In a previous blog post we discussed the differences between human and financial capital. While financial capital often dominates conversations, we tend to overlook the crucial aspect of nurturing and maximising our human capital.
Recently, I found myself in a planning meeting with a couple whose sole income originated from one individual. This single income source was the bedrock of their financial stability, leaving little room for error or unexpected events. During the meeting I asked them “”Imagine a machine that holds the key to your future financial independence. Would you ensure that this machine receives regular maintenance and upgrades?”. As expected, they answered Yes.
Within this scenario, the person responsible for the high income assumed the metaphorical role of the machine. We then talked about “maintaining,” “updating,” and “protecting” this “machine”.
Physical Health: Our physical well-being can play a pivotal role in sustaining our productivity and overall success. Through regular exercise, embracing an active lifestyle with a balanced diet, we can help against the onset of physical decline.
Embracing Ongoing Relevance: A Continuous Journey of Learning In a rapidly evolving world characterised by constant technological advancements and the advent of artificial intelligence, the importance of remaining relevant is key. It is imperative to continuously update our skills and embrace new knowledge to adapt to the changing professional landscape. By embracing lifelong learning and acquiring new competencies, we might secure our current income and also stimulate our minds, warding off cognitive decline.
Preparing for the Unforeseen: Recognising the possibility of unforeseen circumstances that may impede our ability to earn an income it is important to have the right type and amount of insurance. By having this we create a safety net that provides peace of mind.
While financial planning traditionally revolves around pensions, investments, and monetary matters, it is important to expand our horizons and engage in more comprehensive conversations. By valuing and actively nurturing our physical health, embracing lifelong learning, and having the correct insurance this complements the time and effort we spend on our financial capital.