“The true wealth of a nation lies not in its stock markets or its banks, but in the health, knowledge, and purpose of its people.”
A 2008 study by Amparo Castelló-Climent and Rafael Doménech in The Economic Journal offers profound insights that every Holistic Wealth Planner should understand. Beneath its formal econometric modelling lies a powerful truth about why inequality persists — and how human capital, not financial capital, ultimately determines whether a society flourishes or falters.
Their research builds a bridge between economics and human development. It reveals how education, health, and longevity are not just indicators of progress — they are the engines of it. The model shows that the life expectancy of individuals depends heavily on the human capital of their parents, and that this relationship forms a feedback loop that can either uplift or entrap entire generations.
The Poverty Trap of Unequal Human Capital
The authors describe a world of multiple steady states — self-reinforcing conditions in which societies can either ascend toward prosperity or descend into persistent deprivation.
- In high-equity societies, where most families have access to education and healthcare, children enjoy longer lives, invest more in their own learning, and grow the next generation’s potential.
- In low-equity societies, children born into poverty inherit more than just low income — they inherit shorter lives. With fewer years ahead, they have less incentive or opportunity to invest in education. Thus, they remain trapped in low-skill, short-life cycles.
This is not simply about money. It’s about expectation horizons — how far into the future a person believes their effort will bear fruit. A short life expectancy shrinks the future; a long one expands it. In economic terms, inequality literally shortens the human time horizon for growth.
Life Expectancy: The Hidden Economic Variable
The study’s central discovery is striking: life expectancy is the missing link between inequality and economic growth.
Even when accounting for total education levels, nations with unequal access to education — and therefore unequal life expectancy — experience slower human capital accumulation. The poorest die younger, study less, and remain poor. The wealthiest live longer, study more, and become wealthier.
This dynamic echoes one of the Academy’s foundational principles: the greatest return on investment is in human capital — our skills, knowledge, health, and spirit.
Holistic Wealth Planners must therefore see longevity not merely as a demographic statistic but as a key driver of sustainable prosperity. Extending life expectancy through health, education, and purpose-led living is a wealth strategy in itself.
From Income Transfers to Structural Trust
The paper challenges traditional economic solutions that focus on redistributing income. It argues that even if credit markets were perfect — meaning everyone could theoretically borrow to study — those with shorter life expectancy would still underinvest in education. Why? Because their expected lifespan is too short to enjoy the returns.
This has profound implications for both policymakers and planners. Raising income alone does not equalise opportunity. The true solution lies in raising life expectancy — in bringing the horizons of the poor closer to those of the rich.
In AoLP terms, this is the difference between extraction and empowerment. Systems that redistribute wealth without addressing health, education, and dignity remain extractive. Systems that build structural trust — by giving people the time, tools, and confidence to grow — are empowering.
Breaking the Intergenerational Cycle
The model provides hope as well as diagnosis. It shows that governments and communities can move entire populations from the “low” to the “high” equilibrium through policies that guarantee minimum education and improve health. Once these gains take root, life expectancy rises, and each generation has more incentive to invest in learning.
For Holistic Wealth Planners, this principle translates into practice:
- Help clients plan beyond one lifetime — focus on the transmission of knowledge, values, and opportunity, not just assets.
- Encourage intergenerational compounding — where the education, health, and purpose of one generation amplify the prosperity of the next.
- Use planning tools that measure and build human capital equity, not just financial capital accumulation.
In the GAME Plan, this is the work of aligning Means (financial structure) with Goals and Actions that extend wellbeing across time.
The Moral Dimension: Life as the Measure of Wealth
The research reaffirms a deeper moral principle that lies at the heart of the Academy’s mission: the purpose of wealth is to extend and enrich life. When life itself becomes shorter or more precarious for some, the system has failed — economically, socially, and spiritually.
This echoes what we teach in the Holistic Wealth Ontology — that the economy should serve life, not the other way around. Life expectancy is not just a measure of survival; it is a measure of hope. When planners help clients find meaning, manage stress, and create “enough” for a full life, they are extending life expectancy in the truest sense.
Our work, then, is not just financial planning — it is life extension through empowerment.
Integrating These Insights into Practice
For Holistic Wealth Planners, the practical takeaways are clear:
- Measure Human Capital Inequality
Include health, education, and emotional resilience in every client’s “Wealth Audit.” Gaps here are as critical as gaps in their balance sheet. - Plan for Longevity, Not Retirement
Encourage purpose-led work and lifelong learning. Longer, healthier lives demand flexible wealth structures, not fixed retirement targets. - Invest in Structural Trust
Support initiatives that raise life expectancy and education access — locally and globally. Social investments that extend life create compounding returns for humanity. - Design Intergenerational Plans
Use tools like the GAME Plan Report Template to connect present goals with future generations’ wellbeing. - Prioritise Human Flourishing
Treat purpose, health, and wisdom as the real currencies of wealth. Financial means are simply the architecture that sustains them.
A Call to the Next Generation of Planners
The Castelló-Climent and Doménech model shows us why product-based financial systems will always fall short: they focus on transactions, not transformation.
Holistic Wealth Planners are the architects of a different future — one where empowered individuals become the compounding agents of social progress. By designing plans that nurture human capital and extend life expectancy, we help humanity shift from survival to significance.
This is the essence of the Academy of Life Planning’s mission:
To replace extraction with empowerment — to build structural trust, equalise opportunity, and extend the human horizon.
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