Why you need to gauge your human capital

Reuters:

The end of the year is a good time to illuminate your personal financial situation in a different way. Instead of focusing exclusively on financial capital – how much money you have accumulated – look at your human capital.

This calculus of human capital, which economists wonkily define as “the net present value of your lifetime earnings,” matters as much to your lifelong financial situation as the size of your nest egg.

When some people gauge their human capital, they find that they are not making enough money and decide to make some changes. That could mean starting a second or third career.

A former chemist I know has become a financial planner. A friend moved from technical support manager to business architecture analyst, a big jump from fixing computer systems to restructuring an entire company.

Read the whole story: Reuters

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