In the world of cryptocurrencies and plastic money, we often feel that physical assets don’t have the same value as they used to have a few decades back. But trust me, it is absolutely untrue!
There are several best physical assets to buy this year that are guaranteed to give you a higher return in the near future.
However, you need to understand all the pros and cons of investing and holding physical assets to make big money from them.
Besides, you also need an expert’s guidance to invest in the right physical asset according to your investment capacity and existing portfolio.
So, we have not only tested and analyzed all the possible physical assets in the current scenario but also discussed with many pro investors to identify the right assets according to your budget and investment needs.
But before diving deep, let’s clear some of your doubts first!
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Examples Of The Best Assets To Invest In 2023
In the broader horizon, there are four main instruments of assets in the 21st century: physical assets, paper assets, currency assets, and business assets.
Paper assets are traditional instruments that include bonds, debentures, stocks, and more.
On the other hand, a business asset is when you start your own business or invest in any of the existing companies.
There are several business ideas without any investment that you can also start now if you like this type of asset. And currency assets cover foreign currencies and cryptocurrencies.
But among all, physical assets are the most profitable and have lesser risk factors. And some of the most lucrative physical assets examples are as follows.
- Real estate and land
- Commodities, metals, and oil
- Collectible and bespoke items
What Are Physical Assets?
In simple terms, anything that is an actual property and has a physical presence is a physical asset.
According to their characteristics, these types of assets are divided into four main categories.
- Tangible assets like land and real estate
- Real assets like gold
- Hard assets
- Productive assets
Land and real estate are the best physical investments even today. But yes, it needs a significant initial investment.
However, you can accumulate that even if you are a stay-at-home mom, as there are many lucrative business ideas for women available these days.
Why Physical Asset Investments Are Important?
If you observe the current economic scenario around the globe, almost all governments are now providing fiscal stimulus to revive their economy.
But even in this tough time, physical assets never lost their value because,
- Real estate and land offer a better value even in economic uncertainty
- Commodities and precious metals like gold have lesser volatility and stay stable even in inflated economics
- You can hold both physical and tangible assets without any extra cost
Inflation is directly proportional to the higher interest rate. And the interest rate is inversely proportional to stocks and bonds.
And that’s why paper assets are not stable in an economic crisis. So, physical assets are the best assets to invest in in 2023; no doubt about it!
Types Of Physical Assets To Buy
There are several types of physical assets that you can try your hand at this year. However, three main categories assure a better profit than others.
- Private, family-owned, and rental properties
- Land and farmland
- Gold, silver, and other precious metals
While it is not counted amongst physical assets, investing in yourself creates the best asset possible. You need to concentrate on high-paying skills to be in trend!
Best Physical Assets to Invest In: Real Estate
We all are worried about knowing what is the best asset to buy in these challenging times, isn’t it? And every investor and economist will tell you that the answer is real estate.
Don’t forget that Donald Trump started as a real estate guy and became the president of America. Yes, it is the power of investing in real estate.
1. Single-Family Homes
If you talk about the first physical assets of a person, you talk about family homes. It is where we grow up and spend most of the time.
And it may be a bit surprising, but it is one of the best tangible assets possible. You can start buying foreclosed homes at lower prices.
Besides, you can also directly take part in bank auctions where they sell out properties linked with non-performing loans. You’ll get family homes at much cheaper rates that way.
Learn how you can budget for home buying and maintenance. (including tips from 20+ experts.)
2. Primary Residence
As we have already said, houses are still the best physical assets to buy this year. So, your actual residence can be your best asset.
But try to stick to a property that doesn’t have depreciating value. Keep it simple and invest in townhouses, pre-owned homes, and condominiums.
If you can find and invest in any appreciating property, it can effectively safeguard you from economic shocks. Residential houses are also a great tool to keep the impact of inflation at a minimum.
Needless to say, lands are the best tangible investments for 2023.
It is also a unique asset that is fixed in number (no one can create new land on this blue planet) and will never lose its value, even in an economic crisis.
The world population is constantly rising. However, the total landmass is fixed. So, the price of land will automatically surge with the passing of time.
But yes, don’t buy inflated properties and try to seal a great deal from land auctions.
4. Rental Properties
Let’s understand the difference between residential properties and rental properties.
While residential properties are developed mainly to live, rental properties are created solely to rent out. So, the profit is doubled!
First, it is an asset that will always have an appreciating value (according to the unsaid rule of real estate). And second, it will start generating money right after you buy it.
But remember to keep the rent above the monthly interest payment if you buy it with a home loan.
5. Apartment Building
Standalone houses can be pretty expensive, especially in urban settlements. So, if you want something under a moderate budget but as rewarding as a house, you can invest in apartment buildings.
