Seven Forms of Assets

The following is a brief examination of the seven forms of individual assets and how they may impact our quality of life.
Fullfillment is a balancing act. It requires attention and action.

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 the most valuable one. No one is ever able to take it away from you. It is the 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 self-knowledge usually 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 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 self-knowledge and relationship assets, which 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.

Most people have this 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 our society's current state of affairs, most of us fear losing this asset more than other assets.

Your education, knowledge, skills, and experiences comprise your know-how, and 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 respect 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 essential 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 ETFs and mutual funds or low-cost actively managed funds, you eliminate thousands of dollars of annual asset under management fees taken from your retirement portfolio. Reducing an expense has the same effect on your financial assets as adding income.

This is the perceived amount of time we have left in our lives to pursue our dreams and aspirations. In the absence of any unfortunate event, a young person would have more of this asset than an older adult. A person who squanders his physical health will most probably have less of this asset as well. It is essential always to be aware of this depleting asset when making any decision, financial or otherwise.

This category includes education, transportation, parks, recreation areas, and 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 pull the society together in a time of crisis. Independent media sources that provide unbiased news and commentaries are also precious shared resources. A sustainable and healthy environment dramatically benefits the community at large. Although our shares of social assets may be hard to quantify, we 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 used to protect and grow the social support of our community.

Count on your Strengths

Honest introspection is a crucial component of any planning process, financial or otherwise. Trade-off decisions are highly personal and should be considered in 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 significantly assist us in making the best possible choices.