A Business Owner Invests in Herself

A young couple, both of whom were dentists, came to us for financial planning. How to improve the returns on their $1 million investment portfolio and how to save more money were their top concerns.

We analyzed their practices, their investment accounts and their real estate investments. Whereas trying to push for 1 – 2% more return could add $10,000 – 20,000 a year to their net worth, it would also entail a significant increase in investment risk. During our discussions, however, we learned that the wife had the opportunity to take specialized training – training that would cost her about $10,000 and that would generate $100,000 more income for her business each year.

The recommendation to invest in education was clearly a lower-risk, higher-return choice. Recognizing the importance of human capital, or the skills and talents that our clients possess, is a core concept of our financial counseling. In this case, the lifetime financial returns on education far exceeded any additional returns an investment portfolio could have provided.