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Are you a stock or a bond?

posted May 8, 2016, 8:52 AM by Tim Isbell

Our financial capital is the total of our saved assets, beyond the value of the home where we intend to reside in retirement.

Human capital is the present value of all future earnings. It is our health, knowledge, skills and motivation. Anything we do to increase our ability to earn higher future income is an investment in human capital. It's at its peak around age 25 and mostly gone by age 65. 

At best, we have about 40 years to convert enough human capital into financial capital to last the rest of our lives.

For how this impacts your asset allocation strategy, click on Human v Financial Capital.