Michael Keenan

Mon, Jun 2, 2025, 9:03 AM7 min read

When people think of investing, they usually start by looking at the stock market. But there are lots of other ways to invest your savings than just stocks, mutual funds or exchange-traded funds. In fact, diversifying your portfolio with investments that aren’t correlated to how the stock market performs — or even negatively correlated — is usually a wise course to take.

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Whether you can’t get over your fear of Wall Street or you just want to diversify, read on to learn about alternative investment options to put your money to work for you without buying stocks. Keep in mind that these choices run the gamut from very safe to highly volatile, so do your homework before you invest.

Investors who are looking for ways to invest in real estate properties but either lack the cash or the time for detailed research necessary to buy them outright should consider a real estate investment trust, or REIT.

REITs invest in a range of real estate, including housing, commercial buildings, hotels and warehouses, and then distribute the rental proceeds to the owners. This lets you include real estate in your portfolio even if you don’t have a couple of million dollars sitting around — or endless hours to research your area — to buy some property yourself.

You can invest in loans to other people through peer-to-peer lending services such as Prosper and Lending Club. You can contribute small amounts — as little as $25 — to fund a loan a customer is requesting and then get repaid with interest as the loan is paid back.

The risk is that you lose your investment if the borrower defaults, but by investing small amounts in a range of notes, you can reduce your exposure to any one person’s financial situation. If you have just one note and the borrower defaults, you’ve lost everything. But if you have 100 small notes, several borrowers could default and you might still come out ahead.

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Check out savings bonds if you’re looking for investments that pay stable interest rates. Savings bonds are offered by the federal government and pay interest over a specified period of time.

They’re very low risk because they’re paid by the government, so the only way you could lose your money is if the government defaulted on its debts. You can buy either Series EE bonds, which pay a fixed interest rate, or Series I bonds, which have a portion of the interest rate based on the inflation rate.