Human Capital as an Asset

I recently read a post on the teachings of Benjamin Franklin by Tren Griffin at 25iq.  A great article about one of the most fascinating people in history.  In the section about important lessons Franklin taught us was the axiom “an investment in knowledge always pays the best interest.”

An overlooked part of most people’s assets is the role of human capital in their lifetime earning ability.  Many people view education as a means to secure a job, when really it should be looked at as an asset that is carried with you throughout your life.  Your ability to earn a living is the most important determinant in the standard of living you will have during your working years and into retirement.

Protect your Human Capital

We have insurance for our other assets (houses, cars, boats, etc.), but many people are failing to protect their most valuable asset, their ability to earn a living.  Health insurance protects us from catastrophic loss in the event of a health emergency, life insurance can replace income in the event of a death, and disability insurance can replace lost income from a prolonged illness.  So make sure that your biggest asset is protected by having coverage for your income generating ability.

Education Enhances your Asset

There may come a time in your life when you need to learn new skills to be competitive in the marketplace.  Furthering your education should be viewed as an investment in your future, one that once earned can’t be lost or taken away.  Over the course of a 45 year career, there may be changes in society or the marketplace that require multiple times when new training is necessary to be employable.(Just look at the lack of people on the NYSE)

Learning New Things Generates Enthusiasm for your Asset

Oftentimes we can become complacent in our jobs, and by learning new things it can give us a fresh outlook.  Putting new ideas into practice in our professional life can spark enthusiasm that may have been waning and help to make us more valuable to our organizations.  Enthusiasm is contagious!

You have a very important asset in yourself, and if you maximize your talents and continue to care for you human capital, you’ve got a tremendous asset.

Source: A Dozen Things I’ve Learned from Benjamin Franklin About Money and Investing | 25iq

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