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Episode Summary:
Listen to the full episode on iTunes (and please leave a rating to help the podcast reach more people): E8: The 4 Capitals of Creation
Here are the 4 capitals of creation:
- Influence: authority and how much people trust you.
- Social: who you know.
- Financial: what you own.
- Cultural: what you know.
These capitals are a good way to measure how future proof you are and your yearly progress.
It’s difficult to progress in all 4 at the same time except for the newbie gains.
Focus on one at a time.
Consider which one is most important for you.
Don’t chase the money just because everyone else does.
Perhaps leverage money to chase one or two of the other capitals?
You can be anything you want to be but you can’t be everything you want to be.
Extreme examples of each capital:
- Financial: Uncle Scrooge. Lottery winner.
- Social: Godfather. Can get you favors or introductions with everyone.
- Cultural: Richard Feynman. Curious, smart, tries and fails. Never phazed by any challenge.
- Influence: Oprah Winfrey. Can get anyone to buy anything.
Most people overweigh the value of money because it’s the most available capital.
There’s not much tangible value in the other capitals.
Also, people who have influence, social and cultural capital may hide it well.
For example, you don’t want people to know you are part of the Illuminati.
The problems with focusing on just money:
- Purchasing power of money goes down each year because of inflation.
- You need to know how to protect your money and grow it.
- If you don’t know how to protect your money and grow it, it will most likely run out some day.
Example of Mikael Syding doing the opposite of everyone else (not focusing on money): Mikael had a very low wage in the finance industry in his early 20s and his peers wages were much higher.
A couple years later he made 10-20 times more than all of them.
He spent time building up his social and cultural capital to later make lots of capital.
Another note about money: People who come into money they haven’t really earned (such as lottery winners) start wasting it on conspicuous consumption so they can be seen.
Examples: Buying gold chains, diamond rings, supercars, tables at the club, designer clothes.
Imagine you make one billion USD: You will party hard for one year and show off. But what do you really want to do after that novelty phase is over?
Also, think about how you can use one on two of the capitals to make the 3rd and 4th stronger?
Then in another cycle you may use other capitals to strength other ones.
– Oskar Faarkrog
We are right now creating the Future Skills Program which will be an online video course covering decision making, building the 4 Capitals, and other actionable tips for improving your life and career. It will include weekly homework and evaluations.
The course will be presented by Mikael Syding, the European Hedge Fund Manager of the Decade 2000-2009.
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