Financial success is generally associated with saving money, contributing to retirement plans and earning a good return in the stock market. We tend to focus our energy toward managing our financial assets and neglect one of our most valuable assets, our human capital. Human capital is our ability to earn a living given our unique set of skills, experience, knowledge, ability, personality and wisdom. Our human capital or earning capability provides us with the resources to build financial assets.
The value of human capital is the present value of future earnings. Typically, as you approach retirement the value of your human capital declines, with fewer years left in the work force, and your financial assets increase. However, it’s never too late to focus on increasing your earning ability. Improving your ability to increase earnings can have a dramatic impact on your financial security and deserves as much focus as managing your portfolio.
Regardless of your age and the stage of your career, make a commitment to invest in yourself, your abilities and your career. Take a strategic, long-term approach to managing your career. Start by examining what interests you, where your passions lie and what you do well. Think about the best career for your personality, talents, abilities, skills and experience. Before making a big investment in your current field, decide if you should make a change. It’s difficult to succeed in a field that you don’t find interesting, meaningful or rewarding.
Once you are comfortable with your chosen career field, proactively seek opportunities to improve your salary and your position or to build your business. Make an investment in formal education or classes that may give you the knowledge and skills needed to move ahead. Challenge yourself to take on new responsibilities, learn new skills and ask for a raise or promotion once you have earned it. Invest the time needed to network and establish quality relationships with people who can help you learn, grow and expand your career or your business.
If you are nearing retirement, consider developing different career skills to work in a new field on a part-time or consulting basis to transition into retirement more gradually.
Additionally, investment in your physical and mental health can tremendously improve your productivity and effectiveness. Eating well, getting enough sleep and exercise will leave you with more energy and enthusiasm to perform at your best. Maintain a good balance between work and life. Spend time with friends and family, travel, read and engage in hobbies to manage stress and avoid burn-out. You need time away from work to stay fresh, broaden your perspective, stimulate creativity and consider new ideas and approaches.
Taking an active role in managing your career to maximize your earning capability and job satisfaction will provide you with the resources to grow your financial assets. Focus on yourself, your career and your investment portfolio to achieve financial success.