10 Ways to Boost Your Human Capital

There’s something satisfying about looking at your bank statement–at least, that’s true when your balance is positive. It’s a definitive, measurable number that lets you know where you stand at a simple glance. The bottom line is a hard value; whether your statement says $100 or $50,000, you know exactly how much money you have at any given time.

Your net worth is an equally hard number. The value of your assets–like cash and most typical investments–is well-defined, as is the amount you owe on loans or lines of credit.

Net worth is an incomplete measurement of a person’s total financial worth, however. You’ll also need to consider the value of their human capital.

What is Human Capital?

The human capital is your skillset, education, collective skills, knowledge, and even creativity.

Unlike your bank account or net worth, the nature of human capital’s “assets” makes it hard to quantify. There are formulas that might result in a calculated result, but this tally will never be as well-defined as the balance on a bank statement.

Why Human Capital Matters

Human capital may not help you get that next mortgage or pay your bills, but that doesn’t mean it’s not incredibly pertinent to your net worth. In fact, your human capital is a critical component of your future success.

The more you invest in your human capital, the more you invest in yourself. In fact, every time you invest in your human capital, you are likely doing something that makes you a more attractive candidate for a job or promotion. For example, if you go back to school, take on a volunteer role, or even just network more, these are all things that can be attractive to an employer.

And if you’re a small business owner or entrepreneur with big aspirations? The more you invest in your skillset, the better the chances you’ll succeed.

Improving Your Human Capital

The great thing is, you can actually improve your human capital at any time. No matter your age, financial situation, or future plans, there are things you can do to bump this value significantly.

Here are ten ways to increase your human capital.

1. Get more education

There will always be a discussion about whether certain levels of education are worth the investment. Many people fail to look at the full picture. You may hear about ROI (return on investment), but many people have a much narrower definition than they should.

Your return on educational investment is more than the salary you receive out of the gate. It’s even more than all the income you would earn throughout your lifetime while practicing the specific skills you learned.

The process of continually seeking higher education keeps your mind active and working hard, improves your ability to learn anything (keeping those cognitive skills sharp), and opens your mind up to new ideas. These are all qualities that can increase your human capital.

The possibilities for learning more are endless. There’s the traditional route of going to college, graduate school, and beyond. Or you can look at a specialty program, like a coding boot camp. Vocational programs fit in here too. So do adult educational classes.

But increasingly people are turning to online classes to boost their human capital. If you need a boost for your career or just want to learn something new for the fun of it, check out Udemy and Skillshare.

Udemy has over 100,000 online courses in business, marketing, and software. If you’re looking to climb the corporate ladder or start your own company, you’ll want to up your human capital with some of their courses. Or if you’ve applied for a job that requires a particular skill set that you don’t have yet, like financial modeling in excel, sign up for a single class from them. If you’re more on the creative side, Udemy also offers courses in design, photography, and personal development.

Another great place for online learning is Skillshare. This is more firmly targeted towards creatives–so those who love design, photography, writing, and even lifestyle and animation. In addition to classes that could help you improve your creative skills (and thus your personal capital), they have classes on the business side too. Why? Because creatives still need to get paid, brand their products, stay on task, be productive, set their prices, invoice, and collect their money.

Read more about increasing your education to boost your human capital.

2. Automate your finances

If you are still looking at each of your accounts one by one, paying your bills as you get them, and investing only when you remember to, you’re missing out. You need to automate–set up the process once and then let it do its thing. That will free up more time for you to focus on the other parts of increasing your human capital.

Let’s go over two main ways to automate your finances – investing and saving.

Investing:

A lot of people get scared off by the complexity and risk of the investing world. They’ll earn income from their day job and dump it in a savings account until they need it.

Missing out on the world of investing is a mistake. The earlier you start in life, the better.

Investing is also a lot easier to do these days than ever before. There are companies that will literally do it for you – robo-advisors. And there are entire websites dedicated to teaching you how to put your finances on autopilot.

