Digital vs Physical Assets

Mar 23, 2022 | Finance, Inform, Invesment, Wealth

Not a day goes by where we don’t hear about bitcoin in the news or from a friend who has a hot tip on a new cryptocurrency. The past few years have seen an increase in the popularity of digital assets such as cryptocurrency and Non Fungible Tokens (NFTs). Direct shares and managed funds are also digital assets.

However, this does not diminish the value of physical assets such as property, gold and cash. There are certain societies in the world that accumulate gold because it is a status symbol. On the other hand, people in countries like Australia love to invest in property.

As taught in Finance 101 courses, diversification is a key aspect of investment and therefore, it is important to look beyond investment properties and consider other asset classes to spread your risk. With easy access to shares, managed funds and crypto, there is now a buffet of investment options to choose from, albeit with caution.

Let us understand the difference between digital vs physical assets.

Digital Assets

Similar to physical assets, they give you ownership in an asset but which is intangible, just like a JPEG image or PDF file. Shares, managed funds and cryptos are owned, stored and recorded in a digital format.


Transaction costs – Usually, brokerage or commissions on buying and selling digital assets is much lower than on assets like property.

Liquidity – You can buy and sell them instantly on the internet with just a few clicks.

Fractional ownership – You can now buy a fraction of a share or a bitcoin on a trading platform. Common investors now have access to investment opportunities that were previously available only to large institutions.


Fear Of Missing Out (FOMO) – Given the increase in popularity of crypto and shares along with their easy availability, people are trading on them simply to be a part of the hype rather than conducting with their own research.

Security – Storing and securing digital assets is becoming increasingly important as your account can be hacked into and you can lose your valuable assets. Even though an asset like crypto which is backed by blockchain technology is not hack-proof.



Physical Assets

Owning a physical asset such as property, gold, cash or even collectibles is not a new concept. They are tangible assets that give us a sense of security because we can see, touch and feel them.


Acceptability – Given the history behind these assets, they are easily accepted as a form of asset in all parts of the world.

Usage – You can live in a property or wear gold jewellery as these assets can be used for enjoyment purposes too.


High barrier to entry – There are high cost barriers to purchase physical assets such as building a 10%-20% deposit prior to applying for a loan to purchase a home. These assets are limited in nature making them expensive to acquire.

Liquidity – Apart from cash, other physical assets are not very liquid. It can take months to sell a property. Also, you cannot sell only a bathroom of your house if you needed urgent cash.

Next Steps

When deciding where to invest your hard earned money, it is important to consider your life goals, age, current financial situation, risk appetite and the most important thing – something that will make you sleep peacefully at night.

You should consult professionals including a financial adviser to help navigate you through the different investment options that suit your situation.

Do you have a question?

We’re here to help, don’t let your questions go unanswered. Complete your query below and we’ll respond.

Latest Blog Articles

Don’t leave your family’s future in the hands of a Crowdfund

In the world’s current climate, it has become apparent just how quickly and unexpectedly things can take a turn for the worst, leaving many families in difficult financial situations. This article highlights the importance of not only keeping your insurance updated, but also ensuring that your insurance is tailored to your lifestyle so you will never need to resort to crowdfunding. Don’t leave your family’s future in the hands of a Crowdfund

read more

Estate planning for your business

A more specific article focused on business owners having a written succession plan to ensure their personal wishes will be met if they die or are incapable of working. It addresses 4 important aspects – structure, agreements, insurances and Powers of Attorney. Estate planning for your business

read more

How much can we spend in retirement?

Having spent most of our lives accumulating retirement savings, it is easy to understand why retirees are fearful of spending their hard-earned nest egg. This article explains how an adviser can help evaluate the likelihood of achieving your retirement goals, as well as minimising longevity risk. How much can we spend in retirement?

read more

Financial Advice services are provided by Insight Financial Partners Pty Ltd T/A Insight Wealth Perth as a Corporate Authorised Representative of
Australian Unity Personal Financial Services Limited (ABN 26 098 725 145), AFS Licence no. 234459.