Tangible and Intangible Assets Explained in 1 minute

As there name suggests, tangible assets, such as gold or real estate can actually be touched and this tends to gives people a more authentic sense of ownership.  Intangible assets tend to be perceived as more abstract, and can be 1) completely intangible, such as bitcoin or domain names or 2) claims to tangible assets such as a stock certificate, which makes you the owner of a small percentage of a company. That company has real equipment as well as lots of tangible assets. Assets that you as a shareholder indirectly own.

The main pro of tangible assets, is that they’re limited in quantity. Central banks ca’t just print gold or real estate, for example. The main con however, is that they are hard or even impossible to move around. What if you’re forced to leave your country after something like a socio-political calamity? You’d have to leave your real estate behind and even once highly portable tangible assets, such as gold or silver, can easily be confiscated at the border or at checkpoints if capital controls were instituted with todays technology.

The main pro of intangible assets is that they’re extremely portable. For some, such as bitcoin or domain names, you don’t even need a piece of paper. Just remember some login details and you’re good to go. The main con however, is that if something renders you unable to access the internet, a war for example, it’s very easy to lose access to such assets. As can be seen, these 2 asset types compliment one another, and a balanced personal finance strategy should definitely include both.

 

 

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