Since it originated in the 13th century, the meaning of the word “wealth” has changed drastically.
Once predicated on the abundance of material possessions, wealth today is something much more immaterial — yet no less powerful.
In the 1950s, access to stocks and bonds empowered many middle-class families to generate and manage their wealth beyond tangible assets and cash (or cash equivalents) for the first time. By the 1980s, derivatives and asset-backed securities offered another option for generating wealth from existing asset classes. And today, thanks to rapidly-developing technology and the globalization it enables, there is yet another wealth-generation resource on the scene: Digital assets.
With the development of each new wealth-generation asset comes enormous opportunity for investors who are able to capitalize on it early and often. And thanks to digitalization, cutting-edge investment is no longer just for the elite — but it is for the well-organized.
Keep reading to learn where you should be looking as wealth changes and which technology you need for managing your portfolio of assets as you dive into the world of modern wealth.
What Does Wealth Mean Today?
Though it may feel like a distant memory to the younger members of Generation Z, many Millennials in the United States were forever impacted by the 2008 recession and the resulting mistrust for traditional financial institutions.
While the majority of the Baby Boomer Generation feel they can rely on Social Security and pensions and Generation X trusts in their 401(k) savings, 66% of Millennials say they rely on their savings alone. Compared to previous generations, Compared to previous generations, Millennials are more financially savvy, looking for more and unconventional methods to generate wealth, and prefer to manage their wealth digitally.
Considering that Millennials make up the largest generation in the U.S., their behavior — combined with advancements in technological capabilities over the last decade — has led to the development of a new asset class that is shaping the way wealth will be perceived, generated, and managed in the future.
We’re talking about digital assets.
While digital assets can include “tokens” that represent assets that exist in the physical world, in many cases digital assets are those that exist in and are derived from the digital world.
Take cryptocurrency for example. Cryptocurrency is “digital or virtual currency” that exists only in the digital sphere. The value of a cryptocurrency is determined by supply and demand in the communities that use it.
While virtual wealth creation is a new concept, it is every bit as real as more traditional wealth creation methods. Just look at Tyler and Cameron Winklevoss, who became the first Bitcoin billionaires in 2017.
We’d be remiss if we didn’t mention that there’s plenty more to digital assets than just cryptocurrency. Other digital assets include company equity, asset-backed securities, security token offerings, trademarks, domain names, ecommerce stores and other websites, SaaS platforms, mobile applications, revenue-generating social media accounts, and more. In fact, a report from KPMG found that there are more than 2,000 digital assets with a market capitalization of over $200 billion.
Digital assets are ushering in a new generation of wealth creation — and they’re here to stay.
Why You Can’t Afford to Stay Analog When it Comes to Wealth Creation
If the chance to invest in the first-ever fully-digital asset class isn’t exciting enough for you — here are several other reasons you simply can’t afford to stick with traditional assets if you want to make the most of modern wealth-generation opportunities.
In the Wealth World, The Early Bird Gets the Worm
As the saying goes, fortune favors the bold — and that certainly rings true when it comes to opportunities to grow your wealth in the 21st century.
As we’ve explored today, there are various opportunities to generate wealth from digital assets. But no matter in which category you choose to invest, there will always be more opportunities available for those who move to take advantage of them first.
It’s true that digital asset investing isn’t “the norm” just yet. However, with regulators and early adaptors already paving the way for digital asset investment — it’s undeniable that they’ll become as widespread among investors as the stocks, bonds, and other assets that also seemed out of reach once upon a time.
Diversity is the Name of the Game
Adding cutting-edge digital assets to your portfolio of stable investment options can create more opportunities to maximize returns while minimizing risks as the newer, more volatile sectors in which you’re invested fluctuate.
But even while we recommend keeping an eye out for new investment opportunities, one of the most important aspects to remember when it comes to building a healthy wealth portfolio is balanced diversity.
Institutional Investors Are All-In on Digital Assets
Of course, you don’t only have to take our word for it that digital assets are here to stay — you can also take it from the big-time institutional investors that are already actively engaging with digital assets.
Fidelity has launched a digital assets subsidiary. J.P. Morgan Chase hired the securities trading software company Digital Asset Holdings to help develop their technology around blockchain (a wallet and exchange program for specific cryptocurrencies). Pantera Capital, a cryptocurrency-focused investment firm and one of the largest institutional owners of cryptocurrencies, has delivered a 24,000% return to investors since its founding in 2013. And if that isn’t enough, a report by the largely-respected investment advisory firm Cambridge Associates encouraged institutional investors to explore digital assets in their 2019 report “Cryptoassets: Venture into the Unknown.”
And with the right wealth management tech, you too can venture into the unknown — without going it alone.
How to Manage Your Wealth in the Digital Age
Even while wealth creation has changed, the fact that you need to manage it hasn’t. The necessity for wealth management is probably more important than ever with all the diverse asset classes on the market today.
Yet, a report by PwC shockingly found that wealth management is one of the biggest technological laggards in the financial services industry.
Not on our watch.
At Kubera, we support the 75% of high-net-worth individuals (HNWIs) under 45 who say they’re not just confident but enthusiastic about using tech to manage their money.
That’s why we offer the ease and familiarity of a spreadsheet combined with the power of high-tech integrations that enable you to add, manage, and optimize every single one of your wealth assets from cash, stocks, and bonds to vehicles, art, real estate, and — of course — digital assets.
If you’re reading this, chances are your portfolio is or will soon be a tapestry of wealth assets. We know how important it is to understand what’s going on across your entire portfolio so you can always see when it’s time to rebalance, make fast data-backed decisions, and take advantage when new wealth-generating opportunities arise. But, we also know how hard it is to actually do all of these things while juggling your day-to-day life. That’s why we built Kubera — the only portfolio tracker that allows you to manage your digital assets right next to your traditional assets, all in once glance and all in your native currency.
According to MyBankTracker, 53% of Millennials and 32% of Americans don’t spend any time at all managing their wealth.
It doesn’t have to be that way.
You can manage all your wealth in one place. You can monitor your net worth. And you can keep it all secure yet sharable with your most important beneficiaries. You can with Kubera.