The following is a brief examination of the seven forms of
individual assets and how they may impact our quality of life.
You can call this your spirituality, your true religion, your faith in
a higher power or the Great Spirit, your quest for truth, your
relationship with nature, self-awareness or any other name you wish.
Even if you are an atheist or an agnostic you may still possess this
asset. It is the bedrock of your emotional stability. It is what is
constant for you, independent of what happens in the external world.
It is the guiding light helping you make all your decisions. It defines
your self-worth. It inspires the conviction, enthusiasm and
perseverance you have to pursue your dreams and aspirations and
meet the challenges you face in life.
Of all forms of assets, this is by far the most valuable one. No one is
ever able to take it away from you. It is the form of resource you
have the most control over because it is the most personal one. This
asset has the potential to play a role in your well-being if you truly
appreciate it as an asset. The best thing about getting older is that
usually self-knowledge increases with age.
Our relationships with family, friends, community, business
associates, even our pets, are another form of asset. Some of us
consider it our most valuable asset (consciously or unconsciously).
Happiness greatly depends on relationships that are fulfilling, reliable
and based on mutual trust. Our financial decisions may impact one
or more of our personal relationships.
This refers to both physical and mental health. Physical health, as an
asset, depreciates with time. However, both our mental health and
lifestyle can certainly affect the rate at which our physical health
declines. Mental health is intimately related to the self-knowledge and
relationship assets, which in turn strongly influence the lifestyle we
lead. It is true that with this and most other assets some of us are
more privileged. However, it is also true that all of us are equally
capable of squandering this valuable asset just like any other
resource we are fortunate to possess.
4. Financial Capital
This is what most people have in mind when they refer to assets,
personal physical possessions and properties. Financial assets are
the most quantifiable of all our resources, and the ones with the most
liquidity. Given the current state of affairs in our society, most of us
fear losing this asset more than other assets.
Your education, knowledge, skills and experiences comprise your
know-how. Your income is directly related to how much the market
values your know-how. During critical economic periods, some of us
may discover that the market does not value our skills and work
experiences as much as we assumed. Automation, globalization,
outsourcing and economic cycles are constant threats to this asset
even for professionals with college degrees. This should be taken
into consideration in making any decision affecting finances.
It is important to realize that even the skills that you do not get paid
for are valuable, since they have the potential to eliminate expenses.
This is especially true during one's retirement. Imagine that you have
gained enough knowledge and confidence about investment and
personal finance that, with the help of a competent hourly or flat-fee
financial advisor recommending index mutual funds or low-cost active
management funds, you eliminate thousands of dollars of annual
asset under management fees taken from your retirement portfolio.
Reducing an expense has the same affect on your financial assets as
This is the perceived amount of time we have left in our life to pursue
our dreams and aspirations. In the absence of any unfortunate event,
a young person would have more of this asset than an old person. A
person who squanders his physical health will most probably have
less of this asset as well. It is important to always be aware of this
depleting asset when making any decision, financial or otherwise.
7. Shared Resources
This category includes education, transportation, parks and recreation
areas, as well as other publicly-funded resources or services. Our
collective social assets also include intangibles such as concepts like
democracy and a can-do attitude that may, in a time of crisis, pull the
society together. Independent media sources that provide unbiased
news and commentaries are also a prized shared resource. A
sustainable and healthy environment greatly benefits the community
at large. Although our individual shares of social assets may be hard
to quantify, we do feel their value if deprived of them. At local,
regional and national levels, there are many instances where the
returns on the investment of time, energy and financial assets are
maximized when they are used to protect and grow the social assets
of our community.
Count on your strengths
Honest introspection is a crucial component of any planning process,
financial or otherwise. Trade-off decisions are extremely personal and
should be considered under the light of past experiences, heartfelt
aspirations and concrete facts. It is also wise to remember that
trade-offs that directly affect more than one individual in a household
should be made collaboratively. This maximizes the potential for a
positive outcome and honors the value of each individual concerned.
The recognition of all the forms of resources we have at our disposal
will greatly assist us in making the best possible choices.