Become Wealthier by Increasing the Three Types of Capital

There is a concept in the book ‘The 5 Day Weekend‘ (Despite it’s horrible title, this is a book that I recommend to all entrepreneurs or wanna-be-neurs) that discusses the 3 types of capital that you should focus on growing in order to become wealthier.


Mental Capital

Mental capital creates a lot of value for you and increases your ability to create value for others. Mental capital is what you know. This includes all of your knowledge, skills, education, experiences, insights, etc.

The best type of mental capital comes from specialization. Being an expert on one topic sets you apart from the others, as no one can be an expert on every topic.

The nice thing about mental capital is that it’s one of the easiest to acquire. We live in an age where things can be learned as easily as sitting in a chair, pulling out your phone, and opening up YouTube. People have learned to play instruments, build iPhone apps, start businesses, and more all from watching educational videos online.

Focus on growing your mental capacity daily. Make it a habit. For me, I read a lot. I study topics that are applicable to my career and interests. When I wake up, I read. When I’m in bed at night, preparing to sleep, I read. I read an average of 2 to 3 books each month. Breaking it down, it’s just 20 to 30 pages of reading per day.

This one habit alone has elevated my level of understanding and helped me succeed in many aspects of my life. In addition, and more importantly to me, I’m able to give to and educate others as I grow my mental capital.

Check out this article that highlights a lot of inexpensive options for increasing your mental capacity.


Relationship Capital

‘The 5 Day Weekend’ defines relationship capital as “the people you have a connection with, create value for, or who know and trust you.”

People can build relationship capital by stepping out of their comfort zone, helping other people, and providing value to them.

High-performing people surround themselves with other high-performers. They spend their time building relationships with people that will make them stronger, smarter, and happier. They cut out people that don’t add value to their lives.

“You are only one relationship or one idea away from your next level of prosperity.”

– Garrett Gunderson

When growing your relationship capital, you should focus on cultivating relationships with teachers, mentors, business and community leaders, and any others that will increase your mental capital.

Leveraging Linkedin To Grow Relationship Capital

One way that I have been able to increase my relationship capital is through Linkedin. I hop on Linkedin and search for local professionals in and out of my industry. I look to see if they know people that I know or am connected with already. If so, I send them a connection request. Once they accept my request, I shoot them a simple message: “Hello Jack, it looks like you know my good friend Bill. Small world. How are you doing?” From there, we have a natural conversation, get to know each other more, and usually meet up for lunch.

This one practice alone has provided me with top talent when hiring, generated sales lead sources, expanded my network, and allowed me to help others in their respective industries.

Sometimes the most value you can bring to someone is by connecting them with the right someone else.

So what if someone doesn’t want to meet up? Don’t worry about it. There are thousands of other people in your community that do want to meet you. A true professional will want to meet other professionals as the relationship could be mutually beneficial.


Financial Capital

Financial capital is exactly what it sounds like it is, it’s money that you have access to. The ‘5 Day Weekend’ says, “Financial capital expands when you create more value than you consume. It’s a by-product of how effectively you utilize your mental capital to create value for people.”

Financial capital can be money that you have in your own bank account, it can also be money that your relationships have in their bank accounts. If you continue to increase your relationship capital as well as your mental capital, it will increase your financial capital.

Often we focus on the expense side of the equation when it comes to managing our finances. Financial experts say to cut costs down and live within our means. You should do this; however, you should also focus on growing your income as well.

Living within your means does not have to equate to reducing your standard of living. Why not think about other ways that you can generate more income in order to maintain or increase your standard of living while still living within your means?

I truly believe that there are more ways to make money today than ever before.


Exponential Growth

“As you’re able to increase your three forms of capital simultaneously, they will have an exponential effect on each other” says the author, Garret Gunderson. “Simply put, the more you have to offer, the more you are able to receive in return.”

He goes on to say, “If you’re struggling with money, it’s not a money problem. Instead, you don’t have enough of the right mental or relationship capital. If you want more money, you have to increase your mental capital, relationship capital, or both.”

Think about this for a second, how many poor people do you know of that are constantly increasing their mental capital and relationship capital? I don’t know of any. The wealthy people that I know of are either very smart or they are skilled when it comes to developing relationships. The wealthiest people I know (the one’s with the most financial capital) are both.


Speaking of relationship capital… if you enjoyed this article, I’d love to hear from and connect with you. Please tell me below how you plan to increase your mental or relationship capital this year.

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