Greetings! I’m delighted to be blogging on Money Issues for VibrantNation.
As a certified financial planner professional I talk about “assets” and “liabilities” with clients all the time. Traditionally we think of an asset as something that has monetary value. You own it. You could sell it. It might generate income. Liabilities are the minus column. The debt we owe. The mortgage, the credit card, the equity line of credit. When we subtract what we owe from what we own, we come up with that NUMBER: Net Worth.
What interests me is how often we judge our personal worth by our net worth. We have stories attached to our net worth. (“Those SOBs on Wall Street last year cost me my retirement assets”, or, “I needed to remodel the kitchen so we took out an equity line and then the real estate market tanked”, or “I should have started saving younger”, and so on).
Fifty-four years of life and 29 years of working with clients have taught me that there are more types of assets than money. And that over our lifetime, especially in the second half of life, we can’t thrive with just the financial asset. Here’s a list of the kinds of assets or capital that, IMHO, help us lead thriving lives:
- Financial Capital – cash, investments, annuities, property that can be sold
- Human Capital – knowledge, skills, expertise, work experience, training, education – represents our capacity to earn income or barter
- Physical Capital – our current state of health; health history; genes; quality of our environment which contributes to our having energy and vitality to convert into purposeful living.
- Social Capital – intimate companion; close friends; active community life; acquaintances with shared interests; affiliations that offer mutual support, purpose and enjoyment.
- Spiritual Capital – a broad way of saying, one has found meaning, purpose and hope; wisdom; self awareness; clarity; empathy
- Geographic Capital – this could include a home that is loved and is convenient; access to nature; access to good health care; access to meet social needs; access if disabled; valued institutions and community structure/systems; transportation; access to leisure interests; cost of living is manageable
One of my clients, who I consider is living a thriving life, does so on a much more modest retirement income than many of my clients. But she is rich in all of the other types of assets so that she can thrive. Social Capital, Geographic Capital and Spiritual Capital are abundant for her AND, she is conscious of how much she can spend and where she wants to spend it. Her financial capital serves her.
We require at least some wealth in all of these resources, not just the financial, in order to thrive even in the face of uncertainty. That’s not net worth, that’s LIFE WORTH LIVING.
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p.s. I dropped your name on Gina's post, Barb. ;)
An interesting article that has me thinking about my ‘other’ capital’s. Thank you, I am in the process of reviewing and planning my retirement (13 years in the future) and I will consider these aspects as well as the daunting financial one.
Great to hear from you, LilTigg. It’s a great idea to think about all of these aspects, these forms of capital as you plan your retirement. Just like we think about saving money, what other types of capital do we need to grow and which kinds do we feel strong in already?
A great exercise for this to do alone or with others: Think about a time when you were in difficulty which you ultimately overcame (financial, emotional, relationship, work, etc.). What resources did you call upon? What types of capital?
All the assets together have been the core of what has kept us together and living. When one of the assets gets diminished temporarily another asset rises up to fill the void. You’re right all together they make life worth living. Thank you for sharing.
At 66, I live by all those “assets”.
I like what you wrote because it points out things that I try to thank God for on a regular basis. I am about to turn 59, I am employed on a part-time basis for the first time in my working life, I own a home that I have come periously close to losing at least once in the last 4 years, I am in good health but I have a non-functioning thyroid so I am overweight (but I think I’m losing thanks to a new eating regime I have started) and if I even BEGIN to think about the future, I can get stressed out pretty good. I live by faith, I know that the only reason I still have my home is because God My Father has helped me, that the only reason I have any job at all is because He gave it to me, and He sustains me through so very much sometimes! (If you knew the stories behind those statements, you would know this too!) For which I am grateful. But when I begin to worry about the not-so-far-off future as a senior citizen, I could get worried. I am told I can’t afford life insurance because of my weight, I can’t really afford to invest in my future and I have no retirement built up anywhere, and so much of what I am told is that it is “too late” for me to plan anything at all. BUT!!…I have a network of friends that is amazing! These are people that have been my friends (and I have been theirs!) for over 20 or 25 years! I am there for them and they are there for me should a need arise. They love me. I love them. Also, I graduated from college with my BS/IT degree when I was 52 (with honors) and since it has not opened the doors of opportunity I had hoped for, I am back in school now (on a scholarship, Praise God!) and pursuing Certifications. I oughta be real useful by the time I hit 62!
Anyway, I have a lot of the “assets” you mention above (except for the financial one – for now), and I liked that your blog points out how very much we have even if we are not financially weathy! Wealth can definintely be measured in more ways than in dollars! Thank you.