Co-Ownership 101: Creating Shared Incentives

Co-Ownership 101: Creating Shared Incentives

Property ownership is one of those ideas that is practically as old as civilization, in one form or another. A thing – a piece of land, an article of clothing, a house – belongs to one person, to another, or is rented or loaned from Person A to Person B through some form of agreement. 
This is a way of thinking about ownership that still generally works for physical assets like homes, cars, and other things. The concept of stock units, or shares, is a little more abstract: it represents the ability to own a piece, that is to say a fraction, of a business. 
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New Thinking About Ownership 
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With that said, new shifts in business models are changing fundamental thinking about the ownership of assets. 
Fractional ownership describes a situation in which several unrelated parties that can share in both the risk and ownership of high-value tangible things. This concept is resurfacing in new and interesting ways, as Forbes contributor Mark Hall explains | https://www.forbes.com/sites/markhall/2020/07/09/fractional-ownership/#5f5386585ad3 |. 
One of the older examples of this concept is that of vacation timeshares, which is nearly 60 years old. But timeshares are no longer the only examples of fractional ownership of physical assets.
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Fractional Ownership of Physical Assets
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If you can own a timeshare, why not partial ownership of traditional investment properties? Thanks to companies like Roofstock, it is now possible to own, for example, a 20% stake in a potentially high-growth investment property without knowing the other co-owners. 
The advantage of doing this is that there is less risk – although, granted, there is also less reward – than buying the entire property. 
But there is no reason to limit this concept to real estate. Companies such as Masterworks and Otis are allowing consumers to purchase shares not in land, but in fine art pieces or unique collectibles, items that may command great value. 
The upshot of this type of fractional ownership | Learn more on Commonshare | is that more people have access to smaller shares of ownership in more things. 
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Fractional Ownership of Stocks
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The stock market | Learn more on Commonshare | has traditionally offered ownership in companies with purchases of stock shares that represent whole amounts. 
This has now begun to change quite a bit. Multiple stock brokers, such as Schwab and Robinhood, allow users to purchase partial shares for as little as $5.00. 
The same is also true for cryptocurrency | Learn more on Commonshare |. With bitcoin, one does not need to purchase an ‘entire’ bitcoin: all one needs to do is purchase $10.00 worth. 
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Access vs. Ownership 
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Looking forward to the future, any number of fractional ownership opportunities are likely to burgeon and flower. The idea is spreading, and it is likely to continue to spread across asset classes, and that will likely have ramifications for the sharing economy.
The essential appeal of the fractional ownership model is the hedging and distribution of risk. The sharing economy already allows people to use what they want when they want without having to own things. The two are likely to produce useful synergies, and that will likely lead to reduction in waste. 
 

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