What Will You Pass On? Rethinking Capital for the Next Generation

Brad Smith, CIM, Senior Investment Advisor, Advice First Wealth, June 19, 2025

When we hear the word capital, most of us think about money - financial assets, investments, and inheritance. But the truth is, we are all stewards of multiple forms of capital, whether we realize it or not.

Capital isn’t just what’s in your investment account and real estate. It’s also what’s in your relationships, your heart, your spirit, and your character.

Consider these six forms of capital:

• Relationship Capital – The depth of your connections and your ability to build trust and community.

• Intellectual Capital – Your knowledge, skills, and ability to think creatively and critically.

• Emotional Capital – The strength of your self-awareness, empathy, and resilience.

• Spiritual Capital – The values, beliefs, and purpose that guide your life.

• Financial Capital – The money and material resources you possess and can invest.

• Character Capital – The inner strength to do what’s right: integrity, humility, courage, and honesty.

As we think about legacy, these forms of capital raise deeper questions. The next generation needs more than wealth - they need wisdom, resilience, and vision. Recently, a friend posed some great questions to me, and I thought I would challenge you with these same two questions. So, here’s a challenge:

If you could only pass one form of capital to the next generation, which one would you transfer?

Would it be your financial security? Your faith? Your way of thinking? Your emotional stability? Your reputation or your ability to learn?

How you answer this question, should indicate which capital you should spend the most time investing in for the next generation. If the answer is Relationship Capital than consider ways you could invest in life experience that builds relationship.

Now take it a step further:

If you could pass four forms of capital - but had to bankrupt one - which one, would you choose to leave behind, and why?

The one you would bankrupt can still be important, but it will be in its proper place. These aren’t easy questions. But they are essential one - especially for those who care about building a legacy that truly lasts.

What we invest in now—whether in others, in our own development, or in our community—will shape what we are remembered for and what future generations inherit. May we be intentional about transferring not just wealth, but all forms of capital. Some that have much more value than wealth.