As I noted early on in my first book, RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit, just as being physically fit involves two critical components, controlling diet and exercising; being fiscally fit also involves two critical components, controlling debt and investing. Not only are both concepts built around two core components, they are linked in two key ways. First, the impacts from one often have similar consequences for the other. Second, people often have similar mindsets or beliefs about both concepts, which are often apparent in their actions.
It is no coincidence that the same people who believe that the lottery is their road to riches are generally the same folks who believe the answer to being physically fit lies in a new diet cookbook or the latest workout program. You know the one, the infomercial advertising the plan at 2:30 a.m. The one that offers a video for three low payments of $19.99 plus shipping and handling. The reality for both long-term fiscal and physical well-being? The development and management of detailed plans and the recognition that there aren’t any short cuts. It takes hard work and firm commitment.
A few examples of the phenomenon include smoking, a poor diet (being overweight), and carrying significant debt:
• Not only are there numerous health consequences associated with smoking, it is an expensive habit. Money used to buy cigarettes cannot be used to fund an emergency fund or an IRA. Smoking, a sure-fire way to negatively impact your physical and fiscal well-being with one habit.
• A poor diet makes achieving/maintaining physical fitness much more difficult and often leads to health problems, which can be expensive to treat. The money that is used to pay for medical treatments – which could have been avoided or mitigated with a better diet – cannot be used to add to 401(k) contributions or saved for a child’s college education.
• Carrying significant debt impacts more than your fiscal well-being. Any of us that has ever found themselves in a debt hole understands the tension and anxiety that often comes with it. Adding to the woes, a recent study by the Feinberg School of Medicine at Northwestern University concluded that there are physical impacts as well, including the finding that individuals with greater debt were found to have a 1.3 percent increase (relative to the mean) in diastolic blood pressure. It isn’t enough that debt often prevents individuals from achieving financial freedom, it also negatively impacts their mental and physical well-being.
While it might not be intuitive, the first two steps toward achieving fiscal fitness for many are to stop smoking and to lose weight:
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Sources: Centers for Disease Control | American Journal of Clinical Nutrition | Barbara O’Neil | Jay Zagorsky