Long story short, my head and heart eventually reconciled and I set about selling everything, and this is an easier process than you might think today.
My personal choice and subsequent recommendation to everyone interested in doing the same was MusicMagpie.com. Fast, easy and a handsome payout. There may be competitors, but I don't know them and would encourage any spare moment you have to seeking out something that works best for you. They don't take everything, so good old 2nd-hand record shops and their moody, snobbish, high-brow proprietors are key. Thereafter, birthday presents, charity shops and plastic recycling. Or coasters? But that's a creative territory that I won't be addressing in depth in this post. Go nuts with it though!
I now have a modest collection of intangible music (I lost my digital collections shortly after selling everything, which of course is the biggest danger and was a nightmare realised when it happened), but frequently end up discovering new music as a result of being an avid user of such services as Spotify, Soundcloud, Myspace, Bandcamp, Reverb Nation, Last.fm, Facebook etc. Netflix and LoveFilm are great for films, along with iTunes rentals.
This process was fun, emotional, testing, challenging and very rewarding. And those rewards specifically? Clean Sheeted space creation and money in the bank that wasn't there to start with. I moved this into savings as it would have been a huge ironic waste of time and effort to spend it on more stuff. Now it's most likely to go on gig tickets and holidays - non-physical experiences that you can't put a price on that become memories and future conversations.
Suggested further reading Lighten the Load by Marcus Almond on Steven Pressfield Online.
Co-founder, The Clean Sheet