Michael Kitces: Your Mind is More Powerful Than Money | Afford Anything Podcast (Episode #64)

Your potential is unlimited.
I realize that’s the type of cliche that you normally find embossed in cursive script on the side of coffee mugs. It’s trite and impersonal and overused.
But it’s also true.
Your potential to earn and grow is limitless. But it’s not free. You need to invest time and money into developing your potential.
Your time and money are limited, though, and you could also choose to invest in market-based assets, like stocks, bonds or real estate.
How do you make that decision?
Are you going to invest in yourself? Or the market? Or both - and in what proportion?
How do you make these choices?
When you’re buying a few shares of a total stock market index fund, you have a generally clear idea of what you’re getting. You’ve seen the historic returns. You can predict, to a reasonable degree, the consequences of that investment over a multi-decade span.
But when you’re investing in yourself - e.g. learning a new skill, developing a side business, or taking a class - you can’t rely on the same formulas or models. There’s no chart mapping the historic returns.
Financial capital is easy to track. Human capital is harder to quantify - but potentially more rewarding.
Can you compare investing in assets vs. investing in yourself?
How can you make a smarter decision about your own path?
On today’s podcast, I talk to Michael Kitces - a financial planner, entrepreneur, and all-around smart guy - about this million-dollar decision.
Resources Mentioned:
Websites:
Kitces.com
How to Build Human Capital - www.kitces.com...
Amazon Prime - amzn.to/2jvxh8I
Google Express - www.google.com...
XY Planning Network - www.xyplanningn...
Interview with Laura Vanderkam - podcast.afforda...
Books:
Essentialism, by Greg McKewon - amzn.to/2jWYuQq
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[@pablo08034]

Kitces is such a genuine humanist. Logical but very real. Thank you.

[@Daymon88]

This deserves WAAAY more views, excellent show!

[@sistaschin]

I like your rational & take-aways, Paula!

[@dabigchina]

Late to the party, but I think the issue with this mentality is that it overemphasized the value of certification and formal training. An mba(the most valuable thing he mentioned) still has a very iffy value proposition unless you go to an elite MBA. Even if you do, you might hate being a banker/consultant, and that "human capital" becomes a liability (see student loans) that makes you hate your life.

[@laourelouche6121]

He said graduate degrees were last on his list and that he encouraged ppl to start with “low stakes” investments first such as toast masters, or inexpensive tech programs. I think the main takeaway for me was every situation is different - you know what may benefit you in your own specific situation.
For example, my friend works in education and gets a raise commensurate with how many college credits she has. So generally, although going back to school may not translate to guaranteed increased income, in her case, she gets a certain amount of pay increase with every additional college credit she earns, so for her returning to school is clearly worth it.
So bottom line is it’s case by case; there may very well be some people for whom the MBA (or insert any other investment/certification) would result in a relatively guaranteed positive pay increase, depending on the industry or even the niche they’re in.

[@charleshughes2487]

Human capital …..a liability ? 😮how do you evaluate ….obsessed on how to save “ a minute “ a day ? ( 4 hours a year ) the cumulative figure shows the real value of your time and effort ….
Did I spend too much money 💰 on saving a minute or two …it adds up ..? 😮