Diversification is a cornerstone of personal finance. In order to grow and protect your wealth, your portfolio must be diverse. For many decades diversification simply meant a healthy mix of stocks, bonds, and real estate. Sometimes a precious metal, like gold, might get thrown into the mix, but usually we just think about the types of things we can keep in a 401(k) or buy to build a real estate empire.
But in a global economy in the 21st Century, you need more in your portfolio than “The Big Three.”
“The aim of diversification is to avoid each extreme, allowing investors to achieve high returns while reducing volatility along the way and making it unlikely that they will suffer from a permanent loss of capital. The primary means of accomplishing this is through asset allocation, the practice of dividing investment money into different classes of assets such as stocks, bonds, real estate and cash that will act independently of each other. Some more exotic assets include cryptocurrencies, gold, fine art, commodities and much more.”
Investing experts in the 21st Century acknowledge that there are more assets out there that can contribute to your overall wealth. The problem lies in asset tracking for these so-called exotic or alternative assets. Even many of the best portfolio trackers currently available haven’t bothered to include the ability for users to include alternative asset data.
When you think of alternative investments, things like art, classic cars, baseball cards and comic books might spring to mind. But consider some of the other potentially valuable assets:
- Internet domains: When you have a good idea, it’s not uncommon to buy a domain name. But do you realize its potential value? Whether you sit on it and sell it later for a profit or build a website that generates passive income, a domain can be an asset.
- Precious metals - Gold and other precious metals have been a “store of value” for thousands of years.
- Cryptocurrencies: Cryptos like Bitcoin & Ethereum are more recognizable as assets, but there’s a good chance you don’t consider them as part of your overall portfolio.
- Digital art: It’s possible to buy purely digital art — and sell it later. Websites can allow you access to potentially valuable digital art that you might not fully recognize the value of immediately.
- Private investments: Angel investing and private equity are a few examples of private investments.
- Intellectual property: If you have trademarks, patents, or other types of intellectual property, these items might have value later, and can contribute to your overall net worth.
- Loans to family and friends: When you make loans to others, stress-free tracking is essential.
- Heirlooms and Collectibles: Valuable items passed down through your family, including important documents and photographs, can have a lot of financial value as well as sentimental value.
While these types of alternative assets can add value to and diversify your portfolio, tracking their value can present a challenge. How can you get a total picture of your net worth when parts of your portfolio are missing from the equation? It’s not uncommon for digital assets, like domain registrations, to get lost in the shuffle. Out of sight, out of mind. You have these domains, but without a single place to keep all the information, they can get lost. Before you know it, the domain registration has expired and you lose it — without potentially receiving the value it has.
Get the whole picture
Your wealth doesn’t just lie only in what’s in an investment account or how much real estate you own. It’s also present in your crypto wallet, your art collection, and the domain you registered three years ago but haven’t had the time to work on it yet.
Kubera helps you put all of those assets in one place, integrating them into the full picture. On top of that, you can also keep important documents related to digital ownership, intellectual property, and other items in the same place.
With Kubera, everything related to your wealth is in one place.
Kubera helps you protect your wealth by keeping track of your net worth and storing important documents. It also ensures safe transfer of this critical information to your beneficiary, if something unexpected happens to you. Read the story behind Kubera.
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