Weighing Physical vs Financial Assets: Portability and Liquidity Risks

When you save money, you can choose to invest it in different ways.

Some investments are called financial, like stocks and bonds, which exist on paper or in digital accounts.

Others are physical, like buying a piece of land or a gold bar that you can actually touch and hold.

Touching your investment can feel nice and reassuring.

If a physical investment does not grow much in value, you can sometimes still use it, like building a house on your land or making jewellery from your gold.

But physical investments have downsides too.

If your job makes you move to another city, you cannot easily take your land with you.

Turning gold into cash takes time and effort, and you need a safe place to store it, like a bank locker, which can be hard to get.

Because of this, the article says people who move often for work should mostly invest in financial assets.

Land should only be used to park extra cash, not money you need for important life goals, since it is hard to sell quickly.

For rental income, Real Estate Investment Trusts can be a good choice, though their prices can go up and down.