The “Total Wealth” approach to delivers a comprehensive plan covering:
“Human capital” consists of a person’s skills, aptitudes, networks, and abilities. It can be enhanced through training and experience – or eroded by poor health, disability, and neglect. The plan captures the value of human capital by estimating future earnings.
Saving converts the income produced by human capital into financial capital. How much to save, when to save, and which products and techniques to use are tactical elements of the plan.
Financial capital enables long-term wealth accumulation and cash flows during retirement. The plan spells out goals and constraints and recommends appropriate strategies for investments, spending, risk management, and estate planning.