Imagine you own a house worth $50,000. You've lived there for twenty years, raised your children within its walls, and know every creaking floorboard. But without a piece of paper proving it's yours, that house might as well be worth nothing. You can't borrow against it, sell it easily, or pass it securely to your children.

This isn't a hypothetical scenario—it's the reality for billions of people worldwide. Economist Hernando de Soto estimated that the world's poor hold trillions of dollars in assets they cannot fully use. The problem isn't that they lack property. It's that they lack the rights to unlock its potential.

De Soto coined the term dead capital to describe assets that exist but cannot participate in the broader economy. A family might own fertile farmland, a small shop, or a sturdy home—but without formal documentation, these possessions remain economically invisible. They cannot be used as collateral for loans, cannot be easily sold to willing buyers, and cannot be leveraged to start a business.

Consider the difference between owning a car and owning a car with a clear title. Without that title, you can still drive it, but try selling it legally or using it as collateral—suddenly the car's economic value shrinks dramatically. Now multiply this problem across entire neighborhoods, cities, and nations where informal ownership is the norm rather than the exception.

In many developing countries, registering property formally can take years and cost significant portions of the property's value. So people simply don't bother. The result? An estimated $9.3 trillion in assets sits locked away, unable to fuel economic growth. The poor aren't asset-poor—they're documentation-poor.

Takeaway

Property without formal rights is like a battery disconnected from a circuit—it holds potential energy but cannot power anything. Documentation transforms assets from personal possessions into economic tools.

Banks don't lend money based on trust alone—they need security. When you apply for a business loan in a developed country, you typically offer your house or other assets as collateral. If you default, the bank can claim your property. This arrangement sounds harsh, but it's what makes lending affordable and accessible.

Without clear titles, this entire system breaks down. A woman in Lima might own a thriving street food stall and a house worth $30,000, but no bank will touch her because she can't prove ownership. She's forced into informal lending markets where interest rates can exceed 100% annually. The same assets that could fund her expansion instead trap her in a cycle of expensive debt.

When Peru formalized property rights for urban squatters in the 1990s, something remarkable happened. Newly titled households gained access to formal credit markets. They could finally borrow at reasonable rates to improve their homes, expand their businesses, or invest in their children's education. The property didn't change—but its economic power transformed completely.

Takeaway

A title isn't just proof of ownership—it's a key that unlocks the formal financial system. Credit access often determines whether a family can invest in a better future or remains stuck managing daily survival.

When you're uncertain whether you'll still own something next year, you don't invest in it. Why plant fruit trees that take five years to bear harvest if someone might claim your land tomorrow? Why renovate a house that could be seized? This uncertainty creates a devastating pattern: people focus only on short-term survival rather than long-term improvement.

Secure property rights change this calculation entirely. Research in Indonesia found that farmers with stronger land rights invested 20% more in long-term improvements like irrigation and soil conservation. In Buenos Aires, families who received formal titles spent 40% more on home improvements within years of gaining documentation.

This security effect ripples through generations. Parents with secure property can pass assets to their children, creating inherited wealth that funds education and opportunity. They can also use their property as a safety net during hard times, selling or mortgaging it rather than pulling children from school. Property rights don't just change what people own—they change how people think about time itself.

Takeaway

Security transforms behavior from survival mode to investment mode. When people trust their ownership will last, they start building for decades rather than just getting through the week.

Property rights aren't just legal technicalities—they're the invisible infrastructure that allows assets to generate wealth, enable dreams, and compound across generations. Without them, even substantial possessions remain economically dormant.

The good news? This is a solvable problem. Technology is making titling cheaper, governments are streamlining registration, and awareness is growing. Unlocking the world's dead capital doesn't require creating new wealth—just recognizing and documenting what already exists.