Many modern investors have various digital assets.
And even those who don’t yet likely soon will. After all, crypto is going mainstream, DeFi coins and related assets are becoming widely accepted, and non-fungible tokens (NFTs) are in the news on a regular basis.
These types of assets can be great for the health of your portfolio and overall wealth, as long as you’re able to manage all of them in your best interest, of course.
Today, we’ll guide you through doing just that with:
- A workflow for creating your own digital asset management system and
- A walkthrough of a modern platform that outperforms legacy tech every time when it comes to tracking non-traditional financial formats.
Let’s get started.
What are Digital Assets?
The term “digital assets” has expanded to cover a wide variety of types of financial elements.
Generally speaking, digital assets are a virtual representation of value. Sometimes these assets are tokens that represent assets in the physical world, but more often they exist entirely virtually.
Cryptocurrency is an obvious example. It’s a digital currency that lives only in the digital space, isn’t overseen by a governmental agency, and whose value is set only by supply and demand.
While crypto, DeFi, and NFTs are often-used examples, of course there are tons of other types of digital assets. Thousands, in fact, with a market capitalization in the hundreds of billions.
Some others that you may or may not recognize include digital properties like websites and domain names, platforms like ecommerce stores and SaaS software, security and utility tokens, equity, and even trademarks.
Now, let’s explore why it’s so important you get to know the digital asset class well.
The Value of Digital Assets is Cemented
However, digital assets aren’t just some “flash in the pan” despite what many thought when crypto first hit the scene.
In fact, with institutional investors getting on board en masse, it’s safe to say the value of digital assets is here to stay — and grow.
A survey of almost 800 institutional investors uncovered that close to 80% found digital assets appealing. In addition, nearly 40% had already added digital assets to their portfolios at the time of the survey, and the rest said they were planning to add them at some point.
What makes digital assets intriguing to professional investors?
For one third of investors, it’s their lack of correlation with other assets, making digital assets a great resource for portfolio diversification. For another third, it’s simply a passion for innovative financial formats. And for the final third, they see a major upside when it comes to digital assets.
Why You Need a Digital Asset Management System
Aside from taking advantage of the growing value of digital assets, there are plenty of other reasons to develop a workflow for managing your digital assets.
Keep Track of Any Fees to Avoid Overpaying
Whether you realize it or not, even what seems like small fees do add up.
Take for example the management fee that many investment firms charge — 2% of your overall assets. In just a few decades, this fee can absorb tens of thousands of dollars.
But with a system for keeping track of every one of your digital assets and any fees that may be associated with each, you’ll be able to spot fees like this and keep them under control before they eat up your returns.
Stay on Top of Expirations and Renewal Dates
Similar to fees, expiration and renewal dates are hard to keep track of when they rack up over dozens of different digital assets.
Keep important subscriptions or memberships from lapsing and ruining your gains — or keep the ones you meant to cancel from restarting and cutting into those precious gains.
Avoid Duplication of Assets
Is there anything more annoying than accidentally bringing a fresh gallon of milk home only to rediscover the one you just opened in the fridge?
Yeah there is — investing more in a digital asset you didn’t realize you already have your desired share of!
Avoid wasting your hard-earned money on duplicate assets that don’t fit into your investment plan with a digital asset management system that makes each investment easy to keep track of.
Keep Your Asset Portfolio Balanced
As the value of digital assets changes over time, something these volatiles assets are absolutely going to do, your intended allocation can easily become skewed.
This means you’ll need to regularly rebalance your portfolio to make sure your investment proportions are aligned with your risk tolerance and investment goals.
But how can you tell when it’s time to rebalance, and specifically which assets need to be addressed? Really the only way is to make sure they’re well organized from the start so you can see how each changes and how it’s currently contributing to your overall portfolio.
As for how often you should be rebalancing your portfolio, the popular wisdom is to check in on your allocation every six months and/or when any asset class has shifted in value by a certain percentage — 5% is a common benchmark to use.
Most Importantly: Remain Diversified
Portfolio diversification is the practice of investing in various asset types as a way to ensure your portfolio keeps growing, or at least remains steady, no matter how different asset classes fluctuate.
The more diverse your portfolio, the less likely you are to experience catastrophic losses even if the market goes sideways — which is something it seems to be doing plenty lately. It’s been shown that well-diversified portfolios do indeed rake in higher returns and encounter lower losses than those with narrow asset allocation.
In order to develop this level of diversification, it’s important that you’re able to see all your assets, digital and otherwise, laid out in front of you so you know into which type to invest next.
A Step-By-Step Digital Asset Management Workflow
If you’re ready to make the most of the rise of digital assets the same way professional investors are, here’s the workflow you need to put in place.
