Every dollar you earn, every piece of real estate you own, and each investment portfolio you possess, if you're wise, you want them to be left to your children. For even the Bible says, “a good person leaves an inheritance to their children's children.”
The accumulation of assets without a plan typically sounds, at least in some investment circles, - sacrilegious. Why would you work so hard to leave all your assets to your uncle, Sam? While most of us intrinsically know the importance of estate planning, many don't do it. Stories of relatives who passed without a will read like a phone book, and the drama that ensues is the subject of a disproportionate share of family drama. Hearts break and only the tax man walks away feeling good.
Not to add torture to pain but there is another all-important asset that we rarely discuss and seldom plan to leave to our progeny. I would argue that it's more important than all your financial capital because it is the only asset that always keeps giving. I'm talking about social capital.
At DeJesus Solutions, we define social capital as the value of our connections to people, institutions, and organizations. Social capital is what probably got you the job, contract, and maybe your children’s entry into the school of their choice (perhaps I should leave the last one alone). One thing for sure is that social capital is what gives us the valuable information we need to make better decisions about careers, investments, and actions.
Let me ask you a question, and I want an honest answer if you were to pass away tomorrow what’s your plan to pass your valuable social capital to your heirs? Do you have a plan?
In our Social Capital Building Institute, we asked this same question to more than 300 workforce development practitioners. The answer is always the same – no one has one.
Hear me out. Regardless of the number staring at you from your bank account, or the value of your financial portfolio, you possess something more valuable that you can pass on to your children and, if you feel remotely philanthropic, some of the less fortunate youth in your community (you know I had to represent for the youth). You have a legacy that can give them the tools to flourish, lifting them up into great opportunities that can bring them success. What you have is social capital.
The more you spend, the more you make. And although many don't like to admit, social capital has contributed more to their wealth than any other asset, even education. In my recent YOUTUBE video, I break down the value of education revealing the true lifetime value of a high school diploma. Don’t get happy - it’s only $1,525,000. After I break that down over a 17-year olds’ remaining working years (RWY), you will find out what most don’t want to admit – a high school diploma is only worth an average of $30,000 a year, that’s $15 an hour (nothing much to be happy about when the national poverty guidelines for a family of four is $24,400).
Education is not the answer.
Yes, it is important, but there must be something more. And social capital is it. Why are some groups earning six times the poverty rate and others are stuck in it? Watch the video. If you are a workforce development practitioner, you will appreciate how I break down the importance of the work you do. But in the end, my message is as consistent as taxes: social capital determines the quality of the work experience, the value of the credential, the relevance of the skill, and the likelihood of getting into college, and more importantly, the chances of completing it.
If social capital is so important then why have so few contemplated the development of a social capital legacy plan? If this article helped you understand the importance of strategically leaving it, then I want to make the case that we also have to help low-income young people develop it. Abundant levels of social capital can provide them more resources than a few thousand dollars ever can.
If we treated our social capital better than the way we treat our finances, we might treat low-income youth better too and erase the term disconnected forever. Remember, this generation is the first that will not earn more than the generation that created them. The gap between the haves and the have-nots continues to widen. Making sure young people have a connection before the credential will make life better for us all.
It’s time to do more than just cross your fingers and hope for some credential to get young people access into the labor market. Social capital is not only what gets them in; it will keep them in. Things change and the last hired is always the first fired.
What you can do is pass on your social capital legacy, not only to your children but to all children. I just want you to do one thing. Promise? Don't wait till you die to share your social capital legacy. Let us show you how today.
Edward DeJesus is the President of DeJesus Solutions, the founders of Social Capital Builders. www.edwarddejesus.com