If you lost all you assets tomorrow, what would you be worth? For people like Bill Gates, Warren Buffett or Alan Greenspan, quite a lot. That very same day, they could probably get 100 job offers from people all around the world. They have a lot of this thing called human capital (which is introduced, among other things, in a nice little book called Naked Economics). Like many important subjects, Buffett also has a great quote on this subject from the 2010 Berkshire Annual Meeting:
“Remember that your money can be inflated away but your talent cannot be inflated away. As long as you are the best at what you do you will be entitled to your portion of profits.”
Warren Buffet, 2010 Berkshire Hathaway Annual Meeting Notes
Human capital is great because nobody can take it away from you; not creditors, nor liars, nor the greedy fat cats on wall street (I couldn’t resist). There are so many great things about human capital like the fact that it’s a natural inflation hedge. No wonder they say education is so important. We just got to make sure we’re investing in the right kinds of human capital because like most things there’s a difference between the price you pay and the value you get.