Stock-market volatility can give investors a reason to diversify into income-generating assets outside traditional equities, and Schwab's 50-year review confirms that deep drawdowns are a normal feature of equity investing rather than an anomaly. Several alternatives can generate periodic income without daily stock-exchange pricing, although distributions, valuations, and liquidity can still fluctuate: some non-traded real estate vehicles suspended their share-repurchase programs effective April 21, 2026, a reminder that less volatile pricing is not the same as less risk. Online platforms have also lowered the capital required for retail investors to reach private real estate and fractional real estate investing opportunities. This guide examines seven alternatives to publicly traded stocks, starting with mogul, a fractional real estate platform club founded by former Goldman Sachs executives that applies institutional-grade underwriting to income-producing residential property.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Key Takeaways
Fractional real estate offers the highest return potential: mogul targets 15% to 20% annual IRR, a total-return target rather than a current distribution yield, while the income yields on the other alternatives here are far lower: the S\&P 500 Dividend Aristocrats Index yielded 2.49% as of June 30, 2026, the FTSE Nareit All Equity REITs Index yielded 3.56% as of July 31, 2026, and Treasury par yields ranged from 3.79% to 5.20% across the curve on August 7, 2026
Monthly distributions can improve cash-flow planning: once a property is operational and generating distributable net rental income, mogul generally distributes each investor's proportional share monthly. Schedules vary elsewhere: dividend-focused equity funds commonly distribute quarterly, marketplace lending notes pay monthly, and some non-traded REITs paused distributions in January 2026
No recurring AUM fee reduces long-term fee drag: mogul charges no recurring annual asset-management fee on invested principal, paired with an ongoing 2.5% fee on collected rental income, while comparable vehicles disclose annual vehicle-level asset-management fees on invested capital ranging from about 0.85% to 1.25%, before other expenses
Pass-through structures can allocate depreciation: mogul's property-specific LLCs are designed to issue K-1s that may allocate proportional depreciation and other property-level tax items, a treatment REIT shareholders generally do not receive, though an investor's ability to use those deductions depends on individual tax circumstances
Member protection for new investors: mogul covers up to $10,000 in losses for new members during their first year, a protection that sets mogul apart from the other alternatives covered in this guide
Institutional-grade selection matters: less than 1% of properties pass mogul's underwriting process, supporting a portfolio focused on institutional-quality assets
Structure determines tax treatment, not labels: fractional and crowdfunding offerings vary widely, and some property-linked series LLC programs still report distributions to investors on Form 1099-DIV
1. mogul (Fractional Real Estate)
mogul delivers a fractional real estate platform club that transforms how investors access income-generating residential properties through monthly dividends, real-time appreciation, and tax benefits. Founded by former Goldman Sachs executives with $10 billion+ in deal experience, mogul applies institutional-grade underwriting to single-family rentals, short-term rentals, and mid-term rental properties.
How Does mogul Work?
mogul purchases income-producing properties, places each into a state-registered LLC, and fractionalizes ownership into shares investors can purchase. Key highlights:
Direct Ownership: mogul creates a separate LLC in the property's state, taxed as a partnership, that acquires and holds the single property, and each investor owns a proportional membership interest in that entity rather than a share of a blind pooled fund
Monthly Income: once a property is operational and generates distributable net rental income, mogul generally distributes each investor's proportional share monthly. Amounts reflect rent collected, expenses, reserves, occupancy, and offering terms
Tax Advantages: mogul's property-specific LLC structure is designed to provide investors with K-1s that may allocate proportional depreciation and other property-level tax items. Depreciation may reduce taxable rental income, and the available tax benefits depend on rental-loss limitation rules, basis, income, tax status, state taxes, and eventual depreciation recapture
Hands-Off Management: mogul offers professionally vetted and managed properties, coordinating day-to-day property management, tenant relations, maintenance, and operations through professional property managers. Decisions below $1,000 are handled directly by licensed property managers, while decisions above $1,000 go to an investor vote decided by supermajority, so investors retain governance rights on significant property decisions
Documented Performance
