Investing In The Digital Age

How Millennials are creating, counting, and cataloging their wealth

by Jason Shelby


If we have learned anything from the past two years, it’s that none of us are untouchable. The pandemic spared no segment of society, striking young and old, rich and poor, world leaders and day laborers. It upended daily routines and put any major plans on indefinite hold. It also caused a shift in wealth, bringing poverty to some and unprecedented prosperity to others. Bottom line: we were all forced to prioritize those things truly important to us and protect them to the best of our ability – usually through a combination of stewardship and engagement with trusted professionals.

These sorts of symbiotic relationships are nothing new; however, the balance has shifted. Just as we are learning to take more responsibility for our health, rather than relying solely on physicians; individuals and families are becoming more empowered around the management of their wealth. This has affected not only the way they build and invest their wealth (i.e. through the creation and support of socially conscious companies), but how they plan to pass it along to their heirs.
The greatest challenge for any wealth advisor is to build a healthy portfolio tailored to each client’s unique needs and goals. Many focus their efforts on the need for financial assets such as equities for their low risk and easy liquidity. It’s no surprise then that many people, even those of high net worth, are often unaware of the true value of their physical assets and what’s needed to maintain them. As a result, they may be missing out on opportunities, literally right under their noses, to preserve and grow their wealth.

Digital tools have revolutionized estate management, allowing principals much more access to knowledge and hands-on control. One of these tools is EstateSpace: Estate Management Made Simple,™ an all-in-one solution that is so simple and user-friendly that even the most tech-averse folks can access information about their assets and make decisions around their management, on the fly and from anywhere in the world. EstateSpace also provides unparalleled security, so they can rest assured that their data will be protected.

Do You Know Your Own Worth?

The first mistake people make in managing their wealth is not understanding how much wealth they actually have. There is currently $504 trillion in unmanaged assets out there, primarily because their owners don’t know their value or are unaware that they even own them. Many people, for example, have a box of things that once belonged to a deceased family member in the basement but have no recollection of what’s inside. Even active investors who follow financial markets often neglect their physical assets. Sure, they probably know what their homes are worth, but often neglect items within them, such as antiques, artwork and even clothing. Sometimes these assets have a great deal of sentimental value; others are discarded and gather dust in a closet when they should be part of a comprehensive plan to grow, manage and transfer wealth to younger generations.

The first step is to take stock of physical assets and their current value. If you’re thinking this can be an arduous task, you’re right, especially if they are spread across multiple homes in different regions of the country or the world. The key is to be methodical, collecting the pertinent information. The ultimate goal is to safeguard this information on a digital platform, but you can start with a spreadsheet or handwritten binder, so long as everything is legible and organized. Anything is better than a hastily scribbled post-it note; anyone (i.e. your heirs) should be able to view your record and be able to make sense of them. Remember too that you don’t have to go it alone; there are companies, for example those accessible within the EstateSpace marketplace, that will come to your home to catalogue, assess and, if necessary, inventory your physical assets for you.

What is Your Passion?

If you’re a collector, be it art, wine, or rare cars, you know it’s much more than a financial investment. It’s an intellectual pursuit, a source of beauty, and even your calling card, gaining you access to new social circles. Never forget, though, that it is also part of your portfolio, and therefore as useful as a financial instrument to ease a cash flow issue or pass down wealth to your heirs. For example, if your daughter has always admired your collection of rare stamps, you can gift her with it during your lifetime or as a specific bequest upon your passing; however you can only do this equitably if you know it’s true value. Of course, your heirs may not be interested in such things, any more than you wanted that clunky ring you inherited from your Great-Aunt Ida. The point is that you owe it to them to compile the data they need to make informed decisions about their financial health.
When cataloguing collectibles, whether digitally or on paper, the file for each piece should include:

• Purchase date and seller information, as well as the current value (Artwork should be appraised every five years.)
• Photos
• Title, date, creator’s name and description of the item
• Provenance: this is a record of the piece’s previous owners
• Any identifying marks or inscriptions that will help establish provenance and may affect the value
• Condition of the piece (This should be updated annually.)
• Location: Is it stored in your primary residence? Vacation home? Office?

