If you look at advancing in this world in terms of growing your “assets”, in many ways financial coaching and career coaching aren’t that different.
When you hear people use the word in relation to money, we tend to think about financial assets / financial capital. An individual’s financial capital could be made up of, for example, their stock holdings in Apple, the money they syphon away into a deposit account, and the gold coins they keep secretly hidden under their bed.
Some of these assets may grow strongly in value, some less so. But a person would know that these assets represent an economic resource that he or she can put to use at a later date. They make up the individual’s “portfolio”.
Another Way of Looking at Things
Rather than viewing your portfolio purely in terms of financial terms, how about factoring in human capital as well? Human capital basically reflects your mix of knowledge, creativity and skills that can be used in the creation of economic value. A lot of us don’t really factor this aspect in.
Suppose Mr Smith has been saving and investing money for years and has built up a tidy sum in his portfolio. He takes a look at his investment statement one afternoon and he’s very impressed indeed by the figure that he sees. But suppose also that by trade Mr Smith is also a VCR engineer, has been in that profession all his life and has no other formal training.
Well, in that context his broader portfolio might not look so impressive. His ability to earn income in order to improve his financial health doesn’t look so hot. VCRs simply aren’t where the future money lies.
Compare that with Miss Brown, who is a doctor, or Mr Jones, the teacher. Yes, there will be occasions when they probably are not being paid what they are worth, but there will always be a need for these professions and the skills they have to offer. And because of that, there is a lot of future economic value to consider.
Rethink Your Approach to “Asset Building”
So if you are looking for another way in which to protect your financial future think about your human capital. Think about what you currently have and what you may currently be missing. Factor that into the way that you look at your portfolio and your ability to grow it going forward.
Are your basic skills and industry going to still be relevant in ten years’ time? Let’s face it, few of us have jobs for life anymore, particularly when you think about industries from your childhood that no longer exist.
Are you focusing so hard on earning and growing your money now that you’re not thinking about your ability to earn and grow money in the future?
Don’t get left behind.