Allocating Your Most Valuable Asset — You

What is your most valuable asset? Your home? Not likely, even back in 2006. Your 401(k)? Doubtful, even when it was 2007. No, if you’re not yet glimpsing your retirement years, it’s likely that your biggest asset is you—and not just metaphorically.

Let’s say you’re only 30, with a degree or two and some experience under your belt. You’re making $70,000 per year. If you only get 3% cost-of-living-adjustment raises, you will crest a million in aggregate earnings in just the next 13 years.

Over the course of the next 40 years, over which you’ll almost surely continue working, you’ll earn more than $5.2 million.

Or maybe you’ve just celebrated your 40th birthday—the new 30—and you’re hitting your stride professionally, making $150,000 per annum. With only 3% raises, you’ll make more than $2.1 million in just the next dozen years.

(How’s that 401(k) looking again?)

You are your biggest asset.  It’s called labor capital, and it’s an asset all too often underestimated by financial advisors and their clients.

Read the rest of the article at Forbes.