Everyone possesses one or more tangible assets. But when it comes to a complete financial plan, you might want to be more considerate about the choice of investment options between tangible assets and intangible assets. Here are a few reasons tangible assets such as gold bars, silver bars, property, car, etc outweigh intangible assets.
How tangible assets are different from intangible assets?
Before you understand the benefits and reasons for you should invest in physical investment collectibles, let’s just view how exactly all the assets are categorized in the category of tangible and intangible assets.
Tangible investments do not need an account balance, exchange market or financial statement. These goods have a natural value to them and they act as a hedge against economic instability. On the other hand, their counterparts such as stocks and bonds are traded in the financial marketplace with a high monetary risk.
Benefits of Tangible Assets
Liquidation is Easy
With an investment in physical goods, you can pave way for better financial security. When you buy a car, a piece of art, jewellery, gold bars & silver bars or a house, you can liquidate them into cash easily and fast.
Reduced Market Risk
Physical assets hold an economic value which is less likely to diminish radically. The assets such as gold bullion and real estate are not as prone to the market risk as bonds & stocks are.
Protection against Inflation
Inflation is a financial situation of a nation when prices increase and purchasing power decrease. There are certain consequences of inflation. The money from savers and investors is transferred to debtors. Therefore, the purchasing power of investors is tended to reduce while debtors become able to pay off their debt with less valuable money. The tangible investments can prove to be a hedge against the challenges of inflation which are thrown onto investors.