In broad terms, I hope to define some specific assets we all have, that go a bit deeper than simple finances.
At the end of the day, Human Assets are the most important, though we hardly treat them as such. The most important above all? Time. Dr. John Izzo puts it succinctly in The Five Secrets You Must Discover Before you Die:
“There are two fundamental truths of a human life. The first is that we have a limited and undefined amount of time—it may be 100 years, it may be 30. The second is that in that limited and undefined amount of time we have an almost unlimited number of choices of how to use our time—the things we choose to focus on and put our energy into—and these choices will ultimately define our lives.”
Human assets are internal. They are the skills and abilities we spend time mastering. Human assets are the knowledge and wisdom accumulated by experience. And finally time is the Human Asset that we can choose to spend on the things we deem worthwhile. How do we invest in human assets?
- Educate ourselves. Often the purpose of education is to build up knowledge that we can trade for money (via a job). But deeper than that, wisdom has no price tag, and it improves our lives both at the office and at home.
- Improve skills and abilities. These skills are limitless. From skills that produce joy (surfing, cooking) To skills that are useful, (fixing a car, repairing a wall, or roofing a house) these skills can directly improve our lives.
- Make time. Often we get carried away with whatever is in front of us, be it Netflix or Facebook. We are always hurrying, from work to practice to home again, but we never arrive.
It’s interesting to watch the evolution of social assets – on one hand, we are told professionally that business depends on relationships, to build soft skills, and to build your network. Yet on the other, I wonder if we have ever been so alone. Glued to a screen, we have let our social skills deteriorate in the wake of individual entertainment (hello Netflix binging).
Yet the relationships with those around us tend to be some of the most powerful forces we have in our tool belt today. Whether it’s to hold us accountable to a diet, or to find a potential spouse, or even to find an identity, our social assets are the relationships that we turn to for help. But how do we even measure our Social Assets?
- Spouse/Immediate Family. Your family is probably your most important social asset. They are the ones that know you the best, and for the longest time. They are often the ones who are there unconditionally, and want the best for you.
- The Inner Circle. These are deep – the ones you go to for guidance. They could be family or friends, mentors or accountability groups.
- Outer Circle. These are your friends and family that are in your life, but you might not consider going to for guidance.
- Professional Network. Colleagues, partners and acquaintances – these relationships are resources for personal and professional growth.
The methods of expanding your network and deepening your relationships is far beyond the scope of this post. But if there was hope I could convey for you, it is that you might be intentional with your relationships. That you invest in them, nurture them and care for them. I’ll leave you with this gem from Mitch Albom’s Tuesdays with Morrie:
“In the beginning of life, when we are infants, we need others to survive, right? And at the end of life, when you get like me, you need others to survive, right? But here’s the secret: in between we need others as well.”
I’d like to separate the word capital from the idea of money. Instead of dollars, Capital Assets are the things that we own that help use produce. A capital asset would be a lawn mower, an egg beater, or even a pen. These are the items that we own that we use to produce. Owning a lawn mower allows us to achieve our end goal – a pristine looking lawn. A solar panel is even better – it provides us value that we would otherwise have to work and pay the energy company for.
However, not everything is a capital asset. And the difference largely depends on how it gets used. A fishing boat, for the fisherman, is a capital asset. It allows him to provide fish to make a living. On the other hand, a fishing boat, in the hands of a widget salesman, not so much.
By investing in the things that help us produce or save increases our level of real wealth.
Simply put – this is the money we have. The cash in the checking account (or under the mattress), the change in your pocket, and the stocks in your investment portfolio. The tricky part about financial assets is that they have no value in and of themselves. Money has value simply because we agree it has value.
The hardest thing to remember about financial assets is that they are a means, not an end. They are a tool. If you were starving you couldn’t eat your money. You couldn’t build your home out of it. But since we agree that it has value, we trade it for the goods or services of another.
Financial assets, though they may give a sense of peace and security, really cannot be appreciated until they are converted into one of the other assets – into the freedom to pursue the career you love, to spend time with those you love.
What I hope to convey is that Real Wealth is not just the number on your bank statement. But just because Real Wealth isn’t just financial wealth doesn’t mean we cannot intentionally build it. That we can’t plan for it, and work towards it, or even (in some ways) measure it.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.