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Difference Between Tangible And Intangible Assets

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Business is not for the faint hearted. Yes you got that right. Business means, risk, money, failures and success. But most important of all it needs patience. In business, long term assets play a significant role. It takes years to set up a business and it takes even more years to earn profits. Investing in long term assets is beneficial if you are into some business.

Firstly long term assets are those assets which you will liquidate at least for a year. So, you will need a good capital amount firstly in order to invest. If you have your own business then the following ways will guide you in choosing which long term asset to invest it and how long term assets affect business.

Tangible Assets: Property, plant and equipment (PPE) are the base of any business. From startups to established businesses pour in cash in some kind of property. They either use it for their own purpose or lease out. Both ways can garner profits. In cash any business needs to fulfill some cash shortage then the PPE is sold off.

Intangible Assets: Patents, trademarks, computer programs, investment in bonds and stocks are part and parcel of any business. Most businesses invest in assets such as stocks and bonds. Though risky, they represent ownership of a company. They provide dividends after regular period of time. Growth stocks reinvest the profits.

Buying another business also gives you right over trademark, patents and franchise. Therefore you can earn money even through another business. If you are not interested in starting your own company you can do a good business of earning money from bonds, retirement pension schemes or just plain old real estate.

REITs (Real Estate Investment Trusts) are like mutual funds. It was brought in by the Congress in 1965 to give people the opportunity to invest in upcoming real estate projects. If you don’t want the hassles of buying a property then the REITs is the perfect way to earn money. You can turn this into a good business too.

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