mogul's platform demonstrates consistent results backed by institutional expertise:
18.8% average annual return versus 9% for the S\&P 500 in mogul's analysis; benchmark figures vary with the measurement period and methodology, and Fidelity reports the index has averaged about 10% annually since its 1957 launch
2.6% record monthly yield as of June 1, 2026 achieved on platform properties
90% of investors invest a second time, and when they do it is 3x their first investment
$90M+ in assets on the platform, 40,000+ investors, and a typical portfolio allocation of $17,321 per property
Fee Structure
mogul's fee model stands apart from the alternatives:
No recurring annual AUM or asset-management fee on invested principal, paired with an ongoing 2.5% fee on collected rental income
mogul's platform materials summarize the upfront charge as a 5% fee capitalized into the deal, described in detail as a 3% platform and onboarding fee plus a 2% setup fee where rent-ready preparation is required, so the additional 2% is conditional rather than universal
Projected returns displayed on the platform are shown net of applicable capitalized fees
The absence of a recurring AUM fee reduces fee drag over multi-year holds compared with vehicles charging annual fees on invested capital, leaving more capital working in the property. Outcomes reflect each platform's full fee schedule together with rental income, occupancy, rent growth, appreciation, and transaction costs
Risk Protection and Member Rewards
mogul offers member protection and rewards that support new investors:
First $10k protection for new members: if the total return on investments made in your first 7 days results in a loss of $10,000 after one year, mogul covers up to $10,000 of that loss with its own balance sheet capital
Give $50, Get $50: refer a friend and get $50 when they invest, subject to the referral program terms
Rigorous property selection: less than 1% of reviewed properties pass mogul's diligence process
Community rewards: community features like mogul Clubs distribute up to 2% in rewards to members
Aligned interests: mogul personally invests in every property offered on the platform
Best For: Investors seeking institutional-quality real estate returns with monthly income potential, pass-through tax reporting through direct LLC ownership, and no recurring asset-management fee on invested principal.
2. Real Estate Crowdfunding Platforms
Real estate crowdfunding platforms pool investor capital to fund property acquisitions or developments. These platforms offer various fund structures with different risk-return profiles, while other operators sell interests tied to individual properties.
Key Features
Low minimums: minimums vary by product and by offering
Automated portfolios: fund managers handle property selection and management
Diversification: pooled structures spread risk across multiple properties
Periodic distributions: many real-estate vehicles target periodic distributions, often quarterly, though frequency and continuation depend on the specific vehicle. Some pooled vehicles reserve the right to distribute more or less frequently, or to suspend the policy entirely, and some non-traded REITs paused distributions in January 2026
Considerations
Fee structures: asset-management fees are vehicle-specific. Current examples range from 0.85% annualized at one pooled eREIT, with authority for the manager to set it as high as 1.00%, to 1.00% and 1.25% at certain non-traded REITs, before other expenses
Ownership structure varies: pooled REIT and fund offerings give investors interests in a portfolio vehicle. Other models sell series or SPV interests tied to individual properties, where each series holds its property through a wholly owned subsidiary LLC, so the entity rather than the individual investor holds legal title
Tax reporting varies by structure: some crowdfunding and fractional offerings issue Form 1099-DIV rather than passing depreciation through on a K-1. In one current example, investors purchase property-linked series membership interests, yet 2026 current reports state that shareholders will receive Form 1099-DIV
Redemption restrictions: liquidity is typically limited and discretionary. Redemption or repurchase programs may be capped, modified, or suspended entirely, as with the non-traded REIT share-repurchase programs suspended effective April 21, 2026
Best For: Beginners seeking fully automated real estate exposure who prioritize simplicity over tax optimization and can accept discretionary liquidity.
3. Non-Traded REITs
Before treating REITs as an alternative to stocks, it is worth being precise about which REITs qualify. Most REITs trade on major stock exchanges, with Nareit counting 149 REITs listed on the NYSE as of July 31, 2026, and a current real-estate fund prospectus describes its underlying REIT exposure as stock and equity-market exposure. Publicly traded REITs are therefore equity securities and are not a true alternative to stocks, even though they provide real-estate exposure. Non-traded and non-listed REITs are the version of this asset class that actually sits outside daily exchange pricing, and they are the focus of this section.
