What is your Human Capital?

Accumulating Wealth

We’ve all heard about our Financial Capital… the assets we’ve accumulated... but what is your Human Capital and what role does it play in developing a financial plan?


Human capital is simply the potential that you have to earn over your lifetime. The term, popularised by Gary Becker, an Economist of the University of Chicago, refers to a collection of traits and aims to understand the total capacity of an individual to gain wealth over a lifetime.


We define Human Capital as simply the present value of your income from your “exertion”, taking into account current income (salary, partnership drawings, etc.), 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. However, our Human Capital can change over time due to other factors such as breaks in work and greater than expected increases in earnings (as a result of new skills, a change of industry/career and other factors. Therefore, Human Capital is often greatest when we have the least amount of Financial Capital. Financial Capital includes those assets we accumulate that will generally provide an income stream to augment or replace our Human Capital. It includes investments, superannuation, business interests and even the expected proceeds from downsizing homes in the future.

Strategy First, understands the value of your Human Capital. We also recognise that each human is different and therefore has a different investment approach based on individual needs and objectives, whether driven rationally and/or emotionally.


Our philosophy is first to understand you as an individual investor with your unique perspective in relation to the rewards and risks of investing. We balance out the risk of not earning adequate returns over time with a structured approach to wise investment choices, to give you the best chance of meeting your financial goals.


We take into account Strategy design, Diversification and dimension-based investing, Efficiency, Rigour and a strong Structural Approach.

Strategy design

With a thorough understanding of you and your objectives in place, we use our expertise to design and structure a portfolio that is most likely to achieve your objectives.


Diversification and dimension-based investing

Strategic diversification gives you the opportunity for security while also harnessing opportunities for growth. We design a structured portfolio based on both defensive and growth broad asset classes as well as further diversifying into sub asset classes that match investment dimensions such as large, value and small companies in both domestic and global equity markets. This approach decreases expected volatility while also positioning for exposure to growth opportunities.



We take a comprehensive long-term view on managing both tax and trading costs. After all, your net return is the key measure of overall success.



We construct your portfolio with as much rigour and reliability as we can, understanding you and your individual needs.


A structural approach

We focus on the structure of your portfolio rather than on picking highs and lows in the market. We don’t believe in crystal balls, nor in actively managed portfolios. Academic research shows that over time, asset allocation has a greater impact on an investor’s experience than other factors. We therefore focus on getting the structure of your portfolio balanced over appropriate asset classes to meet your objectives. This gives greater confidence in achieving strong returns over time.


Strive to build both your human and financial capital for a successful future. Contact us and take the first step towards achieving your financial goals.

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