Human Capital

We define Human Capital as the present value of your income from “exertion”, considering current income, expected growth in this income over your working life and a discount rate such as inflation.

Our Human Capital is often greatest when we commence our working life, simply due to time. This is also the point at which we generally have the lowest amount of Financial Capital (assets we accumulate that will generally provide an income stream to augment or replace our Human Capital). The chart below depicts the interaction between Human Capital and Financial Capital:

One of our main roles as your adviser will be to help you convert as much Human Capital into Financial Capital as you can, while ensuring you are meeting your lifestyle goals along the way. Accountability is the key to success in this area.

Our support for optimising your Human Capital can include:

• Managing cash flow, budgeting and funding larger expenses like school or university fees, regular holidays
• Regular savings plans designed to convert Human Capital into Financial Capital
• Assisting with the management of Employee Share Schemes, salary packaging etc.