Benjamin Beck, CFP®People who know Beck Bode know that fitness and nutrition are important to us. Health and wellness are key to the financial work we do here for the simple reason that there’s no point in growing your wealth if you don’t live long enough or are healthy enough to enjoy it.
The practices that lead to good physical health are the same that lead to good financial health. Those things include having a solid plan, thinking long-term, and taking a disciplined approach.
What Is Financial Wellness?
Investopedia defines financial wellness as “the state of one's personal monetary affairs.” In other words, not only are you able to pay your bills, you know you have (or will have because of your investment portfolio) a bright financial future that allows you to meet your long-term financial goals.
Why Your Health Is Your Greatest Wealth
If your financial health is not so healthy, your physical health could suffer too. The American Psychological Association (APA) found “that 72 percent of Americans reported feeling stressed about money at least some time in the prior month.” You may feel like you don’t have the time to worry about the effects of stress on both your physical well-being and your financial planning strategy adherence — but this is a key consideration.
If your health is a primary focus, you can expect to live many years past retirement age. In fact, you should plan for it. Outliving your money is a real possibility that can be avoided with a solid investment strategy.
Having a Solid Plan for Health and Wealth
To stay fit — or to get fit — you need to set goals, make a plan, and monitor your progress. The same can be said for achieving financial wellness. A fitness plan will include what types of activities you should do and when you should do them. Financial planning involves the same — your end goal will determine what actions you will need to take, and the intensity and frequency of whatever it is that you end up doing.
The Long-Term Approach
Throwing yourself into a fitness or financial plan doesn’t turn out well if you want to get there in a minute. If you don’t approach your objectives with an eye to the long term, you’ll either burn out or quit. The healthiest people you know are probably people who aren’t going on crash diets, chasing fads, or setting unrealistic expectations. They know that time is an essential ingredient to their success. Similarly, the most successful investors know not to get distracted by short-term events, fads, and news. Their eyes are set on their long-term goals, which only time and patience will deliver.
Healthy vs. Unhealthy
When I think back to early 2020, I am struck by how many people used the onset of the pandemic as an excuse not to take care of themselves. Granted, some people also used the opportunity to go out and purchase exercise equipment so that they could counteract being in their homes for so long.
I bring this up, because as a fitness fanatic, occasionally when I am outside my house — say when the kids are playing in our neighborhood at the end of a summer day — I may run into a bunch of other dads on the street, and they may offer me a beer. Then, they’ll joke or say something like, “Oh, don’t offer Ben a drink, he doesn’t do carbs.” We all laugh, I shrug it off and head into the house with my family. The truth is that, frequently, the very people who criticize someone else’s healthy habits are tremendously unhealthy themselves.
Where I live, there are plenty of “successful” people — the house, the job, the outward appearance of financial wellness. Many of them are male heads of household, right around 40 years old, and their lives are not going in a positive direction when it comes to their physical health. They work lots of hours, they are under a lot of pressure, they eat unhealthy diets, and they don’t work out regularly. I know it’s a generalization, but I also know there’s truth to my observation.
I’ve read several reports on the causes of death in the general population, and everything I have seen points to the fact that most people die from chronic disease as opposed to unnatural causes. I mean it isn’t even close. Roughly 70% of all deaths result from chronic diseases, most of which are preventable or at least manageable with proper care.
What I want to tell the guys who tease me is, “You know what, why don’t I invite you to meet me in my garage three times a week at six o’clock in the morning and we will do a neighborhood workout just to get everyone active before work, what do you think of that?” I want to see how many people would respond to that.
It troubles me when I see my peers and the kind of shape they’re in. Because, you know, they’re not seventy years old, but they are potentially less capable of mobility. No, these are people in their early to mid-forties who are making poor lifestyle choices amidst the pandemic, and I know that they are not planning to die prematurely. I know they love their spouses, their kids, and that they are committed to the things they care for. But somehow, it’s not translating to living a life that lines up with that intention. This brings us to the question that is at the center of our conversation today.
How Long Do You Want To Live?
One of the most common questions financial advisors use to engage clients in deeper conversation about retirement is, “When do you want to retire?” An obvious follow-up to that question is, “How much money do you think it will take to make that a reality?” But a much better question to ask would be: “How long do you want to live?” And follow that up with “How much money do you think it will take to make it a reality?”
The fact of the matter is that even though most people aren’t actively thinking about how long they want to live, they will indeed live much longer than they think they will. A “normal” retirement these days can be over three decades long. And if you’re practicing healthy lifestyle habits, the chance of it being even longer than three decades increases.
Couple that with the increasing speed of technological innovation (and it’s only getting faster), which will contribute to longer lifespans, and all of a sudden you are looking at a long stretch of time for which you need to be financially prepared. The productivity and ingenuity of human beings are leading to the extension of our lives.
The Drive To Innovate Is a Powerful Concept for Health and Wealth
That same productivity and ingenuity of humankind, by the way, is also leading to wealth creation on a massive scale. There is hardly a conversation that I have with clients in which I don’t speak to my faith about the ingenuity of mankind, and the capacity of the markets to transform that ingenuity into tangible value for investors. If you think that this drive to innovate will slow down, then you shouldn’t be an equity investor.
But if you do believe that we are hardwired to grow and develop, then you will also likely believe that the whole foundation of the capital markets is the opportunity to make a better life for us in a lot of different ways. And the companies that are in the stock market are a representation of the human spirit and drive to innovate. This is a hugely powerful concept.
The chances of us staying alive to experience this innovation are greatly increased by the innovations themselves! For some people, that’s a tough message to hear. It requires acknowledgment that you may live well into your nineties if not beyond, which consequently asks you to invest for the long-term in very specific ways. It asks of you to practice discipline – the discipline to stay engaged, even when it’s difficult to do so. It will take a commitment to a plan and a proven investment approach to fuel the plan. It also takes a commitment to good physical health and overall well-being.
These are not easy things to ask of people. Just like saying no to the beer and working out at six am three times a week to do a hard workout isn’t easy. The call for instant gratification is strong. When I ask a client “How long do you want to live?” I’m asking them to consider all the ways in which discipline, long-term focus, and a methodical approach may help expand their lives.
Recognize the Relationship Between How You Manage Your Money and How You Manage Your Health
On the one hand, we have health, and on the other we have wealth. “Success” in one area is in many ways tied to success in the other because the same principles drive them. If you actually take the challenge of thinking about how long you want to live, you better also take the challenge of thinking about how you will fund that life. Because only by participating in the equity markets will you be able to produce the kind of growth to live the kind of life you want to live in the future.
If doing the hard thing makes the difference between living a life you want, versus a life in which you’re just a statistic, then I hope you will make the obvious choice — for your health, and for your wealth.
Discover the truth about financial wellness and how it relates to your retirement plan, check out our financial planning for retirement guide.