Types of REITs
Equity REITs: own and operate income-producing properties
Mortgage REITs: invest in real estate debt instruments
Hybrid REITs: combine property ownership with mortgage investments
Sector-specific REITs: focus on residential, commercial, industrial, or healthcare properties
Advantages
Broad diversification: a single REIT can own hundreds of properties
Professional management: institutional-level operations expertise
No daily exchange pricing: non-traded REITs are not marked to public-market sentiment every trading day
Disclosure for registered offerings: publicly listed REITs are subject to extensive SEC reporting requirements, and non-traded REITs conducting registered or Regulation A offerings file ongoing reports such as an annual report; private and exempt REIT offerings operate under different disclosure regimes, as with a May 2026 Form D notice of exempt offering
Limitations
Tax treatment: REIT distribution tax character varies and is not uniformly ordinary income. For listed U.S. REITs, Nareit reports that 2025 distributions were 79% ordinary taxable income, 10% return of capital, and 11% long-term capital gains on a market-cap-weighted basis. REIT shareholders generally do not receive direct allocations of property-level depreciation
Market correlation: publicly traded REITs move with broader stock-market volatility, which is precisely why they do not function as a stock alternative
Yields: listed U.S. REIT yields were 3.93% for the FTSE Nareit All REITs Index and 3.56% for the All Equity REITs Index as of July 31, 2026
Fees: an individual publicly traded REIT share does not charge an investor a fund-style expense ratio; REIT mutual funds and ETFs do, and those ratios vary by fund. One current summary prospectus reports total annual fund operating expenses of 0.13%. Non-traded REITs carry different vehicle-level fees, including annual asset-management fees of 1.00% and 1.25%
Liquidity: non-traded REIT repurchase programs are discretionary and can be suspended entirely
Best For: Investors who want broad, professionally managed real-estate diversification outside daily exchange pricing and who accept limited, discretionary liquidity and no depreciation pass-through.
4. Private Credit Funds and Non-Traded BDCs
Private credit has become one of the largest non-stock income categories available to individual investors, with CAIA describing a roughly $2.02 trillion market. Non-traded business development companies (BDCs) and perpetual private-credit funds make senior secured, largely floating-rate loans to private companies and pass the interest income through to shareholders.
Current Yield Data
One perpetual private credit fund reported a second-quarter 2026 annualized distribution yield of 10.3% and an inception-to-date annualized net cash distribution yield of 10.4%, with no non-accrual investments as of June 30, 2026
Another large perpetual vehicle reported an annualized distribution rate of 9.0% for Class S shares as of March 31, 2026
Non-traded BDCs commonly target monthly distributions and provide 1099 tax reporting
Advantages
High current income: floating-rate senior secured loans have supported distribution yields well above investment-grade bond yields
Monthly or quarterly distributions: many perpetual vehicles target monthly income
No daily exchange pricing: valuations are periodic rather than continuous
Regulated structure: BDCs are SEC-regulated vehicles with periodic NAV reporting
Limitations
Liquidity is capped by design: redemptions in perpetual non-traded BDCs are generally capped at 5% of NAV per quarter. Average redemptions across perpetually non-traded BDCs rose to 4.8% of NAV in Q4 2025 from 1.6% in Q3 2025, five BDCs funded tenders above the standard cap, and Moody's noted the first-ever quarterly outflow in Q1 2026
Credit risk is rising: Morgan Stanley has warned that direct-lending default rates, running around 5.6%, could reach 8%, against a 2% to 2.5% historical average
Ordinary-income tax treatment: distributions are largely ordinary income reported on Form 1099, with no depreciation pass-through to the investor
Eligibility limits: non-traded BDCs typically require accredited-investor status, and fund materials such as a quarterly investor report are marked for accredited investors only, noting that no secondary market exists and none is expected to develop
Best For: Accredited investors seeking high current income from corporate credit who can accept capped liquidity, ordinary-income taxation, and concentrated sector risk.
5. Bonds and Bond Funds
Individual fixed-rate bonds generally provide scheduled interest and principal payments if held to maturity and the issuer performs. Bond funds are different: their share prices and returns fluctuate with portfolio turnover and market conditions, and they do not promise a fixed maturity value to the shareholder.
