EIGHT forms of capital you need to become wealthy

Real wealth is measured in different ways. It's more than money and things you own.

As an entrepreneur who might have ambitions of being rich one day, it's good to understand what real wealth is actually made up of.

Real wealth is made up of different forms of assets, called, "Capital."

Let's define what capital is? 

The Oxford American Dictionary states that capital is, “Wealth in the form of money or other assets” and a, “Valuable resource of a particular kind.” 

What does that mean - Other assets? Well, it means capital comes in different shapes and forms. Eight to be exact. Here's the list:

Financial capital

This is the form of capital everyone knows and strives for. You might call this Money. Currency. Financial instruments. Money is an instrument we use to trade with. Other forms of financial capital are gold and silver, and now, even Bitcoin.

Material capital

These are things that are built or created. Your house is a form of material capital. The tools you use. These things have intrinsic value but they can not be traded as easily as financial capital. 

By the way, when people talk about, "Your Net Worth" they are referring to only these two forms of capital. The Rich List looks at your bank balance and assets. Financial and material capital combined equals your net worth. This is what a mortgage company will look at when you apply for a loan. The other forms of capital below are not measured like this but are valuable in their own right. 

Social capital

Social capital, on an individual basis, can be defined as your likeability, your ability to make friends, cooperate with others, your relationships. 

As a society or community, it is the trust, cooperativeness and cohesion between people. Without this, it's very hard to live. Because you can't trust your greengrocer and neighbour or your coworkers. 

In my opinion, social capital enables all the others. Your ability to get on and cooperate with others makes a difference in how much you might succeed in accumulating all eight capital assets. 

Living or Natural capital 

The fresh air that we breathe, trees we have in our garden, the clean water we can access, the quality of our top-soil, animals, plants - These are valuable and add to the quality of the lives we live. Not having any of these will cause a problem. Living capital is made up of everything that forms the true basis of life on our planet. 

Experiential capital 

The experiences you have. These I would consider being more valuable than knowledge. Having three years of experience is more valuable than a degree that takes as long to accomplish. You can join a team in a certain sector and make yourself useful right away if you have experience. 

Intellectual capital 

This could be book knowledge. Specialist knowledge you have on a subject applied to say a job. It can't be taken away from you. The intellectual capital of a nation might position them to be good at particular things. Many nations are known for being good at something. Japanese sword-making comes to mind. Footballers from Brazil. German engineered cars. There are many examples.  

Spiritual capital 

Taken figuratively or literally, spiritual capital related to your connection with a higher purpose (or G-o-d), or your overall happiness and purpose. As a society, do you have a higher purpose? I remember while living in India, I noticed everyone was happy. India has a high happiness rating and has tremendous spiritual capital. 

Cultural capital 

Nearly all cultures around the world have music, art, history and architecture, These are valuable and take time to amass as a society. Some cultures go back 1,000's of years and are characterised in their historical architecture. Museums are designed to capture cultural capital for everyone to benefit from. 

In conclusion

Ultimately, you can control a person's financial and material capital but the others are intrinsic, based on your human experience.

As entrepreneurs, by enlarge, we dedicate our lives to building businesses and accumulating money. In reality, though, real wealth is made up many other things and the combined value is what you might call real wealth.