What are considered monetary assets?

Monetary assets refer to assets that are easily convertible to cash or that can provide liquidity in the short term. This includes cash itself, as well as checking and savings accounts where funds can be accessed readily. Money market funds also fall into this category, as they are designed to provide liquidity while offering a modest return on investment.

The nature of monetary assets is that they have a clear and actionable value that doesn't rely on market fluctuations to the same extent as other types of assets. While stocks and bonds can be considered financial assets, they might not be termed 'monetary' assets due to their price volatility and the time it often takes to convert them into cash. Real estate investments involve significant transaction times and costs, making them less liquid. Physical assets, like vehicles, possess intrinsic value but require appraisal to determine worth and generally do not offer immediate liquidity. Thus, the distinction lies in the degree of liquidity and ease of conversion to cash.