- I asked financial planners where I could invest my money other than the stock market.
- They recommended art, real estate, and venture capital.
- One unexpected suggestion: investing in your career. Your employer may even pay for courses.
When I finally decided to invest some of the cash sitting idle in my high-yield savings account, I turned to the stock market.
I was a rookie investor and didn’t know what I was doing. I invested in companies I liked or felt had strong potential, but I didn’t do much research. I’ve come a long way since then, optimizing my stock market strategy to include studying earnings reports and being more strategic with my picks.
As I evolve as an investor, I want to make sure I’m diversifying my investments, which is why I decided to turn to the experts for advice on other places to put my money aside from the market. Here are the four suggestions financial planners gave me.
1. Real estate
A good amount of my friends have turned to real estate investing over the past few years. Some have bought properties to rent out for passive income, and others have invested in homes to live in with the goal of selling in 10 to 15 years.
Jason Dall’Acqua, a financial planner, says that real estate investing has long been a strategy for building wealth since it offers the potential for both income and price appreciation.
“Investing in real estate no longer requires a hands-on approach if you wish to simply be a passive investor,” Dall’Acqua says. He continues, “You can invest in real estate through REITs — Real Estate Investment Trusts — which pool together investor money to purchase, and sometimes operate, different forms of property. REITs can be purchased on many stock exchanges, or you can invest directly into certain projects through some of the best real estate investing apps, such as Fundrise. Consider the risks before investing in real estate and understand how it fits into your overall portfolio strategy.”
2. Art
While it might not be high on everyone’s radar, financial planner Carolyn Yun recommends considering investing in art.
“Privately held art collections can provide significant returns outside of market returns. There is a low correlation to the market, although it typically is limited to those with millions to invest in high-quality names. This type of investment generally is illiquid, unregulated, and subject to taste changes,” Yun says.
Investing in art doesn’t always mean buying originals for your home. Some investing apps, like MasterWorks, offer opportunities to invest in art and other alternative investments.
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3. Venture capital
If you’re someone who wants to invest in businesses outside of the stock market, Yun recommends looking into venture capital.
“Some of the greatest amounts of growth in a company’s lifetime can be found in the early stages of its development before it even appears on the market,” she says. “There is a trend these days for startups to delay their public debut until they reach significant valuations into the billions. Those with enough cash can capture those returns by investing in early-stage companies through venture capital funds.”
Fundrise, the real estate investing app, also allows non-accredited investors to invest in venture capital.
4. Your career
For a lot of people, continuing their education and improving their skills can be a worthwhile investment in many ways. Financial planner Marguerita Cheng believes investing in your career by earning certifications and designations is prudent.
Depending on where you work, you might not even have to pay the full cost. “Your employer may be willing to help you cover these costs by reimbursing you upon completion,” Cheng says. “There are tuition remission and professional development benefits.”
This article was originally published in September 2021.