Human Capital is the Best Kind

Your wealth is more than what’s in your bank account.

There’s a whole class of non-monetary, and non-marketable wealth that I call Human Capital.

Health is the most important. Without it, you have nothing - no ability to enjoy spending anything, no ability to earn anything. What good is riches to a dying or imprisoned man?

Time is next - With time, which seems closely related to youth, you have the chance to learn, earn, and enjoy life.

Citizenship - What’s it worth being a citizen of the United States? Probably between $500K and $1M based on how many people voluntarily sign up for EB5 visas. Appreciate it. This applies to any developed country.

Skills, friends, family, reputation, and credentials. All of these increase your ability to support yourself and enjoy your life.

A healthy new graduate might be penniless, but can be absolutely awash in human capital. Their whole life is ahead of them.

I call it Human Capital because it has value, and it’s trivial to transform human capital into a stream of cash payments - just work. But I want to be completely clear: Human Capital is much better than Financial Capital.

For starters, it has value beyond money, and that should be obvious. And consider this: It’s easy to transform Human Capital into money, but it’s very difficult to transform money into health, time, friends, family, skills, etc.

There is another incredibly important aspect of Human Capital. It’s very secure. It’s very difficult to take away. You can’t lose it in a stock market crash, and you keep most of it even if you have to flee the country.

I favor Human Capital is better than Financial Capital whenever there’s a choice. That means - stay in school, stay out of jail, keep learning new skills, keep up with your friends and family.

It’s more important than any of the other advice on this site.