1. Create a List of Your Digital Assets
The first step of managing anything is understanding the breadth of what you want to manage. In this case, that means creating a complete list of all the digital assets you would like to organize and track with this workflow.
Knowing exactly how many and what kinds of digital assets you want to manage is also important for deciding if you want to — and if you even can — track your assets manually. In the next step, you’ll consider that decision even more carefully.
2. Decide What Kind of Management You’re Interested In
With a detailed list of all the assets you want to manage, you should be able to determine if you can realistically handle keeping all of them balanced, diversified, and otherwise optimized all on your own.
If you’re not up for the job, there are full-service investment management firms, roboadvisors, and even flat-fee management platforms that combine the benefits of both at a reasonable cost.
However, if you are interested in taking a more hands-on approach when it comes to digital asset management, the next few steps will get you there.
3. Employ Consistent Naming and Description Conventions
Metadata is data about other data that gives it further context. If you’re going to manage a bunch of digital assets, it’s important to thoughtfully develop metadata so you can better understand each asset.
Metadata should include important info that will impact how you manage your digital assets over time. Things like their age, any associated costs or passwords, what specific goals you have for them, etc.
Next, you’ll want to develop naming conventions that’ll help you find your digital assets once you have everything organized in one place.
Similar to how you would develop any file naming system, you should create a system when it comes to naming your assets. With a naming system that helps you tell the difference between similar assets, you’ll be prepared for future changes like adding new assets, getting rid of old ones, and so on.
4. Organize Everything With a Modern Digital Asset Management Platform: Kubera
Now for the final phase in developing your own custom digital asset management system — putting all your plans into place and all your assets onto one platform.
Kubera is a modern all-in-one wealth tracker created specifically for today’s investors with portfolios full of traditional, physical, and of course digital assets.
Here’s how to use it to manage everything from crypto to stocks to NFTs and beyond.
Create a Kubera Profile
First, visit kubera.com, use the Sign Up button in the upper right, and follow the instructions to set up your own profile.
And just like that, time to start tracking digital assets — and more!
Connect Financial Accounts
Kubera integrates with various financial aggregators to make sure you can connect all kinds of different financial accounts — crypto exchanges, bank and brokerage accounts, and tons more — all over the world. You can get a better idea of all the accounts with which Kubera connects here.
All you have to do is visit the Assets page, use the Add New dropdown, select the type of account you want to add, input your credentials, and watch your account value automatically appear and stay up to date on Kubera’s clean interface.
Add Individual Assets
For everything that doesn’t fit nicely into the above workflow, Kubera offers more ways for users to track individual assets.
Stock and crypto tickers, a special integration with asset experts like EstiBot and Zillow, and easy-to-use manual entry features make sure you can still track the value of every single asset — from real estate holdings to physical collectibles to digital crypto coins — as part of your overall portfolio.
Just use the Add New dropdown again to add in these assets and follow the prompts to make sure you include all the right info depending on the asset type. Remember that the value of some of these assets will have to be updated manually since they don’t have a live account to pull from the way something like a bank account does.
You can also add information about your debts and insurance to Kubera for a truly complete view of your net worth — which we’ll talk about in more detail just a little later.
Organize and Add Your Metadata
The next step in using Kubera for digital asset management is applying that metadata and the carefully created naming system you developed earlier. Just double-click an asset to change its name and use the page icon at the end of each row to open a screen where you can add notes and attachments.
And again under the Add New dropdown, you can also add sections to your Kubera profile to group similar assets together so it’s easier to view and understand your portfolio at a glance.
Set a Preferred Currency
With all your assets added and organized in Kubera, you can now choose in which currency you prefer to see them and the platform will automatically convert them for you.
This makes Kubera an especially handy financial tracking app for people who are either managing several different portfolios under a single profile or who move around often and need to see their portfolio in different local currencies.
Enjoy the View of Your Entire Portfolio
Finally, visit the Net Worth section of Kubera to see how all your digital assets and beyond are impacting your net worth.
The charts here will be vital in helping you understand how your assets are performing, how true they’re staying to your intended allocations, and where you can make adjustments to improve your net worth over time.
For an even more detailed walkthrough of how you can track your digital assets and just about everything else financial, this How Kubera Works page lays it all out in glorious, animated detail.
Or, even better, you can experience Kubera in full action with your own assets when you sign up for a free trial — or start an affordable subscription.
And if you’re already working with a wealth management pro, let them know about Kubera’s unique white-label option. We built it specifically to help the modern financial advisor, wealth manager, and family office deal with increasingly complex client portfolios and goals. Enjoy a more contemporary experience, at no additional cost to you, when your advisor works with Kubera’s customizable portal.