By: George Shirley. Opinions expressed are those of George Shirley and not necessarily those of RJFS or Raymond James.
In the first class of the Executive Certificate in Financial Planning program that I took, the professor asked everyone to describe their most valuable asset. Most people responded with the expected answers: house, 401k, investment account to which he replied…wrong! Your top asset is your future earnings ability. Put another way, the value of your human capital. “Hopefully by finishing this program, you will have increased your human capital by investing in yourself.”
Going through that program did teach me a great deal about incorporating investments into someone’s complete financial picture. That was one of the best investments I made in my own career, and the technical knowledge gained continues to be relevant to my practice.
Learning new skills, acquiring new knowledge, and gaining additional experience can dramatically increase your ability to earn and move you further up the ladder than you might have otherwise. The longer your potential work life, the more impact you will likely see. Becoming better at your job either through increased productivity or simply refining your craft can often increase your human capital by more than any other “investment” would increase. But there can be a reluctance to make such an investment given the difficulty in actually quantifying the “returns”. Human Capital does not have an exact balance the same way a retirement account might, but it should be reviewed often as much for the contribution to your overall satisfaction as the value of your future earnings.
While we all understand the benefits of exercise on the body, exercising your brain by using different areas, can also be a great way to improve well-being. Acquiring knowledge, whether it is for a hobby, volunteer work, or any other area-- especially in retirement—keeps your mind sharp and impacts every aspect of your life.
In fact, as described here
Lifetime learning may very well be a key component to a long and fulfilling retirement. Keeping the mind sharp and active should be part of everyone’s exercise regimen.
As a great coach once told me “There is no growth in the comfort zone, and no comfort in the growth zone.” When you feel as though you could do your job in your sleep, when you find yourself bored with the activities you once enjoyed, it is time to invest in yourself. It may be the best investment you ever make.
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