Love My Credit Union Rewards Love My Credit Union Rewards Go to main content
Not a Credit union member?
Find one near you:
Join a Credit Union

Ways to Invest Besides the Stock Market

When they hear the word “investing,” many people automatically think of the stock market. It’s true that’s where a lot of high-risk, high-reward investing happens, but there are other ways to put your money to work. And while they may not make the big promises of the stock market, they may offer less risk, pay out in a bear market mark (i.e. prices are falling), and/or hold value better in the long-term.

Paying down debt

Yes, we started with the least exciting but also the safest alternative investment. If you pay off a debt—say a credit card—that charges 14% interest, that’s the equivalent of earning a 14% rate of return on the same amount of money if it were invested in another asset. In fact, it’s even a bit better because the return of not spending money on interest doesn’t incur income tax. All in all, paying off debt delivers superior returns to most other investments, doesn’t cost you in taxes, is guaranteed, and is risk-free.

Precious metals

Buying precious metals like gold or silver bullion (coins, bars, or other physical form) is a way to keep your investment as a liquid asset (i.e. it can easily be turned into cash when you need it). Precious metals are a unique investment in that they gain value when the dollar is weak and lose value when the dollar is strong. Metals allow you to take physical possession of your investment and keep it at home or some other safe place. For those who want to protect against worst-case-scenarios for the domestic or global market, precious metals promise to be an easy way to trade for goods.

For these reasons, precious metals are a good “rescue asset”—they hold a value that’s easily converted for use whenever you need it.

Real estate

Real estate as an investment that can earn you large returns and a consistent passive income, but it can also require a larger up-front cash investment and lots of hands-on time.

Why real estate is a desirable investment:

  • It’s a physical commodity that has value in and of itself.
  • There’s a (usually) consistent widespread demand for it.
  • It can produce income either through rents, capital appreciation, or both.
  • It’s a tax favored investment with generous depreciation write-offs, as well as favorable capital gains treatment if held for more than one year.

Ways to invest in real estate:

  • Buying property directly. You purchase a piece of property with a down payment and a mortgage with the goal to either produce rent income, to earn capital appreciation upon eventual sale, or to renovate and flip for a quick profit.
  • Real estate limited partnerships. You invest money in a real estate partnership that typically invests in commercial property. You are a limited partner, so you can’t lose more than the amount of money you’ve invested. Tax advantages primarily concern depreciation.
  • Real estate investment trusts (REITs). Think of these as real estate mutual funds that invest in real estate or real estate mortgages. You buy shares in the REIT, then collect income through dividends and/or capital appreciation. This option limits your risk and time investment.

Before you consider buying property, ask yourself if you have the time to be a landlord, or if you can afford to hire a trustworthy property manager.

Share certificate laddering

Share certificates are a type of savings tool that offer higher returns than savings accounts, money-market accounts, and interest-bearing checking accounts but at the cost of locking away your money for anywhere from three months to ten years, with a penalty for withdrawing money early. The longer the certificate’s term and the larger the deposit, the higher the interest rate.

But there is a way to take advantage of a share certificate’s higher annual percentage yield (APY) and still maintain access to your cash. Say hello to laddering.

Certificate laddering is a method of setting up multiple certificates that mature at staggered intervals, allowing you to access part of your savings on a regular basis while keeping the rest in high-yield, longer-term certificates. When a share certificate matures, you have the choice to reinvest in another certificate or use it for another investment or an expense.

For example, let’s say you have $15,000 in savings. You could keep $5,000 in a traditional savings account for easy access and invest the remaining $10,000 in five tranches—five certificates of $2,000 each with five different maturity terms: a five-year, a four-year, a three-year, a two-year, and a one-year.

When the one-year certificate matures, you can reinvest it as a five-year certificate, repeating the process so that within five years, all of the certificates will be invested at five-year terms (and the higher interest rate), but one will still be maturing each year, giving you the opportunity to withdraw the money without paying a penalty. You can also add to the certificate when it matures, and you can always create more tranches, perhaps having one mature every six months but still at the five-year term rate. There is a lot of flexibility when it comes to building a ladder.

Being a silent partner in a small business

You can invest in a promising small business (based on thorough research, of course) by providing much-needed capital to the business owner in exchange for a position as a silent owner, which entitles you to percentage ownership in the business and its income stream.

Your equity stake can pay off very well indeed if the business is ever sold or if it continues to expand.


The simplest, lowest-risk, and usually most profitable investment you can make is in yourself—specifically in your income earning ability.

Some ways you can invest in yourself:

  • Earn a professional certificate or designation that will ultimately result in a promotion or increased salary.
  • Go back to school to earn a marketable degree.
  • Take on responsibilities at work to increase your value as an employee.
  • Work with a career/personal coach.
  • Learn more about investing to improve your investment returns.
Go to main navigation