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Capital Swaps

Written by: Bill Sherman on Friday, 25 July 2008, 7:30 AM

Recently, I talked about converting financial capital (money) into other forms of capital:

  • Physical capital–your stuff and assets
  • Human capital–education and experience
  • Social capital–your ability to locate and mobilize resources within your network

However, you can convert between any of the four forms of capital.

  • Want to transfer human capital into money? Get a job.
  • Want to turn physical capital into social capital? Say “yes” when your friend asks to borrow your bicycle for the weekend.
  • Want to turn financial capital into human capital? Take a college course. Hire a language tutor. Buy some books relevant to your career and study them.

Here’s one way to think about the four types of capital–they’re like different types of currency. Just like you can convert dollars to euros and rand to rupees.

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