From my perspective, Emotional Capital brings richness to another form of capital: Intellectual Capital. Intellectual Capital is our knowledge, habits and skills and how we apply them to our Financial Capital. Intellectual Capital is simply what we know and how we apply our knowledge to our Financial Capital in the context of our Emotional Capital in order to build wealth. The application of Intellectual Capital to Financial Capital must be observed in the context of Emotional Capital, otherwise our intellect is no different than a wrench or lever. Intellectual Capital includes who I know, my ability to motivate and work with others to create wealth through them, technical knowledge and capabilities, my learned habits, and my ability to focus and apply discipline in my intellectual efforts.Financial Capital is comprised of the financial resources we have to apply toward building wealth. Financial Capital can be separated in a number of different ways; operating capital, available cash, underutilized assets that may be redeployed, borrowed capital, and reserves. Depending on the particular exercise or goal, we may at any one time be building all, none, or any combination of these types of Financial Capital. We may also expand considerable effort redeploying Financial Capital geographically, between generations, or between family members of the same generation. In his book, Family Wealth, Jim Hughes states:"Successful long-term wealth preservation lies in understanding that it is the growth of a family's human and intellectual capital that determines its success, and that the growth of its financial capital provides a major tool for achieving this success."While popular culture would have us believe that Financial Capital is the best and only measure of success, I disagree. It is simply the easiest of the three to measure.
