Are you interested in investing but unsure about where to put your money? Wary about paper assets and looking for something more substantial? Then you may be a perfect match for tangible investments.
Most people own and invest in tangible and intangible assets to have their own money-making machine. These assets will help you get your desired lifestyle, so it is best to know more about investments.
If you’re ready to learn more, let’s get to know about tangible investment, its advantages and drawbacks, and its many forms. Keep reading.
What Are Tangible Investments?
Tangible investments are the type of investments made on tangible assets. Tangible assets are assets with a physical form and financial value.
Tangible investments include real estate, ancient artifacts, cars, fine art, gold, silver, or other precious metals.
You can put your money into tangible investments for these 2 basic purposes:
- Use the asset for production or construction purposes
- Get long-term profits
Most of these assets are used for profits as their probability of value appreciation is quite high. They are most profitable when held for long periods. However, their value increases and decreases depending on the country’s economic situation.
Tangible vs. Intangible Investments
As the name suggests, intangible investments are the opposite of tangible investments. These investments are intangible assets with no physical form; thus, you cannot use, touch, or feel them while in your possession. Some examples are logos, royalties, property rights, copyrights, etc.
Furthermore, some intangible investments may not involve buying assets, such as when a company spends for advertising or marketing a product, brand, or organization, which is considered investing in a successful outcome or future.
Examples of Tangible Investments
Some examples of tangible investments include:
- Real Estate
- Commodities (oil, coffee, steel, gasoline, etc.)
- Collectibles (jewelry, coins, books, etc.)
10 Best Tangible Investments To Invest In Today
1. Real Estate
There are numerous benefits to investing in real estate. They involve low risk and a high rate of return on long-term investments. One of the main reasons to invest in real estate is the ability to generate cash flow, as most of the money is gained through rent.
Along with the rent, the property’s value also increases over time, contributing to the overall long-term profit. Remember that your primary residence is not a real estate investment, as it’s used for your home.
In addition, you will have to pay taxes if you gain profit at the time of selling your home.
- Fundrise. If you’re in the United States, Fundrise is where to start your portfolio. You only need $10 to set up your portfolio. Fundrise lets you invest in private commercial and residential properties to build your passive income portfolio.
- Mintos. My first Peer-to-Peer lending love. When you sign up using my link, you get a bonus of 0.5% of your invested amount in the first 90 days. Read our full Mintos review for more details on the platform and how to get started.
- EstateGuru. A European real estate crowdfunding platform for property-backed loans. Use my EstateGuru link for a 0.5% bonus on the first three months’ investments. Here is our full EstateGuru review to check how to earn 11%+ per year passively.
Investing in stocks is the most popular tangible investment nowadays. The best way to invest in stocks is to diversify your portfolio: you should own stocks from different companies to build your savings, maximize income, and protect your money from taxes and inflation.
The best investor is the one who calculates the risks well, so make sure that you know about the stock before making a purchase.
Here are some useful investment tools and platforms you may try if you are interested in playing in the stock market:
- M1 Finance. A stock and ETF brokerage, M1 Finance lets you invest for as low as $100. Read our full M1 Finance review and learn the services that it provides.
- DEGIRO. A brokerage firm like M1 Finance, DEGIRO is based in Europe. For more information, read our full DEGIRO review and start investing.
Investors buy bonds because of their predictable income stream. Most bonds pay interest twice a year.
On reaching maturity, the investor can get the entire principal back, making it a good way to preserve capital. You can invest in 3 main bond types: corporate, high-yield, and municipal.
Gold has a very long history. Gold bullions or coins seldom lose value, making it one of the best investing tangible assets among other precious metals like silver or platinum.
From 1998 to 2008, gold prices almost tripled due to the fall of the US dollar, reaching the top mark of $1,000 per ounce. 4 years later, its price doubled again, hitting $2,000 an ounce.
Recent analytics indicate that gold prices have increased from $1,260 in 2017 to $1,858.