As mentioned, once you collect this information you should add it to a digital platform that allows you to access the information at a moment’s notice. Let’s say, for example, an art dealer makes you an offer for a painting you own. You can go into your phone and pull up the value immediately – no guesswork, no having to contact your financial advisor. If you do need assistance, again, you can reach out to appraisers and other trusted partners within the EstateSpace app, rather than spending the time and effort to vet someone new.

Be aware that most physical assets require regular, costly maintenance in order to retain their value. This is true of machinery and other items used for business, as well as personal assets such as properties and art or other collectibles. If neglected, they become write-offs or just a bunch of stuff to be carted off the next time you redecorate. However, if properly maintained, the same collections can actually grow in value and be an excellent way of preserving wealth for your heirs. Here too, all-in-one solutions are key, as they allow you to set reminders to schedule appraisals and maintenance within the app.

Protecting Your Most Valuable Assets

Ask almost anyone what their primary motivator is in accumulating wealth and they will tell you it’s providing for their family, now and in the long-term. As we have seen with some of the most famous families throughout history, even great wealth often does not last beyond a couple of generations. The need to address this has never been more urgent, as the Baby Boomers will pass down an estimated $68 trillion in physical assets over the next twenty-five years.

We may not be able to control a pandemic or political crisis; however, with trusted partners (like EstateSpace) we can become stewards of our physical assets and protect them for our children, grandchildren and beyond. Oftentimes, it comes down to communication – or more accurately, a lack thereof. The person who struggled to build the fortune often does not educate their children on financial literacy, because they don’t want to relive the past or discussing money is taboo. When the money is later passed down, the heirs have no idea how to manage it. They just assume it will always be there, which can lead them to make poor decisions or turn a blind eye to shifting circumstances. One of the keys to overcoming this is to get your kids engaged in the family finances so they can understand what it takes to earn and preserve it. This always starts with that potentially uncomfortable conversation about how much money they can expect to receive and the responsibilities that come with it.

Technology helps to further this conversation, particularly among millennials and Zoomers, who prefer to download information from a screen and communicate over texts. For example, all-in-one solutions such as EstateSpace create communication hubs, allowing stakeholders to send secure messages to each other in real time. Let’s return to the art example: by simply opening the app, your kids can go into the catalogue and learn about each piece and why it’s valuable.

They can also observe and learn from your interactions with others such as art dealers making you an offer. In understanding the value of and the ability to leverage physical assets, they will be able to create real security, not only for themselves but for future generations.

This communication hub also helps your nearest and dearest enjoy your physical assets. Let’s say your greatest pleasure in owning a beach house is opening its doors to family and friends. Whether you are in town or not, you can use the app to make your staff aware of their favorite foods, the bedrooms in which they will be most comfortable, and any other particular needs they may have. You can also check on the status anytime, without having to micromanage the situation.

Time: The Irreplaceable Asset

Digital tools also protect that other irreplaceable asset – time. Whether you are a property owner or a property manager, there are few things more stressful than managing renovations or new construction. You find yourself trying to manage several moving parts, sometimes from hundreds or thousands of miles away, with no real control over the speed or quality.

Digital tools help alleviate that stress by providing one-stop, round the clock access to the status of the properties and facilitating communication between you, your staff, and outside service providers such as architects and construction crews.

Finally, all-in-one solutions also help to clarify the family legacy. Charitable giving, for example, is a way of expressing a family’s value and mission in the world. This is often a source of conflict among relatives, with the older generations committed to certain causes and their children drawn to others. Again, conversations are necessary, but digital tools then allow everyone to “buy in” – understanding the decision-making process and bringing their own skills and opinions to the table.

There are no hard and fast rules when it comes to building your wealth portfolio; each individual or family needs to find the balance that is right for them. For every principal, the key is to step fully into the wealth management role – this means not only engaging trusted advisors and other experts as needed, but utilizing all tools at their disposal so that can keep abreast of all their assets and value fluctuations, and communicate that information to those who will one day be responsible for them.