Human and Financial Assets

To say 2020 has been an unusual year would be an understatement and the upcoming festive season will no doubt be different to previous years.

Some time ago I wrote about the importance of considering financial (savings, investments, pensions and property etc) assets and human assets (family, friends and purpose) in planning. The value of human assets has really been brought home to me this year, and the absence of family and friends during lockdown really made me value them all the more.

To lead a dignified and independent life from a financial perspective requires an income that increases each year with rising prices and one that outlives the individual (you don’t want to run out of money before you run out of life).

However,  to lead a “life well lived” requires the use of these human assets (relationships with family and friends, pursuing leisure activities, having a purpose in life – a reason to get out of bed in the morning and financial peace of mind when you go to sleep).

These human assets need monitoring/nurturing/maintenance as do financial assets. For example, if we let friendships/family relationships drift we can lose the importance of this closeness.  This can take effort, but for me this effort is more than worth it. Without a purpose in life we might become bored, it has been suggested that boredom leads to pessimism and pessimism leads to ill health.

I often say to my clients that money is a means to an end and not the end itself. It is not the amount we have that is crucial (once we have taken care of our basic lifestyle needs) but what we do with it – this links directly to our lifestyle/human assets.

So as we approach the festive season why not pause and consider whether your human assets are managed as well as your financial assets, as both are equally important for differing reasons.

Neil Rossiter APFS, Chartered MCSI, CFP

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