August 15, 2010 – Six days and it’s still not quite real yet, but there was a massive fire destroying the townhome where my daughter, son-in-law, and grandbaby lived. They are safe. This is the first, last, and most important consideration. But just about everything they owned was lost to the fire itself, or to smoke and water damage. We’ve been reminding ourselves over and over that it’s all just “stuff.” At the same time, it was a lot of stuff – computers, photos, family documents, clothes, furniture, jewelry. There will much rebuilding, both literally and figuratively, in the months ahead.
It’s said that nature abhors a vacuum, and the truth of this has never been so powerfully apparent to me. In that void created by the loss of their house and their belongings, a flood of community support has come pouring in. Many of the people offering food, places to stay, toys, and baby gear do not even know Elizabeth and Brad, but their generosity and concern has been no less genuine. When thanked, they push off our gratitude with a simple “I’m sure they’d do the same for us, if our situations were reversed…”
In the financial advisory world, we talk a lot about capital – how to invest and manage it. Usually we are referring to financial capital that is easily valued in dollars, and considered necessary for our lives and our goals, such as educating children or retiring comfortably. But here at Directions, in keeping with our vision of changing the way we talk about and view personal finance, we are enlarging our definition of capital to include not just investment and savings accounts, but human and social capital as well. Your human capital is the aggregate of your education, experience, skills, and passions, which can be put to productive use in the workplace, in return for earnings and benefits. Social capital, according to the ecological organization, EarthEconomics, is defined as “the underpinning and core fabric of communities,” providing benefits in the form of safety, security, friendship, and a sense of civic identity.
Both alternative forms of capital – human and social – are incredibly important as supporting and sustaining resources, and deserve as much attention and management as our 401(k)s or mutual fund accounts. For women especially, social capital is often an essential resource, because of the fact that their financial and human capital is often diminished by the years they spend out of the workplace, raising and caring for family members.
The hard fact is that women need more resources for their longer lives, but have less, in terms of financial assets, when they arrive in retirement. Elderly unmarried women – including widows – depend on Social Security for as much as half their income, compared to men for whom Social Security covers about 39 percent. For a quarter of unmarried women, Social Security is IT: their only source of income.
What does a financial planner say to a woman who faces a radically reduced lifestyle in her later years? “Well, I’m sorry but you cannot afford to live?” This is unacceptable. We are problem solvers, not buck passers. Even if our own clients are unlikely to be in these straits, they may have mothers, aunts, sisters, and female friends who need support.
To answer these women, we need to become more knowledgeable about available community resources: what is available to the elderly in terms of shared or cooperative housing? What medical services or clinics offer cost-free services? Is there a job bank or coordinator placing seniors in paying, part-time work? What, in other words, is the social capital that can provide safety and security to our women friends, clients, neighbors, even ourselves?
Because this capital does exist, even if the bank won’t give you a debit card to draw upon it. It’s our obligation to find it, grow it, and invest in it. Speaking for my kids, I can say that the goodwill and support of their community is now their greatest asset.
Click below to follow the Women’s Worth community on Facebook.
If you are a financial advisor, click below to follow the Directions Alliance community on Facebook.