2025 Performance
Bloomberg U.S. Aggregate Bond Index: 7.30% total return for the 12 months ended December 31, 2025
Bloomberg U.S. Corporate High Yield Index: 8.62% total return
Bloomberg Municipal Bond Index: 4.25% total return
Current Yields by Maturity and Sector
Treasury par yields on August 7, 2026 were 3.79% at one month, 4.01% at one year, 4.19% at two years, 4.25% at three years, 4.35% at five years, 4.65% at ten years, 5.20% at twenty years, and 5.19% at thirty years. On the credit side, State Street reported that a broad U.S. high-yield benchmark carried a 7.11% average yield-to-worst and a 7.51% yield-to-maturity on August 6, 2026, with a 6.79% 30-day SEC yield on the corresponding fund.
Bond Categories
Treasury bonds: direct obligations of the U.S. government with the lowest default risk; yields are maturity-specific rather than a single band, ranging from 3.79% to 5.20% across the curve on August 7, 2026
Corporate bonds: yields depend on credit quality, maturity, call structure, and which yield metric is quoted, so investment-grade and high-yield benchmarks should be quoted separately rather than as one range
Municipal bonds: interest from many qualifying state and local government obligations is generally exempt from federal income tax, subject to requirements and exceptions
High-yield bonds: a representative U.S. high-yield corporate benchmark had a 7.11% yield-to-worst as of August 6, 2026, with materially greater credit risk than investment-grade debt
Advantages
Capital preservation: Treasuries are backed by the U.S. government
Scheduled payments: individual fixed-rate bonds pay contractual interest and return principal at maturity, subject to issuer and default risk
Tax benefits: qualifying municipal interest is generally exempt from federal income tax
Lower volatility: generally less volatile than stocks
Limitations
Interest rate risk: bond prices fall when rates rise
Inflation erosion: fixed payments lose purchasing power over time, unlike real assets that can act as a hedge against inflation
Lower returns: current benchmark yields of roughly 3.79% to 5.20% on Treasuries and 7.11% yield-to-worst on high yield sit below mogul's 15% to 20% target IRR, though an IRR target is a projected total return rather than a contractual yield
Tax treatment: Treasury interest is federally taxable but exempt from state and local income taxes, most corporate interest is taxed as ordinary income, and qualifying municipal interest is generally federally exempt with exceptions
Fund-level fluctuation: bond-fund NAVs and realized returns vary and do not deliver a fixed maturity value
Best For: Conservative investors prioritizing capital preservation over growth, particularly those in high tax brackets who benefit from municipal bond exemptions.
6. Peer-to-Peer Lending
P2P marketplaces can economically link investor returns to borrower loans, but the legal structures vary. At one registered marketplace, retail investors purchase Borrower Payment Dependent Notes issued by the platform's funding entity; the notes are not obligations of the underlying borrowers, and payments depend on what the funding entity receives on the corresponding borrower loan.
Market Overview
One registered marketplace reported a 5.3% weighted-average historical return as of December 31, 2025, and a 4.4% average three-year rolling return for January 2023 through December 2025, calculated under its own specified methodology
P2P Dash reported a 12.0% median net XIRR among portfolios tracked on its site in 2026; this is a user-reported, multi-platform, multi-country sample and should not be treated as a U.S. market average
Current minimum investor bids can be as low as $25, and such notes typically pay monthly
Platform Landscape
The U.S. P2P market has consolidated significantly. Effective June 22, 2026, LendingClub Corporation became Happen, Inc., and LendingClub Bank became Happen Bank, National Association, so the former LendingClub retail P2P model no longer exists in that form. One SEC-registered U.S. marketplace continues to offer borrower-payment-dependent notes to eligible investors.
Considerations
Default risk: borrower defaults directly reduce returns, and offering documents disclose that these notes are highly speculative and that investors can lose their entire investment. Rather than a single market-wide default forecast, platforms publish risk metrics by internal loan rating and loan characteristics
Limited liquidity: no trading platform currently exists for these retail notes, which are generally held to maturity
Tax treatment: interest and original issue discount on such notes are generally treated as ordinary interest income. The top 2026 federal marginal rate is 37%, although an investor's actual rate depends on taxable income and circumstances
Platform risk: lender and servicer viability affects investor capital
Best For: Experienced investors comfortable with credit risk who seek diversification away from traditional asset classes and understand the potential for loss.
