The term A.I. has come to mean Artificial Intelligence to most of us, but I want to make a very practical application during this season when we are taking stock of our finances in preparation for filing federal income taxes.  The A.I. focus of this discussion is Asset Inventory.  This conversation will not be a detailed how-to, but rather a general overview designed to spur us to take action.  Each of us will want to do our own research and fill in details that are appropriate for our personal situation.  Much of the content could best be displayed in a list, so feel free to create and customize your own.  With this introduction, let’s get started.

A simple definition of “assets” would include anything that has value and might be available to meet debts, commitments, or legacies.  I found this definition useful once I took a moment to unpack the components parts.  The first component is the commonly understood purpose of an asset – money used to pay debts that are owed.  The second component – commitments – is intriguing to me.  When viewed in the broad sense it might encompass current living expenses, financial goals, plans and desires.  Stated another way these are the voluntary commitments we make to ourselves and to others.  The final component, legacies, are the assets preserved for future generations.  

In a very real sense, all of life is supported by assets—spiritual, emotional, physical and financial.  Yet most of us rarely expend the necessary time and energy needed to assess our assets.  Now is a good time to break this pattern by taking a financial asset inventory.  We want to know three things:

  1. What are our assets?
  2. Where are our assets?
  3. How are our assets doing?

What are our assets?

Most of us would begin by listing salary, other income sources, savings, real estate, investments, commodities, oil, insurance policies, etc. The money systems or currencies of these assets might be expressed in stocks, shares, US dollars, other national currencies, gold, silver, other precious metals, diamonds, other precious stones, digital assets such as crypto currencies or NFT’s.  But what about things like intellectual property? Anything that has current or future value needs to be on the list.  

Now, let me mention some things we may not consider—small things but they all add up.  For example, every year billions of dollars in gift cards go unused.  All of us have restaurant gift cards or pre-paid debit cards, or merchandise refunds on gift cards.  These are definitely assets.  Recently, I made a call to the customer service department of a product that I order on a regular basis and discovered that I had several hundred dollars in commissions from this network marketing venture that I’m no longer actively working.  Wow! Unclaimed assets.  Nothing is more fun than finding and using these.

Where are our assets?

Now the rubber meets the road.  We have to roll up our sleeves and dig through records to document what we have.  Bank or credit union accounts, investment/brokerage accounts, Forex, Cash App, PayPal, online wallets or exchanges.  Go step by step.  Obtain all records.  Log into each account.  Identify all passwords and retrieve any forgotten the passwords.  Contact customer service if necessary.  Consider if some accounts should be secured with two-factor authentication. It’s worth the time and effort, even if it’s frustrating in the short term.  Document all the information in one place   All accounts must be accounted for!  List each one separately. You may want to find or develop a spreadsheet or worksheet to help you capture pertinent information.  

The final step (a topic for another discussion) addresses the “legacy” aspect of our assets.  While our financial information is private, some provision should be made to grant access to beneficiaries and trusted advisors or family members.  As a part of this process I believe everyone should investigate the benefits of a living trust.  

Making good financial decisions is impossible without the right information and proper documentation.  You may find money that you forgot about.  You may have new uses for old assets.  This process will take time so go slowly and deliberately.

How are your assets doing?

I might re-frame the question:  What are your assets doing?  Are they growing?  Are they producing income?  We are accustomed to working for our money, but smart people – wealthy people – make sure their money is working for them.  Assets should be continually assessed and upgraded.  The ones that were growing in value or producing good returns in the past may be lazy now – not working.  New opportunities come on the scene and warrant investigation.  For example, right now the digital investment craze is on.  We should begin to discover what it’s all about and determine our response to it?  Some may want to sit on the sidelines and see where the trend is going.  Others may want to dip a toe in the water.  Those with a large risk appetite or great sense of adventure (or frustration with an under performing asset) may want to dive into a new asset class.  The inventory process will naturally lead to thoughtful decisions about re-deploying assets to maximize our money

The bottom line is this:  we all need to find ways to multiply money.  We do this by taking inventory of our assets on a regular basis and through active participation in a community of like-minded people who are passionate about building wealth.  In community we find education, motivation and inspiration to set goals and achieve success.  So, as we step into 2022, I encourage everyone to take inventory and take control of our assets.