It has been an interesting few months.
I struggled through the early parts of the pandemic with a sense of isolation and the disruption of everyday life. The past month, I have been reading “Atomic Habits” by James Clear and attending webinars on behavioral finance and practice management.
The common theme was mindset. Mindset can either hold you back or propel you to reach for more. It reminded me that we all have varying levels of human capital, and our mindset determines how we use and enhance that capital.
Human capital is the value of your ability to turn labor into earnings. It decreases over time, but if used correctly will translate into financial assets. It is not found on a balance sheet or net worth statement, but it is an important piece of a solid financial plan.
Your ability to maintain and improve your earnings potential will allow you to take on additional portfolio risk early in your career. Even if you are content with your current position, with no desire for advancement and additional responsibility, it is not wise to ignore your employment ability. I have worked with too many individuals who thought they had time to build a nest egg only to lose their job and have trouble finding a new position.
I have been extremely fortunate to have a well-paid, supportive spouse who has enabled me to reinvent myself multiple times. Here are some actions you can use to increase your human capital.
◗ Increase your education and experience.
◗ Explore beyond your industry.
◗ Get involved/volunteer.
◗ Improve your public speaking and presentation skills.
◗ Cultivate your human network.
◗ Take care of yourself, physically, mentally and spiritually.
◗ Be well-rounded.
◗ Know your worth.
◗ Find your passion.
◗ Develop a supportive network.
◗ Stay informed.
◗ Find a mentor.
◗ Build your personal brand.
◗ Become an optimist.
◗ Be flexible.
◗ Push yourself out of your comfort zone.
One way I pushed past my comfort zone was by networking. I used to cringe when friends encouraged me to “network”—until I began to understand that networking is about meeting people and building relationships.
Finding a variety of organizations that interest you allows you to cultivate and maintain relationships that vary in both breadth and depth. People do business with those they know, like and trust. It is important to remember to give in order to receive.
Networking can also help you become more well-rounded. Cultivating a variety of interests and keeping up with current events in the world as well as with your field of expertise makes you a more interesting person.
Stay informed by reading, listening, and attending seminars and events. Identify the thought leaders in your field and follow them on social media. If possible, work with your employer to attend industry conferences or trade shows. Expand your horizons and push yourself past your comfort zone.
Developing a personal brand is a vague concept. For me, it is about how you differentiate yourself and stand out in a positive way. One concept from “Atomic Habits” is that your identity is expressed by your habits. Decide how you want to show up in life and develop the habits that support that identity. These past few months have allowed me time to really look at myself and decide what habits to put in place to help me reach my highest and best self.
Developing our human capital will go only so far unless you know your worth in the job. If you don’t know the going rate for your profession, use the “Occupational Handbook” to find out what skills are needed and pay ranges. Also use Payscale.com and Salary.com as benchmarks.
As Ralph Waldo Emerson wrote, “What lies behind us and what lies before us are tiny matters compared to what lies within us.”•
Hahn is a certified financial planner and owner of WWA Planning and Investments in Columbus. She can be reached at 812-379-1120 or firstname.lastname@example.org.