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What are Digital Assets and Why Should I Care?

August 06, 2021

A digital asset is anything that exists in a digital setting. This includes things like photos and videos to online accounts and cryptocurrencies. Even social media accounts are considered digital assets, and getting them into an accessible format is more important than you might think. With the introduction of online banking and virtually paying bills, the likelihood that you interact with digital assets is extremely high.

Still confused about what a digital asset is? Here’s a list of just some of the things that can be lost to the ethernet and with technology rapidly developing, the list is ever-growing.

  • PDFs
  • Online accounts, including Venmo
  • Social media handles
  • Photos, videos
  • Online statements
  • Audio files
  • Word documents
  • Graphics
  • Slide decks
  • HTML documents
  • Excel spreadsheets
  • Cryptocurrencies

Losing Your Digital Assets

Imagine going on a trip and having your baggage stolen. You’ve not only lost your physical assets like cameras and clothes and maybe even your phone, but now all of your photos of the trip are gone as well.

This very thing happened to National Geographic photographer Joel Sartore back in 2019, whose bag was stolen after a three-week trip to Indonesia. Hard drives filled with photographs of rare animals were suddenly gone. Sartore, desperate to get back the pictures, even took to Instagram to ask his then 1.5 million followers to join the search.

Luckily for Sartore, it was just camera equipment and hard drives. What if he forgot a password to an account like a San Francisco man who now can’t access over $321 million in Bitcoin? Or, what if he had passed away and no one could gain access to his accounts or hard drives due to lacking the passwords? Getting access may be harder than you might think. “State laws governing digital assets vary, and online sites that are concerned about user privacy have wildly different terms and conditions that sometimes lock out executors,” according to The New York Times.

Organizing and Supporting Your Digital Assets

So what do you do in order to safeguard against future heartache? For one, organization is key. Put passwords and log in information into a place that’s easily accessible but preferably not in a hackable location. Backing up digital assets is another way to help skip heartache.

For long-term planning, some people are now even including information in their wills that will help family members with digital assets. While the process tends to be tedious, they are setting up a system that won’t hurt them or their families in the future. Retirement also isn’t all physical paperwork anymore, with many plans going digital to save money and increase ease of access.

Ways to Use Digital Assets to Your Advantage

The usage of digital assets goes beyond simply organizing your passwords for future-proofing. Over the past few years, things like cryptocurrencies have made huge headway as a valid nontraditional investment opportunity. One of the newest nontraditional asset options for 401(k)s is through Bitcoin, a service Leading Retirement Solutions offers. 

Back in 2020, LRS was among four other collaborators who introduced the “world’s first Bitcoin 401(k) plan”, making it now legal for companies to offer employees the ability to invest retirement money into Bitcoin.  “As the world moves further into the digital age, it is vital that our services keep up and adapt to the changes,” said Kirsten Curry, founder and CEO of Leading Retirement Solutions.

Previously this was only possible through investment vehicles like IRAS, but with a Bitcoin 401(k), forward-thinking entrepreneurs and their employees can now make use of some of the benefits of a 401(k) while investing in the next generation of nontraditional investments. Specifically, benefits that may be difficult to secure through other investing methods such as tax incentives, company matching, and dollar-cost averaging.

For more tips and information regarding retirement plans, contact us.

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