What if Labor Day Were Called Personal Profit Center Optimization Day

Here’s a bonus post for the week from an idea I edited out from yesterday’s blog, “Labor is Obsolete”

To our employers, we are a costs. Sure there is an expectation that our contributions either create something for which our companies can charge, or directly generating revenue. However, paying the employees who make these contributions this is part of the cost – “cost of goods sold (COGS)” or “cost of sales (COS)”. The rest of us are “overhead” necessary for compliance, quality of operations, or increasing efficiency. The organizational level where revenue is booked against the employee costs to produce the results are called “profit centers.”

Now, since the future of work see more of us working as entrepreneurial freelancers, what would happen if we took this line of thinking into our own lives? How are we personally profiting from our jobs and careers? I wouldn’t look at it as just a financial profit or loss measurement. Certainly finances are vitally important, but for many people it’s not sustainable if other motivating factors are not in place.

Similar to how I recently wrote that financial profits are not enough for companies anymore, we need a clear understanding of how our jobs and careers contribute to growth of our own personal wealth. To do this effectively we need a personal wealth balance sheet. Think about the profits you gain in your life along additional categories of personal wealth and you can observe how your job and career benefits your life.

treasurechest

Personal Wealth is far more than just accumulation of financial assets.
[SOURCE] (c) Phil Curiant, used according to Creative Commons License

Here’s a series of categories for evaluating a company’s contributions to common wealth beyond just financial profits, proposed by Umar Haque based on the ancient Greek ideal of eudaimonia – “a good life”. Many of these can also be used as a base for evaluating personal wealth:

  • Natural Capital – quality of your natural surroundings where you live or accessible to you.
  • Financial capital – financial wealth, passive income, financial assets vs. liabilities, property, businesses.
  • Intellectual Capital – I would include here skills, talents, degrees, certifications, and licenses that help in the creation of new assets.
  • Human Capital – For personal wealth, I would include spiritual and health as line items in this category.
  • Social Capital – This would include wealth in your relationships of family, friends, professional and social networks, and your communities.
  • Emotional Capital – this includes your general happiness levels, satisfaction, passion and engagement in your life activities.
  • Organizational Capital – while this category makes sense in a framework for evaluating societal common wealth, it doesn’t seem to apply to personal wealth, but I’ve listed it here for completeness.

I thought of a slightly different framework for prioritization of life goal setting once when thinking about how most goal-setting programs seem to presume that people only have one single-minded goal in life. For goal setting in a balanced life, I needed a definition of balance. One I remembered is from YMCA camp where we talked about the mental, spiritual, social, and physical dimensions of a life need to be equal to be in balance. This led me to this framework:

Mental

Skills & knowledge        |           Creativity

Spiritual

Personal contentment    |           Social Good

Social

Relationships & family   |           Old and new friends

Physical

Health                           |           Financial

Measuring wealth in each of these categories is, of course, the hard part, but way to get started is simply to choose goals for each category. Then see how your job or career contributes to achieving these goals, and perhaps which areas of wealth your  career is lacking in.

Of course, ones priorities will change with circumstances over time. Maslo’s hierarchy of needs will prevail here. If food and shelter for yourself and family are a concern, then financial is rightly one of the most pressing areas of concern. But as this need is better filled, it’s very likely that other categories of personal wealth will become more important, even to the point of your being willing to trade off one versus another.

How would you measure non-financial personal wealth?

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