Different asset classes - II

In continuation to type of asset classes

Real estate:

Real estate is the property consisting of land and buildings(if any) on it along with all the crops if used for agricultural land, minerals if it's used for mining etc.

Advantages:

Rental properties give fixed monthly cashflow.

There will also be appreciation in the property value over time.

Disadvantages:

There are costs involved such as property tax, insurance etc

Need to invest in huge sum at once to acquire the real estate property.

Cash/ cash equivalents:

It's the common asset class that most of people who don't invest have in common. The paycheck is given as this type of asset class.

 

Advantages:

Day to day transactions will happen through this asset class.

Any kind of asset will be purchased through this.

Disadvantages:

Inflation will make this asset class value worth less(not worthless but less worth)

This asset class is highly taxable.

Alternative investments:

As the name suggests, the investments that doesn't fall under any of the above categories are Alternative investments.

Example:

Investing in arts,

Collections,

Rare and ancient artifacts etc come under this.

Advantages:

Medium of diversification.

Disadvantages:

True value of products depend of how much opposite person wants to spend on them just to own them.