Financial Poise
recording your assets

Recording Your Assets Now Will Cover Your Ass(ets) for Later

You’re at Risk if You’re not Recording Your Assets

From maintaining farmland to purchasing real estate investment properties to  owning jewelry to possessing all kinds of precious metals in general, or even delving into collecting wines and fine art and other valuables, having tangible assets can not only be a fun hobby to cultivate, but it may also be a great way to diversify your portfolio in case of economic hardships.

It’s not just enough to hold ownership over your investments. If you want to protect your assets against financial loss, recording your assets is paramount. Records and insure your valuables to hedge against headaches down the road in the event of physical loss, theft or destruction.  

Protect What You Love (Or, at Least What You Paid for)

The PatriotSoftware Accounting Blog notes, “Tangible assets are items of value that you can see and feel [such as] cash, property, and inventory…Tangible assets can be stolen or destroyed by fire, an accident, or a natural disaster.”

(By the way, there are also methods for recording your assets that are intangible, too. Says Entrepreneur, “[While] every pizza shop has an oven, not every pizza shop has the secret family recipe for the sauce that was handed down from your grandmother to your father and now to you. Without the ability to bolt these assets down to the floor, you’d be wise to develop a strategy to properly protect your intangible assets…”)

If you want to protect your assets against financial loss, recording your assets is paramount.

If your tangible assets are able to be stored, like jewelry or art, you’ll have to house them in a manner that keeps them in tip-top shape while they accrue equity.

Here are some steps to keep in mind when recording your assets and protecting your investments:

1. If it has value to you now, insure it now

This may seem like a given for such assets as your home or other real estate investments, but remember to also insure things like precious metals and jewelry, too. Your homeowner’s policy will only cover up to a certain amount, so if you have more expensive pieces, you’ll have to add an endorsement to your policy specifically for those items.

You may also be interested in “Gold Investments Remain a Stable Choice Despite Economic Uncertainty”

2. Leave a paper trail: Recording your assets with documentation

The documentation process itself might include taking photos or videos of your items to record the state they were in at a certain point in time. Then, the question comes in of how exactly to store these documents. You can choose to store them either in a safe deposit box at a bank, or store them at home.

Better Homes & Gardens mentions that you should keep a list of what’s inside your safe deposit box, and if you decide to store documentation at home, to invest in a fireproof- and even waterproof- storage option. Consider the perils that come with theft, advises Better Homes & Gardens, and think about opting for a wall or floor safe, or a safe bolted down tight.

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3. Provide evidence of ownership, and have your items appraised.

In the case of your unlikely and untimely death, you’ll want to list out your assets, “with a detailed description of each item and its fair market value,” according to LegalZoom. This includes listing intangible assets as well as your valuables and collections that are special to you, such as comic books, heirlooms and so on.

This process will require that you have your collections formally appraised. This is good practice in general, as having items appraised regularly keeps counterfeiting at bay.

4. Store your assets with care.

It’s common sense that once you put your money toward any tangible asset, you’re going to take good care of those items. You’ll monitor or cultivate the land you own; or keep up with repairs on the homes, buildings or other structures you’ve invested in; or protect your antiques in climate-controlled areas. But for things like art, gold, other precious metals, gems, coins and jewelry, the method for which to store those items is a bit less clear.

You may also be interested in “An “Eject Button” is not a Viable Real Estate Exit Strategy”

As for gold, “There are really only three ways to store your gold—keep it at home, use a bank’s safe deposit box or pay a third-party storage firm,” according to CNBC. Although storing gold in a safe deposit box is an inexpensive option, “The bank doesn’t insure the contents of a safe deposit box,” Mike Clark, president and general manager of Diamond State Depository, tells CNBC. “If you want to feel really comfortable and secure, you have to buy separate insurance, which can be expensive, and it’s hard to get for precious metals in safe deposit boxes. You also have the security risk going to and from the bank.”

The bank doesn’t insure the contents of a safe deposit box.

When it comes to storing wine, the process can get a little bit trickier than simply finding a location; it’s about temperature, too, according to Wine Folly’s Madeline Puckette. “Storing wine in an insured temperature-controlled facility is the best way to guarantee that your wine has excellent provenance and will sell,” shesays. “Think of it this way, if you were buying wine from auction, would you risk your money on a case that wasn’t professionally stored?”

Covering Your Ass(ets)

For more information on how to protect your valuables, do your due diligence and talk to your financial advisor on what additional steps you can take when recording your assets and caring for them so they appreciate in value in the future, and are protected in the event of an unfortunate event.

Remember, you can always prevent, but you can never undo. If your put money into a tangible investment, ensure you realize a return- one way or another. Your investments and your peace of mind are on the line, and it’s better to be safe than sorry.

Read more: Wealthy Still Investing In Stamps Amid Overall Slide in Value

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