7. High-Yield Savings Accounts and CDs
FDIC-insured savings accounts and CDs are among the lowest-credit-risk income options for balances within applicable insurance limits. Real purchasing-power returns depend on the account APY, inflation, taxes, and account conditions: the latest available CPI reading, for June 2026, showed prices 3.5% higher year over year, while leading accounts offered up to 4.50% APY.
Current Landscape
High-yield savings rates: leading HYSAs were offering roughly 3% to 4.50% APY as of August 7, 2026, with rates above 4% often subject to balance, deposit, or promotional conditions. The top listed 4.50% rate applies only to the first $5,000
CD rates: competitive CDs were generally in the low-to-mid 4% range in early August 2026. WSJ's August 6, 2026 survey reported a leading 12-month CD at 4.50% APY, a 4.40% average among top high-yield CDs, and highest quoted rates across maturities ranging from 4.14% to 4.55%
FDIC insurance: $250,000 per depositor, per FDIC-insured bank, per account ownership category
Advantages
Deposit protection: eligible deposits are protected against bank-failure losses within applicable FDIC insurance limits
High liquidity: savings-account funds are generally accessible on demand, subject to the institution's transfer methods, processing times, and account terms
No market exposure: returns are unaffected by stock or real estate price movements
Simplicity: no expertise required
Limitations
Inflation sensitivity: whether a given APY preserves purchasing power depends on the rate, inflation, taxes, and account conditions
Opportunity cost: cash products generally sacrifice growth potential in exchange for liquidity and principal protection
Rate variability: savings rates are variable and fluctuate with the federal-funds rate and other market and business conditions
Early withdrawal penalties: many standard CDs charge an early-withdrawal penalty; no-penalty CDs are an exception
Best For: Emergency fund allocation or ultra-conservative investors prioritizing capital preservation over growth.
Why mogul Stands Out for Income-Seeking Investors
Highest Return Potential Among These Alternatives
mogul targets 15% to 20% annual IRR through carefully selected single-family and short-term rental properties. That target sits well above the income yields available across the other categories in this guide, including 2.49% on the Dividend Aristocrats Index as of June 30, 2026, 3.56% on listed equity REITs as of July 31, 2026, 3.79% to 5.20% across the Treasury curve on August 7, 2026, and 7.11% yield-to-worst on a representative U.S. high-yield benchmark on August 6, 2026. The platform reports an 18.8% average annual return versus 9% for the S\&P 500 in mogul's analysis, and Fidelity puts the index average at about 10% annually since 1957. Targets reflect objectives rather than promised outcomes, as with any real estate investment.
Monthly Income Without a Recurring AUM Fee
Distribution schedules vary widely across income alternatives: some pay monthly, some quarterly, and some pause distributions entirely. Once a mogul property is operational and generating distributable net rental income, mogul generally distributes each investor's proportional share monthly, which supports tighter cash-flow planning than quarterly schedules. mogul also charges no recurring annual asset-management fee on invested principal, alongside an ongoing 2.5% fee on collected rental income, whereas comparable vehicles disclose annual asset-management fees of 0.85%, 1.00%, and 1.25% on invested capital. Removing recurring fee drag on principal leaves more capital compounding for members over the life of a hold.
Direct LLC Ownership With Pass-Through Tax Reporting
Structure, not marketing language, determines tax treatment. Some property-linked series programs still report distributions on Form 1099-DIV, and REIT shareholders generally receive distributions rather than direct allocations of property-level depreciation. mogul's property-specific LLC structure is designed to provide investors with K-1s that may allocate proportional depreciation and other property-level tax items, which can offset some or all property-level rental income. An investor's ability to use those allocations depends on rental-loss limitation rules, basis, income, filing status, state taxes, and eventual depreciation recapture, so the relevant tax benefits should be evaluated with a tax advisor.
Institutional-Grade Selection Process
mogul's founders bring Goldman Sachs real estate experience to property selection, including co-founder Joey Gumataotao, who grew Goldman Sachs' single-family rental platform from $0 to $1 billion in under 12 months. Less than 1% of reviewed properties pass the platform's underwriting process, keeping the focus on institutional-quality assets. The team personally invests in every property offered, aligning management interests with investor returns.
