Should I convert paper gains to real assets?

Hey everyone! Are you getting nervous about the stock market like me? I’ve been getting more worried recently. The stock market keeps climbing while regular people struggle to pay the bills. The AI stocks are driving the market to the moon. This feels similar to the dot com bubble 25 years ago. (Wow, has it really been that long?) Back then, everyone and their mother were dumping money into any dot com company. Stocks went ballistic for a while, but the bubble inevitably popped. I’m pretty sure AI stocks are on the same trajectory. However, nobody knows when the bubble will pop. It could take 2-3 years before we see a burst. But when the market crashes, it’ll be huge. Are you ready to see your net worth cut in half? That’s what happened after the dot com bubble popped. I’m too old to relive that kind of hit to our portfolio.

Back then, I was young and made a good income. I panicked a bit and sold off some stocks, but I got back into the stock market. The big lesson I learned was you need to keep investing through the bear market. Eventually, the stock market will recover and DCA (dollar cost average) will give your investment a huge boost.

The situation is very different now. Mrs. RB40 and I are both retired. We are in the withdrawal phase. This time, we won’t have the income to power through a stock market crash. We’ll have to be smarter when the AI bubble collapses. That’s why I sold off some US stocks and diversified into bonds, cash, and international stocks. I am more conservative with our investment. We still need to stay invested because our retirement could last 40+ years. I feel pretty comfortable for now. We can survive a stock market crash without selling a lot of US stocks.

However, AI stocks continue to inflate and we have a lot of paper gains. I have NVDA, META, GOOG, and a huge amount in the SP500 index fund. I want to let it ride, but I want to cash out some chips too. Is it time to start converting some of that paper gains to tangible assets?

Tangible assets

The stock market is a great place to invest your money, but it feels like Monopoly money. Let’s do a little research and see what kind of tangible assets we invest in.  

Real estate

Real estate is the classic alternative to the stock market. Land and buildings usually increase in value over time. Many lucky homeowners are sitting on a ton of gains. In fact, housing is often the largest asset for American homeowners. Investing in a rental is also a good way to diversify. We have a duplex and a condo. These rentals have done well over the years. However, I don’t want to be a landlord forever. It’s too much work and responsibility. In a few years, I’d like to consolidate our real estate holdings into a single primary residence.

Sometimes, I think we should sell a bunch of stocks and buy a luxurious house. Let’s lock in some of that gain! Actually, I’m just kidding. I don’t want to live in a huge McMansion. I like living in a smaller house. It’s easier to clean and maintain. Mrs. RB40 wants a bigger and nicer house, though. (That’s why we’re remodeling our kitchen.) The problem with living in an expensive house is that our monthly expenses will explode. Utilities, property taxes, insurance, furnishing, landscaping, repair, and maintenance will be more expensive. Personally, I’d rather keep our housing expenses low than live in a McMansion.

Mrs. RB40 wins this argument, though. We will move after RB40Jr graduates from high school. I’ll give her full authority to buy our next primary residence. I have been unlucky with housing. My taste is too strange, and none of our primary residences ever appreciated much.

Anyway, real estate is a good place to park your money if you want to move some money out of the stock market. You can also invest in REIT funds like VNQ. That’s a good alternative to the stock market as well.

Precious metal

Gold prices have smashed through an all-time high. In October 2025, it cost over $4,000 per ounce. Not that I really care. The only bit of gold we have is our wedding bands. I never believed in gold. The stock market is a much better investment. However, gold can be a good hedge when TSHTF. Gold holds its value remarkably in times of unrest. Things are going to hell in the US. I don’t think we’ll have a civil war, but the billionaires are hell bent on dividing the population. You never know what’s going to happen. If it gets to that point, gold would be the easiest thing to pack in our car and escape to Canada. We’re only 6 hours away.

The problem with gold is, where the heck would I put it? I don’t feel comfortable with a chunk of gold in our house. If I hide it well, I probably wouldn’t find it again. I’m so forgetful these days. Maybe we could put it in a safe deposit box at the bank?  

Crypto

Crypto is intended to be a viable alternative to the stock market and the US dollar. However, it’s all speculative. Crypto dropped along with the stock market whenever Trump announced a big tariff increase. Dump and pump! Insiders are manipulating crypto to make millions of dollars. It seems like regular people will be the ones left holding the bag with this level of manipulation. The Trump family amassed over $5 billion from various crypto schemes. All that virtual money is coming from the speculative small investors and various foreign countries. I don’t trust crypto at all.

Also, you always hear about people losing their crypto password, hardware wallet, or hard drive. I would be one of those, for sure. This whole space is full of scammers. I’m not smart enough to get into that arena.

Art and collectibles

Wealthy people invest in art and collectibles, but I don’t know anything about them. I just see problems. Where would you store arts and collectibles? Also, you’d have to get insurance for these things. That will increase our monthly expenses.

Art and collectibles can be easily damaged. Our son is a clumsy teenager. I wouldn’t trust him or Mrs. RB40 around expensive artworks. They are so clutzy.

???

What are some other tangible assets that can appreciate in value? I don’t want to buy an expensive truck that’ll lose value or anything like that. Do you know any good assets?

Problems with real assets

Ugh! Converting paper gains into tangible assets is more difficult than I thought. The big problems are storage and maintenance expenses. The only thing I’m willing to spend money on is a nicer house. At this point, we probably can’t get a mortgage anymore. We’ll sell our duplex and rental condo to purchase a new house in a few years. We’d probably have to sell a bunch of stocks as well. Oh yeah, that’s another reason to avoid real assets for now. We’ll have to move them in a few years. That’ll be a pain.

If you’re reading this, there is a good chance you’re sitting on a ton of paper gains. Are you thinking about converting some of that into real assets?

Image credit: The AI overlord made the image for this blog post.

Please follow and like us:

The following two tabs change content below.

Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Joe recommends Empower for DIY investors. They have many useful tools that will help you reach financial independence.