IMG_3142Understanding capital is fundamental to harnessing the power of capitalism and free enterprise. Most people think of financial capital (money) and physical capital (goods, buildings etc.) and overlook intangible forms of capital that are convertible inputs into financial and physical capital.

Combining different types of capital creates value. Creating value is the basis of creating wealth.

Labour is part of human capital, which employers harness to create and deliver goods and services that are exchanged in the open market for money.

Education enhances the value of human capital. So in order to raise the world’s standard of living requires greater access to better forms of education.

When a person commits to lifelong learning, they are investing in themselves and taking ownership of the fundamental building block of developing their own wealth.

This should be taught to children at school, and every employee should learn the basics of capitalism.

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8 Types of Capital