see returns. This is a high-risk investment strategy, because so many startups fail, but it could also deliver untold rewards if the venture is successful.

Image: CNN Money for the S&P 500
  1. Self-directed IRA

When most people invest in IRAs, the goal is to create a supplementary retirement account that offers tax deferment (or other tax benefits), along with higher-than-average returns thanks to compound interest. However, you are reliant on a management team to direct investments on your behalf. With a self-directed IRA, you have the opportunity to decide how your money is invested. You could, for example, choose to invest in real estate, or notes, while still enjoying the benefits associated with the IRA structure.


Some people choose to use IRA funds for the purposes of direct investment, often in a family-owned business. However, there are very specific guidelines for your self-directed IRA investments, so look into these carefully.


  1. Tangible assets

Gold. Silver. Diamonds. Art. Wine. Baseball cards. Stamps … A collector’s vault or an investment opportunity? Tangible assets are just another form of investment. The intrinsic value of gold, diamonds, silver, titanium, and other fine commodities have been demonstrated through time. While the value of collectibles like sports memorabilia may shift, you can generally expect them to retain some value, as long as they are kept in good condition.



  1. Annuities

An annuity is an award or settlement of some type that pays the holder a fixed sum annually for a set time period, often throughout the lifetime of the beneficiary. Winning the lottery could result in annuity payments, as could being awarded a settlement in an accident or injury lawsuit.


Investing in annuities can occur when those who are entitled to annuities prefer to receive a lump sum now rather than receiving fixed payments over many years. They transfer their annuity payments to an annuity firm, in exchange for a lump sum that is less than what they would have received over the long run. Those who invest in annuities receive annual returns, and all funds receive tax-deferred status until they are withdrawn.


This type of investing is a long game, which makes it ideal for younger adults saving for retirement, because a return is guaranteed. However, it can also involve high penalties for early withdrawal, so it’s best to understand all the terms before making a commitment.