The Capital We All Know and Love
The last and final piece of capital that we have yet to cover is that of financial capital. Out of the personal, emotional and social capitals we’ve already discussed, financial is arguably the most straight forward. Having said that, not wanting to divert things too far into the realm of personal finance, this one will be kept pretty succinct.
To increase your financial capital, it’s a matter of providing value to the environment around you. Think of it this way, if you needed the trash in your driveway disposed of, you have a garbage man, if you need a bridge built, hire an engineer. Both of these instances involve solving people’s problems. It could also be in the way of the purchase of common stock which in this case would be providing finances to a company looking to expand it’s operations.
A Key Principal of Financial Capital
But it goes beyond just solving people’s problems, it also involves asking the question of how many people are capable of solving such a problem. Think of it this way: if you are manual labor, there are countless others that are able and willing to step in in your place with no issue. But if what you have to offer is a rare commodity, then the value of it is exponentially increased. Which is why an engineer is paid more then your average garbage man.
Moving beyond that, financial capital operates in a similar fashion to the other aforementioned capital in that one type of capital can be exchanged for another. For instance, the skills you have acquired, say a STEM degree plus an internship which accounts for knowledge. Using this knowledge, one can get an engineering job that lends itself to the salary that that job entails. Or else the referral of you via someone from your social network lends to that same job and salary. But I don’t need to beat a dead horse, the basic premises of capital, there are many different kinds and they are all interlinked.
Kingston S. Lim
November 24, 2021