Yes, apartments are one of the best physical assets to invest in this year. You can either keep it as an asset or can rent it out to make money.
But don’t spend too much on the interior if you solely count it as an asset. Instead, try to minimize the initial investment to maximize your profit in the long run.
6. Vacation Homes
Are you dreaming about buying a house in Hawaii or Santorini for your next staycation? Don’t wait and invest right now if you have sufficient funds.
Buying a vacation home, especially in an exotic location, can serve two purposes simultaneously.
First, it will create a safe place to stay for you and your family while eliminating hotel rent. And second, you can rent out your vacation home or can even list it on Airbnb.
And if you have that eternal wanderlust, you can easily earn money while traveling by renting out your vacation home.
We all need food, isn’t it? Even the most advanced computer and most sophisticated AI can’t feed us.
Instead, we need actual farmland and real farmers to grow crops on that. So, investing in farmland is a great way to have an always-appreciating asset.
It is also one of the best physical assets to buy that will start making money right after purchasing it. Even if you are not ready to grow crops all by yourself, you can rent it out or lease it to any farm contractor.
8. Commercial Estates
A commercial estate is a place you can rent out for business purposes, such as shops, restaurants, lawyer chambers, and warehouses.
It has the lowest operating cost for the actual owner and yields the most profit. But yes, it needs a significant initial investment.
But always stick to a property that has good connectivity. It is better if you can purchase it in special economic zones.
And if you can do that, it is one of the most rewarding passive income ideas that will never have depreciating value.
9. Industrial Real Estate
If you have a good investment portfolio and the right capacity, industrial real estate is the best physical asset to buy this year.
It is one of the most productive assets that you can rent out to giant corporations and factories. However, you may face certain legal and environmental issues in industrial properties.
It is also advisable to mediate the deal with companies through a credible lawyer to make the transaction hassle-free and safe.
And also, remember that owning this type of property is a big responsibility.
Best Physical Assets to Buy: Commodities
After tangible assets like real estate, commodities are undoubtedly the best physical assets to invest in this economic crisis.
However, not all the commodities are as lucrative as a few top players of the line. But for a very long time, the following big-4 have proven to be rewarding.
Do you know how the emperor of Mali, Mansa Musa, became the wealthiest man of all time, with a staggering net worth of $400 billion?
He has the most extensive gold reserves, that’s all! Yes, that’s the power of gold that has never lost its charm since ancient Egypt.
And now, you can also invest in gold, the most traditional form of investment known to humankind.
But it is better to buy gold bonds from banks rather than buy actual gold coins or bars for safety reasons. You also need to stay away from gold jewelry as it has a making cost on top of the actual value of gold.
Silver is not just for killing vampires like Van Helsing but also a great investment tool.
Jokes apart, silver is probably the most traded metal after gold in the history of humanity. And even in the 21st century, it remains one of the key tools of investment.
There are 99.999% pure silver coins and bars available that you can buy. Besides you can also buy silver bonds from your nearby bank or other financial institutions.
And like gold, don’t invest in silver jewelry if you consider it as an investment.
Even on the verge of Tesla’s electric cars dominating the global automobile market, oil is still one of the best physical assets to buy.
Crude oil (aka black gold) is a great tangible asset that has always had an appreciation value since the boom of the industrial age.
Trust me; the global economy still depends on the crude oil’s price per barrel. But the problem is that it is a volatile asset, and you can’t buy a good chunk of oil reserve.
Instead, you can invest in oil refineries and oil stocks (both future and options).
Even before iron came as a gift to humanity, people started using copper. And still, this metal has an incremental value.
Even if you carefully observe the techniques for demolishing a house, you’ll see that they remove the copper installation first.
This is due to the price and usability of this metal. However, it is not physically possible to buy and hold a great amount of copper.
Instead, you can trade copper through the commodity market. But yes, many people also invest in coins and bullion bars made of copper.
Best Physical Assets to Buy: Luxury Items
If you are looking for the best physical assets to buy but don’t want to indulge in conventional instruments, you can try luxury items.
A road less traveled, this one covers anything pricey, from a bottle of wine to an exotic watch.
14. Gem Stones
We all love it when we see Snoop Dogg or Lil Wayne flaunting their sparkling bling studded with diamonds and other gemstones, isn’t it?
But trust me, it is also a great investment tool besides having something shiny on your neck. If dogs are men’s best friends, diamonds are women’s BFFs!
However, there are many more gemstones like ruby, sapphire, emerald, garnet, spinel, alexandrite, topaz, and many more that you can buy as an investment.
It has a great resell value if you find the right auction to sell those.
