Count your 'human capital' as an asset; watch your net worth skyrocket

You may be a lot wealthier than you think. Most people look at their 401(k) or other retirement plan, add in the value of other assets – their home, other investments, savings, etc. – then subtract their debt to get their net worth. After the housing-market bust and the bear-market rout of recent years, that number may look painfully small.

But what's the value of you? That is, how much are your future paychecks worth? That number is your "human capital" – and some experts say it should be a key part of your overall financial planning.

Financial planners also incorporate the idea of human capital when they help clients prepare for the possibility of disability, and whether someone's skill sets would be transferable to another profession or career, [said Dan Drummond, spokesman with the CFP Board]. Read more >

MarketWatch
Andrea Coombes
April 25, 2011