5. Classic Vehicles
Collecting classic cars is one of the best ways to invest in vehicles. Buying an old classic car and returning the stylish old looks of its times can generate much profit for you.
According to Statista, the global classic car market revenue, which was 30.9 billion U.S. dollars in 2020, is expected to grow 8.8 percent annually until 2024. With a resale value reaching 193% over the past decade and a yearly appreciation of as much as 25% yearly, classic cars can be considered one of the best tangible at present.
Equipment can be one of the most beneficial investments you can do for your business. The main purpose of investing is to meet changing business needs, which involves increasing productivity and efficiency, improving safety and security, and being competitive.
Unlike other tangible investments, equipment does not generate profits directly, playing a vital role in generating them by assisting in the smooth execution of the company’s operations.
Art, coins, and similar collectibles are a good way of fulfilling your dream while making profits.
The best part of investing in them is that you can make your portfolio highly diversified. You can include as many collectibles as you want in it, but you are highly advised to buy what you can afford.
The main reason for investing in infrastructure is to build wealth by promoting quality and improving well-being. The government builds most infrastructure, which can boost regional economies and create opportunities.
Investing in them can help your country grow while improving your own lifestyle.
Investing in commodities is a great way of generating profit. These include crude oil, coffee, steel, gasoline, etc.
There are 2 main reasons why you should invest in commodities:
- They minimize your portfolio volatility.
- They can be a hedge against inflation.
Commodities are often affected by global production, weather, and political conditions. They can not be predicted by analyzing previous trends. Their prices follow inflation, which can help your portfolio defend against increasing prices.
As a result, the volatility of your diversified portfolio will decrease.
Investing in businesses is one great tangible investment, but it does require some expertise.
Here is a list of a few things you must consider before investing:
- Financial performance of the business
- Its growth records
- The business plan
- The unique idea behind its existence
- Strong narrative
- Readiness of the business
Things To Remember When Making Tangible Investments
Here are the 5 best tips for you to follow while making tangible investments:
A tangible asset can sometimes become difficult to sell. So, ensure you can afford to live with it if you can’t make an appropriate deal for your asset. It is better if you invest in collectibles you want to own.
- Knowledge About the Market and the Asset
Tangible assets are not passive investments every time. You should know about the asset well before making a purchase. For example, your knowledge about the arts can help you understand their worth better.
Do not make a purchase before determining the real cost of investment. Be alert and savvy to hidden, minimized, or not-so-obvious expenses – for example, taxes in real estate, management costs in stocks and funds, maintenance outlays in vintage cars, etc.
- Investment Protection
To protect yourself from fraud, ask for the seller’s important documents about the asset. Once you buy the item, take good care of it to maintain its value.
- The Credibility of the Dealer or Seller
After getting all the relevant knowledge about the asset you are looking to buy, it is important to know the credibility of the person you are buying from. Use your knowledge and ask all the relevant questions to make the deal as transparent as possible.
Frequently Asked Questions (FAQs) – Tangible Investments
What Are Examples of Tangible Investments?
Following are examples of tangible investments:
- Real Estate
Are Stocks Tangible Investments?
Yes, stocks are considered tangible investments. They are a form of security that shows that the holder has some percentage of ownership in the corporation that issues its stock.
Being security that physically exists, the stock becomes part of tangible investments.
What Are the Best Tangible Investments?
The best 3 tangible investments currently are real estate, gold, and equipment. These investments produce high long-term profits for investors in the current market.
What Is an Intangible Investment?
Intangible investment is done in assets that cannot be seen, touched, or felt.
Investing in an asset that does not have any physical form is known as an intangible investment.
Conclusion – Tangible Investments
Consider both the positive and negative sides of tangible investments and your financial goals and personal preferences as an investor.
Make sure you have done extensive research and practiced due diligence before you part with your hard-earned money. Should you veer away from more traditional investment options or diversify your portfolio for risk-hedging purposes, tangible investments, such as land, gold, commodities, or collectibles, could be a good bet.