We live in a world where money and ownership are largely digital concepts. When you log into your online brokerage or retirement account, all the assets you see there – stocks, bonds, REITS – exist only as 1s and 0s on a database in some distant server farm. Physical stock certificates and bearer bonds are rapidly approaching extinction. Even that traditional bastion of tangible, discreet wealth, cash, is slowly transitioning to a digital-only form.
While digital registration and ownership has proven to be a boon to people in terms of convenience, it also conceals a dark side. That singular drawback is the loss of privacy and control we face from having our all assets, records and bank accounts stored in the cloud. Our personal financial data and digitally-registered assets can be compromised in a variety of different ways, something that is not possible with more traditional forms of discreet wealth.
For example, hackers and organized crime syndicates have proven very adept at bypassing the security protocols of banks, corporations and even governments. Any personal information gathered can then be exploited to surreptitiously transfer our digital assets into the hands of criminals. Alternatively, hacked personal information can be sold to the highest bidder on the darknet, leading to identity theft.
Another risk to having all your wealth stored in digital form is the rising litigiousness of American society. It is estimated that the annual cost of civil lawsuits in the U.S. is $239 billion. Unlike criminal cases, in the United States anybody can bring a civil lawsuit against you for any reason, no matter how petty, mean-spirited or false. But one commonality is that the target is almost always money; individuals with valuable assets – especially those visible to prying digital eyes – should beware.
Even your friendly U.S. federal government can abuse the digital nature of modern wealth to help itself to some of your assets. There is a controversial law on the books, known as civil asset forfeiture, that allows police officers and federal agents to seize cash, assets or financial accounts that are suspected of having been involved with illegal activities. Civil asset forfeiture has most often been used against property involved in the illegal drug trade. But, the IRS has also unilaterally used it against small businesses it feels are not “paying their fair share” of taxes.
In any case, prosecutors, police and federal officials undoubtedly misapply this statute in order to enrich their departments. No criminal convictions, or even a criminal indictment, are necessary for the authorities to legally seize your money or property. And these assets can be easily looked up online by government agencies using the ubiquitous social security number. Once personal property, real estate or bank accounts are frozen, it can be time consuming and expensive to force the government to return wrongfully seized assets.
Most of us have come by our money honestly. We work exceedingly hard, for very long hours for our wealth. And we want to believe the money and assets sitting in our online accounts are safe from conmen, shady businessmen or cash-strapped government agencies. I wish I could assure you that was the case. Unfortunately, I can’t do that.
What I can do is offer you the next best thing: a solution. Fine art and antiques are discreet wealth that is both portable and tangible. They are one of the oldest ways of storing wealth. Art and antiques have been used as an effective means to preserve and grow wealth by prosperous royalty, nobility and merchants for hundreds of years.
One of the key reasons antiques are so well-loved is because many of them are eminently portable. A well-chosen collection of antique Continental European silverware or ancient silver Roman denarius coins might easily fit in a shoe box, but be worth more than a luxury car. Discreet wealth like this could easily be stored in a safety deposit box, a home safe or any other secure location of your choosing.
Perhaps most importantly, fine art and antiques give you the ability to build long-term wealth without all the digital registrations, online passwords and tax identifiers required for traditional assets. Art galleries, antique shops and antiquities dealers will gladly sell you a stunning array of fine pieces using your choice of cash, check or credit card. Better yet, the art and antique industry has a sterling reputation for complete discretion when dealing with clients, both large and small. Most will never disclose your personal information or purchases under any circumstances, unless required to by law. Art and antiques allow you to reassert your fundamental right to investment privacy.
Just imagine. You could have a $100,000 Surrealist painting hanging over the sofa in your living room, comfortably outside the vicissitudes of the digital world. Or you could own a $25,000 Art Deco platinum and ruby necklace safely tucked into a hidden wall safe. These tangible assets would compound for decades and decades at good, perhaps even great, rates of return. And nobody would suspect you owned them, unless you chose to reveal it.
Of course, not all fine art and antiques cost tens or hundreds of thousands of dollars. In fact, in my opinion, the most interesting part of the market is below $2,500. And, within that niche, many categories of fine art and antiques are available for the shockingly low price of just a few hundred dollars or even less. Discreet wealth may be hard to come by in the digital world, but in the world of art and antiques, it is still par for the course.
