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Quoted in the BBC on Human Capital – The Financial Risk You Don’t Know You’re Taking

Read the BBC Capital column titled The Financial Risk You Don’t Know You’re Taking


At its simplest, human capital is the asset that you, personally, bring to the table every day. It’s the embodiment of your potential to earn income. It can be risky and short-lived (think of an athlete’s career) or staid and predictable (such as a tenured professor).

Why does your human capital matter? When you have a sense of the worth of your personal effort and life’s work, you can plan smarter and take steps to avoid or lessen major risks in the way you invest or spend your money. Here’s the trick, though, to avoid financial quicksand: we must consider not only our personal value now, but also how we are likely to grow and change.

It’s important to constantly seek to expand your human capital. Think of it as a form of investment.

“Here is where most people fail,” said Robert Pagliarini of Pacifica Wealth Advisors in Mission Viejo, California. “They spend years of their lives increasing their human capital through school and college and then they get a job and forget all about learning, growing, and expanding their skills.”

“This is a colossal mistake,” he adds.


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