One of the more common investment mistakes that individual investors—and sometimes even professional advisors—make when they’re developing a comprehensive financial plan is failing to account for important nonfinancial assets.
Financial assets are easily observable and typically liquid. Thus, they’re often the center of attention. On the other hand, assets such as labor capital (the mortality-weighted net present value of future expected labor income), personal housing and pensions (the present value of future Social Security benefits and other pension benefits) are often overlooked.
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