If you think you don’t have enough money to start investing, think again. You can invest with as little as $5 and certainly with as much as $1 million. Just jump in now – you won’t regret it.

So how do you start? There are so many great options out there, but three I like are M1 Finance, Acorns, and Betterment.

M1 Finance is a hybrid robo-advisor. You can set up an account with them and automate your investments–simply have M1 Finance pull money from a designated account each month and invest it for you. And if you haven’t crafted an investment strategy yet or aren’t sure what you want, M1 Finance lets you choose from different “pies” of investments (and who doesn’t like pie?).

Acorns helps the investor who has trouble finding the cash. You link your credit or debit cards to Acorn–anytime you make a purchase, Acorns rounds it up to the next dollar and takes the “change” and invests it for you. Makes it super simple. You’ll be investing any time you make a purchase and you won’t have to do a thing! If you’re worried that won’t be enough, you can also set up recurring transfers of as little as $5.

Finally, Betterment is known as the original robo-advisor that gives you the option to invest in exchange-traded funds (ETFs) that are packaged for you. Like the other options discussed, you’ll want to link an account to Betterment and set up a reoccurring transfer. This will allow you to invest each month without having to do anything.

Savings:

Empower will help you automatically save and all you have to do is spend a tiny bit of time setting it up. Then you can forget about it until you check into your budgeting app (you’re using one, right?) and see how your savings account has bloomed. One cool and distinguishing feature of this app is that you set your savings goal and the app creates a strategy to make it possible. How, you might ask? By monitoring your account activity, finding when you have extra cash and when you’re strapped for cash.

Chime is an online-only bank that offers simple, easy-to-understand banking. Like Acorn, when you use your debit card, Chime automatically rounds the charge to the next dollar amount and transfers the change into your Chime savings account. Another way Chime helps you save – they have way fewer fees than a traditional bank.

3. Get more experience

If you believe that your job is confined to what happens between 9:00 AM and 5:00 PM, your opportunities for advancement might be similarly limited. Instead, use your available time and resources to get more experience either in your career field or in a field that interests or could benefit you. Ask your boss for a new project. Talk to someone from a different department at your company and see if you can learn about their roles and plug into their work.

I’m a strong proponent for not making your job the only thing that defines you. However, by developing a work ethic in which you expend effort and achieve at levels beyond what is asked of you, you can increase your human capital.

4. Explore beyond your industry

When the housing market collapsed, thousands of mortgage brokers were forced out of their jobs. Many of these individuals didn’t have much training in any other industry, leaving them in a tricky situation. They had to trade in their six-figure commission-based incomes for low-wage sales training positions or wait for the market to return.

By acquiring skills in an industry that doesn’t fluctuate (due to market cycles or other external forces), you will have a higher human capital than someone whose job will always be a victim of circumstances. Even if your skills are simply established as a fall-back option, you will improve your financial stability and earning security in the process.

5. Get involved

If there is an issue you care about, seek organizations whose mission includes the advancement of that issue. Volunteering for a non-profit organization or speaking out to express your passion is a good way to increase your value to the world and your human capital at the same time.

Volunteering will help you gain knowledge and learn new skills while adding a nice bit of humanitarianism to your resume. In fact, volunteering can be a great way to test out a new career path–volunteers are expected to have some expertise, but not a ton. There are even non-profits whose mission is to teach you about that industry. For example, Oakland-based Grid Alternatives trains volunteers to install solar panels–it’s a way for those with no clean energy experience to get a foot in the industry.

If you don’t know where to start, check out idealist.org, VolunteerMatch, or go through your local community center or place of service for tons of volunteer opportunities in your area.

Once you start volunteering, you’ll meet other people who are looking to help others and better themselves. You’ll possibly make connections that will lead you to new opportunities, new careers, and new ideas in the future.