An Asset Class With a Lower Historical Volatility Profile
mogul focuses on single-family rentals, an asset class that mogul's historical analysis reports exhibited a 45% lower standard deviation than the S\&P 500 from 1993 to 2023, alongside a 13.8% IRR versus 9.8% for the S\&P 500 over that period. Single-family rentals are held as private real estate rather than continuously exchange-traded securities, so their valuations are not repriced by daily market sentiment. Investors weighing the stocks vs real estate comparison can use that history as asset-class context alongside mogul's own platform results.
Free Tools for Informed Decisions
mogul provides four free calculators that analyze potential returns for any U.S. address: a rental property calculator, an Airbnb calculator, a real estate calculator, and an investment property calculator. These tools use institutional-grade data to project rental income, ROI, IRR, and cash-on-cash yields, helping investors evaluate opportunities with clearer numbers.
Risk Protection Unmatched by These Alternatives
mogul's first-year $10,000 protection gives new members downside coverage that stands apart from the other income alternatives covered in this guide. This feature addresses the primary consideration many investors have when entering a new asset class.
For investors seeking alternatives to stock market volatility, mogul combines the wealth-building potential of real estate with institutional expertise and investor-friendly fee structures, making real estate investing more accessible and headache-free. Browse available properties to see current investment opportunities, or schedule a call with the team.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Frequently Asked Questions
What makes fractional real estate a strong alternative to stocks for generating income?
Some fractional real estate investments can provide periodic cash distributions alongside exposure to property appreciation, and pass-through structures may allocate depreciation and other property-level tax items to investors. Distribution frequency and tax treatment depend on the specific legal and tax structure rather than the "fractional" label: in some programs, investors buy property-linked series interests yet are told they will receive Form 1099-DIV. mogul targets 15% to 20% annual IRR against income yields of 2.49% on the Dividend Aristocrats Index and 3.56% on listed equity REITs. Fractional real estate is generally not priced continuously on public exchanges, and it carries property-value, occupancy, operating, and liquidity considerations that come with owning real assets.
How does mogul approach property selection?
mogul's founders, former Goldman Sachs executives, apply institutional-grade underwriting to every opportunity, and less than 1% of properties reviewed pass the platform's selection process. mogul personally invests in every property offered, aligning management and investor interests.
What are the risks of fractional real estate investing?
As with any real estate investment, returns depend on property values, occupancy, operating costs, holding period, and local market conditions, and distributions reflect collected rent net of expenses, fees, and reserves. mogul addresses these factors through rigorous property selection, capitalized reserves at the property level, property and business interruption insurance, and coverage of up to $10,000 in losses for new members during their first year.
Can international investors use mogul to invest in U.S. real estate?
mogul's platform serves investors seeking U.S. real estate exposure. International investors should consult tax advisors regarding cross-border investment implications and reporting requirements for their specific jurisdiction.
How does mogul's fee structure compare to other income alternatives?
mogul charges no recurring annual asset-management fee on invested principal, alongside an ongoing 2.5% fee on collected rental income. Comparable vehicles disclose annual asset-management fees on invested capital of 0.85%, 1.00%, and 1.25%, before other expenses. mogul's platform materials summarize its upfront charge as a 5% fee capitalized into the deal, described in detail as a 3% platform and onboarding fee plus a 2% setup fee where rent-ready preparation is required, with projected returns shown net of applicable capitalized fees.
What is the difference between fractional real estate and REITs?
Fractional real estate structures may give investors LLC or series membership interests tied to a specific property; depending on the offering, the entity rather than the individual investor holds legal title. REIT shareholders generally receive distributions rather than direct allocations of property-level depreciation, and those distributions can consist of ordinary income, return of capital, and capital gains: Nareit reports that 2025 listed REIT distributions were 79% ordinary taxable income, 10% return of capital, and 11% long-term capital gains on a market-cap-weighted basis. mogul's property-specific LLC model is designed to deliver K-1 reporting that may allocate proportional depreciation along with clear visibility into exactly which property you hold an interest in.