Financial Friday: If you aren’t making money, are you building capital?

Build Capital!

I want this blog to have a personal finance component, partially because I’ve been writing for a few personal finance sites and have the topic on my brain, but also because I think that such an important part of life for us compulsive messy planners is to plan for the financial future.

I’ve also been thinking a lot lately about the in-between times in life – perhaps you don’t have a job yet but you are aiming to get one, or you have a low paying job that you would like to eventually pay you more, or you want more freelance work than you have but cannot seem to find it. In every case, there is the temptation to rest easy in between work, or to just apply like crazy for more opportunities. I would argue that there are other, more valuable ways to build your future income.

Namely, I expand the idea of capital. Capital being the investable resources you have at your disposal that might at some point yield something. The traditional definition of capital would be your ‘nest egg,’ or whatever money you have to use to invest in ventures that matter to you. But I’d argue that there are so many other kinds of capital:

  • social capital, or the people you know and the people specifically who know you, trust you, like you, or want to see you succeed. This is sometimes discussed as the importance of “weak ties,” the people who aren’t your inner circle but who would still do you a favor or help you if they were given the opportunity.
  • educational capital, or the skill sets and knowledge base that you have. In the past, it was pretty much impossible to further one’s education without money to pay tuitions, but now with courses on sites like Coursera and Udemy, as well as many others, you can start the learning process during your “downtime” and end up with a skill that increases your pay in the future.
  • locality-driven capital, which might be social or might be otherwise. I’m referring to the ways you contribute to your city or town and to non-profits that matter to you. Have you volunteered with them? Have you cleaned up the streets in your neighborhood, which long-term makes property more valuable where you live and helps people take pride in their space?

Sure, you can wait until a great job comes your way, but you can also find an hour or two a day to meet new people, take a course online for free, or volunteer to make the place you live a better place. I’m trying to do a little of this every week, and I hope that long term it enriches my life, whether it also grants me more wealth or not.

What do you do to increase your various kinds of capital?

3 Comments, RSS

  1. My Way Home Life September 15, 2017 @ 10:20 am

    Love this! I agree–so important to invest one’s resources in the important people and places in one’s life. For me, that translates into volunteering at my church and in my community; I also enjoying educating myself about particular topics–perennial gardening, for example–with the idea that I may become a master gardener in future when my kids are grown and gone and I have more TIME. 🙂

  2. fredonna September 17, 2017 @ 1:19 pm

    You make a great point – one I think many people underestimate. For me, social capital has been the easiest to build and the most beneficial – and I stumbled upon that knowledge by accident! In my teen years, I started making it a point to be really good to everyone I met. That’s it. I didn’t go out of my way to make friends or stay in touch with everyone long-term or intentionally create a network. I simply started trying to treat everyone well in the moment. At the time, I just knew it felt great. I didn’t realize what huge dividends it would earn me over the years – from little things like free meals and clothes to big things like scholarships, jobs, raises, and promotions. I once read about a man who built his startup almost completely out of social capital, and based on my own experiences, I can totally believe it.

  3. lorin small September 25, 2017 @ 10:49 pm

    Your post reminds of this equation Time=money=freedom spend wisely

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