Question

What is a key advantage of money over other financial assets such as stocks, bonds, precious metals, or real estate? And why?

Answer 1

Define money.

Anything that is commonly used as a form of payment for goods and services, a unit of measurement, a store of value, and a standard for delayed commitments, is considered to be money.

What are the advantages of money?

Money has several advantages over financial assets such as stocks, bonds, precious metals, or real estate. These are:

• We can buy necessities if we have cash on hand. This is known as liquidity. The major benefit is liquidity because if there is enough of anything we desire, we can typically go and get it right away.
• Money has solved the main issue of lack of simultaneous desires and the related inconvenience with the barter system.
• A sufficient amount of cash can be kept on hand to meet your short-term needs because it will prevent you from accessing and taking money from places like investments.

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Answer 2

Money's advantage over other financial assets is that it has less fluctuating value, is more accessible, no extra charges.

• Money's value don't fluctuate much with market unlike stocks , real estate etc hence it's more reliable.
• You can't trade anytime or instantly with other financial assets as they first need to be liquidated and liquidating funds from these assets can take from days to even months and years in some cases. Hence they're less accessible.
• There are many other taxes and charges in purchase and sell of other financial assets . eg- Brokerage charge in stocks , sales tax in selling of gold , capital gain tax on real estate.

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