Financial Assets vs.

Physical Assets
Assets
Assets are commonly known as anything with a value that represent economic re-
sources or ownership that can be converted into something of value such as cash.
Financial assets and physical assets, both represent such ownerships of value, even
though they are very different to each other based on their features and characteris-
tics. Since many easily confuse the two types of assets to be of similar meaning
Financial assets
Financial assets are intangible, meaning that they cannot be seen or felt and may
not have a physical presence except for the existence of a document that represents
the ownership interest held in the assets
The papers and certificates that represent these financial assets do not have any in-
trinsic value. The paper derives its value from the value of the asset that is repre-
sented. The financial assets include stocks, bonds, funds held in a bank, invest-
ments, accounts receivable, company goodwill, copyrights, patents, etc. Regardless
of the fact that financial assets do not exist in physical form, they are still recorded
in a firm’s balance sheet, to represent the value that is held by them.
This market that involved buyers and sellers to trade in financial assests such as
bonds, stocks, currencies and so on. Different financial markets serve different
types of customers or different parts of the country. There are many components to
a financial market, two of the most commonly used are money markets and capital
markets
Physical assets
Physical assets are tangible assets and can be seen and touched, with a very identi-
fiable physical presence. The physical assets include land, buildings, machinery,
plant, tools, equipment, vehicles, gold, silver, or any other form of tangible eco-
nomic resource. From an accounting point of view, physical assets refer to the
things that may be liquidated when the entity wound up its interest. Physical assets
have a useful economic life, when it ascertains its age it may be disposed off. They
usually experience a reduction in value due to wear and tear of the asset through
continuous use known as depreciation, or may lose their value in becoming obso-
lete, or too old for use. Certain tangible assets are also perishable, such as a con-
tainer of apples, or flowers that need to be sold soon in order to ensure that they do
not perish and lose their value.
The difference between Financial Assets and Physical Assets?
The main similarity between tangible and physical assets is that they both represent
an economic resource that can be converted into value, and both assets are
recorded in a firm’s balance sheet. The main difference between the two is that
physical assets are tangible and financial assets are not. Physical assets usually de-
preciate or lose value due to wear and tear, whereas financial assets do not experi-
ence such reduction in value due to depreciation. However, financial assets may
lose value to changes in market interest rates, fall in investment returns or fall in
the stock market prices. Physical assets also require maintenance, upgrades and re-
pairs, whereas financial assets do not incur such expenses.
The intuitive distinction between physical and financial investments is clear:
· a physical investment consists in buying a machine tool, a loom, a truck, or
a plant, etc., to put it to work. The tangible assets represent a higher change
at high returns than capital assets, such as stocks and bonds. You should
consider investing in tangible assets if and when they make sense as part of
your overall financial plan. Advocates of many tangible assets, particularly
bullion coins and bars, tout inflation protection. History seems to validate
the use of tangible goods as an inflation hedge. In the more than 100 years
following the creation of the Federal Reserve, the purchasing power of the
dollar declined 95%.The inflation-adjusted value of an ounce of gold in-
creased by more than 2,500% during that same time period.
Investment in tangible assets offers the unique dynamic of immediate per-
sonal satisfaction, or utility, and the potential for increased future consump-
tion through price appreciation. This is less likely with intangible assets.
Any tangible investments can create a psychological benefit. You might buy a col-
lectible or piece of art because you value its display in your home as well as its in-
vestment potential. Similarly, your house itself might be a long-term tangible asset,
but it serves many important functions for you and your family.
So, with that background in mind, here is a comprehensive list and discussion of
the best hard assets to buy. I broke the list of hard assets to invest in 3 main cate-
gories:

Real estate
Commodities & precious metals
Luxury items and collectibles
 · A financial investment consists in buying a piece of paper promising some
future payments.
This distinction is essentially correct. But we shall give it a more formal expres-
sion, using cash flows, which will make it clearer, and more operational.
A financial investment is a financial product like a crypto currency or a stock that
is bought with the goal of making money. Each investment has specific risks, ad-
vantages and disadvantages that will determine how and when investors buy or sell
them.
the higher the risk that an investor takes, the higher the reward a financial invest-
ment could return. As part of their investment strategy, investors must first deter-
mine their risk tolerance by evaluating how comfortable they are with making dif-
ferent types of investments.
Perhaps the most common are stocks, bonds, real estate, and ETFs/mutual funds.
Other types of investments to consider are real estate, CDs, annuities, cryptocur-
rencies, commodities, collectibles, and precious metals.