15. High-End Watches
You will know the actual value of time when you know about the price of a luxury Patek Philippe or Louis Moinet! Watches remained as the key ornament for men for ages.
It is the ultimate symbol of aesthetic appeal and unmatched craftsmanship. And with the passing of time, these masterpieces from famous watchmakers become even more precious.
So, if you have a good investment amount, go with high-end watches. But don’t go for an iWatch for investment purposes. Instead, go for any mechanical watch with embedded gemstones.
You can consider limited edition pieces from luxury watchmakers, too.
16. Fine Wine
If you are an oenophile, nothing is as rewarding as a collection of fine wines from around the world.
And even from an investment perspective, wines are one of the best physical assets to buy even today.
However, you need to concentrate solely on the exotic and vintage wines rather than day-to-day stuff.
However, you need to have a cellar in your house to store the wines correctly. Besides, you also need to collect special-edition products from cult-status vineyards to fetch the maximum amount while reselling.
Best Physical Assets To Buy: Collectibles
Collectible items don’t have any value until you find the real connoisseurs of that item. And that’s why collectibles only sell at auctions or in closed-door biddings.
But if you can find the right kind of collectibles and invest in them, you can book an unprecedented profit!
17. Fine Art
Whatever amount of money you have, you can’t buy Monalisa (the iconic portrait of Lisa Gherardini) by the Italian polymath Leonardo da Vinci or the sculpture of David by Michelangelo.
Yes, fine art is that costly! And it is one of the only few items that always have an incremental value.
However, there are specific rules you need to follow while investing in fine arts. First, always buy an original piece certified and signed by the actual creator.
Second, always invest in the arts of emerging talent to get higher returns in the long run.
18. Classic Cars
Get this first; we are not talking about your Ford or Toyota here! We are talking about classic cars like the Aston Martin DB5 that James Bond drove in Goldfinger.
Classic cars from automobile giants like Ferrari and Lamborghini are the best physical assets to buy even today.
Besides, you can also collect old-school cars like the classic Volkswagen Beetle or the Pininfarina Azzurra. Even a 1998 Porsche 911 Turbo or a 1994 Mazda RX-7 can do wonders in car auctions. But yes, get your cars tested before you put a huge chunk of money into it.
If you are searching for the best assets to buy in your 20s, it is probably stamps that come top of the list. There are two kinds of stamps available in the open market.
First, the collectible-grade stamps are admired by the new philatelist. And second, the investment-grade stamps loved by millionaires.
There are people who have invested millions of dollars in investment-grade stamps and then doubled that amount while reselling those a few years later. You can also follow that path if you have the eye to spot the right stamp.
Coins are not just a currency tool but also one of the best physical assets to buy this year. Collectors love coins for two main reasons.
First, most of the coins are made of metals that have bullion value. And second, rare coins have their numismatic value.
But you need to invest in such coins that have a collector’s value. It is better to invest or purchase coins that are not mass-produced. The mint of every country offers exclusive coins to the public on special occasions. You need to keep your eye open for such offers!
Frequently Asked Questions
What is the best asset to buy?
There are two main types of assets: tangible and intangible assets. It is best to buy tangible assets that have a physical presence, such as land, a house, or even a bottle of luxury wine.
Tangible assets have incremental value and will become even costlier with time. According to our research, real estate, existing businesses, luxury collectibles, fine art, and precious metals are the best assets to buy this year.
What do rich people invest in?
Rich and ultra-rich (read billionaires) people invest in both physical and non-physical assets to diversify their investment profile.
They primarily invest in land, real estate, yachts, gold, and oil when it comes to physical assets. And in non-physical assets, they prefer bonds, stocks, debentures, futures, options, and commodities.
Conclusion – Best Physical Assets To Buy In 2023
Choose the asset to invest in according to your area of expertise. Even the best physical assets to buy can give you a loss if you don’t have sufficient knowledge of that particular asset.
Besides, you also need to increase your earnings from other avenues to create more wealth to invest in. There are now many ways to make extra money which you can explore!
So, that’s it for today, folks! Feel free to drop your suggestions and feedback in the comment box below!
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Hello there, I’m Siva Mahesh, an MBA Finance post-graduate and a Remote Career & Personal Finance blogger for 5+ years. Over the years, my work has been featured on US News, Entrepreneur, MSN, Yahoo Finance, GoBankingRates, EverQuote, Legal Zoom, The Simple Dollar, Databox, Business.com, Business News Daily, Venngage, Score.org, and more. My primary mission is to help our readers maximize their earning potential with legitimate online business ideas, side hustles, and passive income ideas we publish on Dreamshala. Currently, more than 100,000 readers from all around the world visit this blog every month and learn new ways to improve their finances.