Owning Physical Assets That You Can’t Sell Quickly

Apart from serving as a store of value, an asset can also be sold or converted into something else depending on its marketability, which is the ease and speed with which it can be sold at a fair price.

Some assets are more marketable than others, this can affect their value and associated risk/return.

Generally, stocks are more marketable than real estate, as they can near easily be sold through stock exchanges or over-the-counter platforms. It usually takes a while to sell real estate since many processes are involved on the deal.

In a way, stocks can be seen as a tokenization of real world assets, a digital asset that reflects the growth and performance of a physical asset.

Physical assets are assets that we can touch and own. Unlike digital assets, which are intangible and can't really be touched in a traditional sense.

The intangibility of digital assets makes them are great fit in a world that's increasingly becoming digital. Which also makes physical assets less attractive or capable, since their disadvantages keeps on becoming more evident, especially compared to other their digital counterparts.

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The Good With Physical Assets

Physical assets aren't dissappearing on our rear view mirror anytime soon, although they may eventually do.

I personally own more digital than physical assets. I presume many from emerging nations and those of the younger generation are in that situation.

Although physical assets can seem like a burden in this day and age, there is a good aspect to them that many of us overlook and I think this good aspect is a prerequisite to building or growing one's wealth.

With digital assets, buying or selling can happen almost instantaneously without much mental process into it.

Mental process as in 'is this a good asset to purchase at this time period?' or 'Why should I sell now and not later when market conditions may become more favourable?'.

The reason is because the whole process is usually simple, easy, convenient and accessible, with a few button taps and the process is complete.

It's akin to a short circuit, in which the mental process is skipped in this case. So instead of impulse then mental process then buy/sell, we have impulse then buy/sell.

With so many impulses nowadays, I'm sure many of us have bought or sold a couple of digital assets without any mental process behind it.

This is hardly the case with physical assets. Because the whole process is not simple, easy, convenient and accessible. There has to be a mental process involved i.e we need to think twice/thrice about it. Sometimes lots of pondering, as in buying/selling a real estate property.

This seeming disadvantage has a silver lining to it, which is the ability to not easily get distracted, helping one avoid making unnecessary detours.

It also fosters a long term thinking or planning, since every transaction is viewed not only in the present moment but also the future.

It is said that physical assets have intrinsic value that largely does not depend on the opinions or expectations of others. Unlike digital assets, which are more susceptible to the opinions or expectations of others, hence more volatility.

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In Closing

The heart of the matter is that physical assets are not easily sellable. And that can be a good thing in a world that's mostly driven by instant gratification.

Using an analogy, physical assets are like the fruits of a tree that take time and care to grow, but reward one with sweet and nutritious benefits(especially if it is an orange fruit!).

Digital assets on the other hand, are akin to the candies of a store that are easy and cheap to buy, but may not satisfy you for long or nourish you well.

Of course, this is not absolute and does not mean that digital assets are worthless or that physical assets are flawless. Both have their advantages and disadvantages, and both can well complement each other in a balanced portfolio.

But if we have little or no physical assets in the digital age, then we may want to consider grabbing a bit more of them. Because them not being easily sellable could mean more accrued value for us in the long run.


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