6. Improve your public speaking and presenting skills

If you are a good speaker or presenter, you’ll be several steps ahead of your peers. Someone with the same knowledge and technical skills as you who does not know how to perform in front of an audience will be placed at a disadvantage alongside you.

You can try out Toastmasters – a traditional path to improving public speaking skills – or look at the public speaking courses on Skillshare and Udemy.

Another choice is taking an acting or improv class. As an actor, you learn two important aspects that might not be covered in normal public speaking: presence, emotional communication, creativity, and the ability to think quickly on your feet. These are add-on skills that increase your human capital.

7. Cultivate your human network

In order to boost your human capital, you need to focus on the people you know and meet in two ways: breadth and depth. The more people who know you and are familiar with your skills and interest, the more opportunities you will have to, well, seek opportunities.

Not only should you expand your network, though. You should also work to cultivate your most important contacts. And if someone in your network asks you for help, say yes as often as you possibly can. You never know when you’ll be the one asking for help, whether in the form of pushing a project along or finding a lead on a new career.

And if you think only close connections are useful, the science shows that just isn’t true. Weak connections are more likely to help you find a new job, according to research. Reach out to those you admire on LinkedIn. Join forums that allow you to explore your professional and personal passions. Look for local clubs where you can learn new skills or share your skills with others.

8. Publish your thoughts

I’m a strong proponent of writing online, as it’s the easiest way to publish your thoughts. Luckily, certain methods of doing so can result in growth in your human capital.

Keeping a journal of your daily activities is not one of these methods unless you see journaling as a path to increased income. Most of the time, you should write within your field of expertise, and you should use the name you would like to be known by professionally. As your writing increases in volume and quality, your human capital will increase as well.

There are so many ways to get started. You can cheaply set up your own blog on a service like Squarespace or WordPress. You can also use a platform like Medium, which takes practically no time and investment to get started. Or write an article and post it to LinkedIn–your weaker professional ties might see it and start thinking about you for a position that just opened up with their company.

If you read trade publications, that’s another great place to publish your work. And don’t pass up a chance to write an op-ed for your local paper.

Once you get your name out there, you’ll be surprised how many people see it (of course, if you’re publishing on your own blog or Medium, you’ll want to share links on social media). As you position yourself as an expert, don’t be surprised when people come asking you for advice or offering you jobs.

9. Stay healthy

This is one of those “easier said than done” ideas – one that I should take to heart. It’s incredibly important to find time to be physically active and eat healthy foods.

While we all have stories of heavy smokers and drinkers who live beyond a hundred years, this is not the norm. If you want to increase your human capital, you want to behave in ways that are more likely to extend your life… and your quality of life.

In particular, you want to prolong the years of life during which you have the ability to enjoy life and earn income. Your health is not always entirely in your control, so you should control as many aspects as possible.

10. Start early

Whether you’re investing or looking to increase your human capital, you want to have time on your side as much as possible. This means getting started as soon as possible.

When it comes to investing, longer time periods smooth out risk and offer opportunities for compounded returns. With human capital, the earlier you start, the more time you will have to earn income using your acquired skills.

Additionally, the younger you are, the easier it is to shift gears and start a new career if necessary. This ability is a significant factor in the measurement of human capital.

Bottom Line

An increase in human capital is a worthy goal – it shows you believe in yourself and gives others the confidence to take a chance on you. It gives you the ability to earn more income regardless of external forces. You are able to take fewer risks with your investments and manage inevitable downturns easier.

Conversely, a lower level of human capital might result in unstable (or simply less) income over time. This could necessitate more risk in your investments in order to achieve a higher return. Human capital is therefore an important part of your total financial value.

Human capital should be factored, in some form, in addition to your other financial metrics. Alongside your net worth, income, expenses, cash flow, and a variety of other financial ratios, knowing your value of human capital will give you a comprehensive view of where you really stand.

How have you worked to increase your human capital?