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It has been a while since my last newsletter. And as an apology, I will give you a great brain food today, I will talk about something that shapes the direction of your life yet rarely gets discussed with enough depth: the different forms of capital you are building every day, whether you notice them or not.

Most people measure progress through income, promotions, or visible success. But those metrics only tell a small part of the story. Beneath every financial outcome sits another layer of assets that determine how fast you grow, what opportunities you access, and how much freedom you can design over time. That is where today’s idea begins.

Most of us track progress through things we can easily see. Income, titles, investment returns, or how fast something grows. But those are usually the result of deeper decisions that stay invisible for a long time.

The interesting part is not what you earn today, but what you are becoming capable of tomorrow. The roles you take, the people you learn from, and the kind of problems you choose slowly shape the direction of your life long before any financial outcome shows up.

So instead of looking only at surface level progress, this edition is about stepping back and asking a different question: what kind of leverage are you quietly building while you think you are just working?

First, let’s understand Financial capital:

Financial capital is straightforward. It includes:

It provides:

It compounds through market returns and ownership structures.

Now, let’s talk about career capital:

Career capital is more abstract but arguably more powerful early in life.

It includes:

Career capital determines your earning power and your access to ownership.

It is the engine that generates financial capital.

In the early stages of a career, your financial base is inherently small, which fundamentally limits the power of compounding through money alone. For instance, if you earn £40,000 per year and manage to save £10,000, even assuming an 10% annual return, the gain in the first year is just £1,000. Over several years, while the percentage seems significant, the absolute contribution to your wealth remains limited. The effect of compounding at this stage is almost negligible relative to the potential gains from improving your earning capacity.

By contrast, if you focus on increasing your earning power, for example, moving from £40,000 to £80,000 through skill acquisition, reputation, or strategic positioning, the change is very difficult. Not only does your immediate income double, but your cumulative lifetime earnings increase exponentially because all future raises, equity opportunities, and profit-sharing are now applied to a higher base. In other words, small improvements in skill or leverage early in your career have a multiplicative effect over decades, while early financial investments remain largely incremental until the base is sufficiently large.

Mathematically, this can be understood by comparing two forms of compounding: financial compounding and skill compounding. Financial compounding depends on the size of your capital base, which is low at the start of a career. Skill compounding, however, depends on your ability to improve your market value, decision-making, and output, areas where growth is much less constrained by absolute capital. Increasing skills, reputation, or network early produces a nonlinear effect on income, career opportunities, and leverage, whereas financial compounding is almost linear at small scales.

This explains why early-career decisions should prioritise learning velocity and exposure to high-quality experiences over immediate financial gain. The environments where you operate matter immensely. Working under highly capable mentors, tackling hard problems, and taking responsibility for meaningful outcomes accelerates skill acquisition far faster than a slightly higher salary in a low-growth role. Similarly, being embedded in a network of high performers provides both implicit and explicit leverage: you learn faster, you gain credibility by association, and you gain access to opportunities that would otherwise be unavailable.

High standards act as a multiplier. If you consistently seek roles or projects that require excellence, you force yourself to operate at the edge of your current ability. This creates a feedback loop: the more you stretch, the more visible you become to decision-makers, and the faster your career capital accumulates. Stretch environments, those that push you beyond your current comfort zone, are crucial because skill compounding is highly sensitive to marginal challenges. A small, incremental project may teach you very little, whereas a complex, high-responsibility role accelerates your development by orders of magnitude.

Responsibility is another critical dimension. In early career stages, few people have the freedom to make meaningful decisions, but when you’re able to do that, you will gain the rare combination of authority and accountability. These experiences cannot be bought and have enduring returns: they improve judgment, decision-making under uncertainty, and strategic thinking. Each responsibility you accept compounds skill and reputation simultaneously, creating optionality that financial capital alone cannot produce at that stage.

At its core, financial capital compounds because it generates returns on itself. The mechanics are simple: money invested in equities, bonds, property, or businesses grows at a rate determined by risk-adjusted returns. Even modest annual returns of 5–10% produce substantial wealth over decades, due to the exponential effect of compounding. For example, £50,000 invested at 7% annually grows to nearly £100,000 in 10 years without additional contributions. Over 30 years, the same initial capital grows to over £380,000. The larger your financial base, the more powerful compounding becomes.

The key structural difference compared to career capital is that financial capital scales independently of your time. You can continue to earn, sleep, travel, or pursue new ventures while your assets accumulate value. Whereas career capital is bounded by your personal availability, attention, and energy, financial capital can continue to generate wealth in parallel to multiple other activities. This is why it is often referred to as the ‘freedom engine’: it allows you to detach your daily survival from the hours you personally work.

One of the most subtle traps is equating salary with progress.

Salary is a price. Career capital is an asset.

A higher salary does not necessarily mean:

It may simply mean you are selling your time at a higher rate.

If the role does not increase your scarcity or your leverage, it is financially attractive but strategically limiting.

Early Career:

Maximise learning and skill density.

Mid Career:

Increase leverage and pursue selective ownership.

Later Career:

Optimise financial capital allocation and reduce dependency on personal labour.

The best way to think about this?

Career capital increases your earning power per hour.

Financial capital reduces your need to earn per hour.

But it’s not the only way to think like this, I welcome a counter thought on this. Please reply to this email. I’d appreciate that.

If this edition gave you even one new way to look at your own path, that is enough for today.

I am always curious about what you are thinking, building, or questioning lately, so feel free to reply and share what has been on your mind. I read every response, even if it takes me time to get back to you.

Until the next one, take your time with whatever you are working on this week.

See you!

— Anirban

The Power Of Positive Thinking by Norman Vincent Peale.

Octopuses have three hearts and nine brains. Two hearts pump blood to the gills, one pumps it to the body, and each arm has its own mini neural system that can make decisions independently.