This is especially true if your expected future financial obligations are high.

What Is Human Capital?

Decisions regarding protecting your human capital with life and disability insurance should be made in conjunction with the overall asset allocation decisions in your investment portfolio. To learn more about life insurance, see Buying Life Insurance: Professional Competency Risk Your ability to earn future wages depends heavily on your professional competency. Becoming too comfortable with your career could pose a hidden risk to your human capital. Like many other valuable assets, human capital needs to be constantly monitored.

The Bottom Line To young and middle-aged investors, human capital offers inflation protection and is a very important asset that should not be overlooked. All investment decisions should take into account the characteristics of both your human and financial capital.

Your human capital should be protected with insurance and always open to further investment through more education and on-the-job training. Famed investor Warren Buffett once said, “The best investment you can make is always in yourself.

To read more about Buffett’s ideologies, check out Warren Buffett: Moscoso addresses human capital first, citing the work of Daniel Isenberg, who teaches at Babson College.

She zeroes in on four personality traits that allow entrepreneurs to: But Moscoso claims that in some ways, social capital and access to information can substitute for the support that financial capital provides.

It is the social network of individuals whom entrepreneurs surround themselves with–mentors, peers, friends, family, and other entrepreneurs–that adds value and promotes trust, reciprocity, and cooperation. Moscoso is writing in the context of entrepreneurial situations in which the state itself may be unreliable. But many in the U.

How Human Capital Affects Financial Capital

Entrepreneurs and their backers seem comfortable with the truism that “it’s all in who you know. But too much emphasis on the importance of social networks makes it seem like Silicon Valley, and other centers of innovation, are something other than meritocracies. Those who are trying to encourage entrepreneurship among people who have traditionally been excluded from the fast-growth, venture-backed world are actively looking at social networks as an area of focus.

Japan, Taiwan and South East Asia.