Beyond the Basics: 7 Ways to Start Investing Outside Your Retirement Accounts

Let’s be honest, who actually wants to gain average returns and wait until they’re 65 to start cashing in? Unless you’re already living the high life, you're probably dreaming of something more.

Investing outside of your retirement accounts is the next level-up for your money. The average return on investing into the stock market is 10% per year, while the right cryptocurrency moves can net you 100%+ returns.

If you’d invested $1,000 in Ethereum at the beginning of 2021, that investment would now be worth around $5,700. That’s an increase of just over 470% in only 8 months. 

You’re not average, so why settle for an average investment portfolio? With a little effort, you can build a portfolio that goes beyond the basics and does a better job of both protecting you against risk and earning you bigger returns. Here's how.

Having a retirement account sets you up for those golden years, when you’ve got as many gray hairs as George Clooney. You may not have a beautiful villa in Lake Como, but you’ve got enough cash to enjoy life without a 9 to 5. 

The average retirement account returns between 3% to 8% on a 401(k) plan, although you’ll gain a slightly higher return with an IRA or if you participate in an employer matching program. Let’s look at an example of what you can expect. 

• Imagine you were born in 1986, live in San Francisco, have an annual income of $80,000 and plan to retire at 65.
• You put $5,000 dollars per year into your retirement fund and your employer matched 1% of your salary.
• You could expect your account to be worth $415,290 in 30 years with a 4% annual rate of return.
• Between the ages of 65 and 95, that fund would provide you with an annual income of just $23,611.

You still want to hold onto your retirement accounts. Employer matching is free money, and the tax advantages you get with these accounts are priceless. If you want to earn more, though, branching out into alternative investments is the way to do it. 

On top of increasing your earnings, sinking your teeth into alternative investments can help you:

• Diversify your portfolio
• Earn passive income or dividends
• Invest in things you’re passionate about 
• Have more control over your future

There’s never been a better time to start investing outside of your retirement accounts. It’s easy, accessible, and even beginners can get started without expert knowledge. 

Before you choose where you want to invest, ask yourself a few questions:

• What are your areas of interest or expertise?
• What target returns are you looking for?
• Do you need access to your cash quickly, or are you happy to let it ride for a while?
• What are your investment goals?
• What level of risk do you want?

Once you’ve answered these questions, you can hone in on what types of investments are the best fit for your needs. Here are some top picks.

Trading stocks can give you high returns on your investments, especially if you’re planning to only hold them in the short-term. While knowing which stocks to invest in can be tricky, opting for ETFs—a collection of shares of several companies can lower the risk.

Start investing in stocks, shares and ETFs with SoFi. You only need a minimum of $5 to begin. You can automate investing and receive free financial planning worth $590.

Real estate investing is a great way to earn passive income without having to physically deal with renting or selling a property. The easiest way to start is by pooling money with others in a Real Estate Investment Trust (REIT) to purchase a property.

Alternatively, you can use GROUNDFLOOR to invest in property loans which are then paid back with interest. You can start with as little as $10, making on average a 10% ROI on a 6-to-12-month loan period.

Digital currencies, such as Bitcoin and Ethereum, are stored and transferred electronically. Unlike traditional stocks, cryptocurrency value is influenced by supply and demand, meaning it can be hard to value. While returns fluctuate dramatically, making crypto a risky play, when you're up...you're really, really up.

Cryptocurrency platform Coinbase allows you to buy and sell a wide range of currencies. You can invest from $10, tracking your assets and managing your portfolio within the app.

Support businesses and entrepreneurs by pooling money with other investors to lend cash via loans. Lending platforms allow people to borrow money fairly while investors are rewarded with attractive returns.

Invest from $100 with Mainvest. This platform provides a 7% to 10% target return on your investment, delivered by businesses sharing their revenue in return for loans.

Sneakers, artwork, and retro games are the new kids on the block when it comes to investments. Acquire small shares in collectibles and famous cultural items, gaining a return on your investment as their value increases.

With Public, you can start investing in iconic items from just $10. New assets are launched each week, though you're able to invest in items around the clock.

Back projects you’re passionate about by investing in startup companies. If you discover a startup that becomes a large business, you’ll gain a significant return on an investment.

Invest as little as $100 with Republic. All startups are vetted and only 3% of those that apply are accepted. With zero fees, there is potential to make an excellent return.

Farmland investments can deliver seriously high returns, particularly as they are often considered one of the most secure types of investing. 

FarmTogether allows users to invest in US farms and even own a farm outright. You’ll need a minimum of $10,000 to get started. Sole ownership requires a $1 million investment. However, the target return falls between 8% and 12%.