How are realized profits different from unrealized or so-called "paper" profits?

When buying and selling assets for profit, it is important for investors to differentiate between realized profits and gains, and unrealized or so-called "paper profits".Simply put, realized profits are gains that have been converted into cash. In order words, for you to realize profits from an investment you've made, you must receive cash and not simply witness the market price of your asset increase without selling.

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