Most Americans graduate high school with almost zero knowledge about nutrition or personal finance, two of the most important things affecting our lives. A healthy lifestyle is invaluable. Without your health, little else matters. But financial health is important, too.
Finances and health coincide in ways you might not initially consider. Misinformation, a lack of transparency, and unscrupulous marketing strategies designed to take advantage of an uneducated public plague both fields.
Like your health, the consequences of mismanaged personal finance can be devastating. As a financial adviser, I've learned financial wellness matters as much as personal wellness. These seven nutrition-industry principles mesh perfectly to help you better understand personal finance and investing:
As a health-minded consumer, you wouldn't buy something at the grocery store without reading labels. Likewise, obfuscation oftentimes plagues financial products. Popular investments including mutual funds, annuities, and various insurance policies carry high hidden costs rarely disclosed by financial advisers, impeding your financial goals in the bargain. Like nutrition labels, don't depend on financial advisers to reveal those hidden costs. Ask questions, research carefully, and always know what you're buying.
Don't ignore the evidence.
Science shows eating leafy greens can ameliorate disease, clear up skin, improve digestion, and increase energy levels. Who would ever argue leafy greens are unhealthy? Likewise, academic evidence overwhelmingly proves fees and expenses to pay conventional money managers for predicting the market's ups and downs wastes your time and money. Avoid the hype, stick with research, and opt for an evidence-based portfolio.
Create goals and make a plan.
Health-minded folks know consistent exercise and healthy eating create preventive, proactive measures to avoid disease and weight gain. Whether it's debt you can't escape, a debilitating investment mistake, or realizing you don't have enough money for the next phase of your life, not taking preventive financial measures will likewise cost you in the long run.
Hire a coach.
Whether you're tackling a new fitness plan or want to lose 10 pounds this month, maintaining motivation, discipline, and accountability can become a herculean challenge without expert guidance. Similarly, implementing and executing a quality financial plan that achieves long-term results without a financial coach can become incredibly difficult. Beyond simply telling you what to do with your money, high-quality financial advisers become educators, catalysts, motivators, and accountability partners.
Don't assume familiar means safe and healthy.
You know those model-perfect actors don't actually eat fast food they hawk in commercials, right? Yet your brain has a flawed tendency to associate familiarity with safety. Don't fall for it. Question everything, even if your brain tells you it's safe and normal because you've seen the ad on TV a million times.
Monitor your progress.
What you track, you can improve. Healthy people set measurable goals. To determine your financial wellness, set up a system to track your net worth over time. That might be an online financial aggregator, a dashboard like Mint.com, or a manually updated spreadsheet. Seeing results motivates you to accomplish more: If your current financial plan doesn't produce results, seeing those shortcomings can prompt you to take immediate action.
Don't believe that if you could just make more money, you'd be happier.
Much like losing weight, more money almost never equates to happiness. As a financial adviser who's worked with hundreds of individuals and families, I've witnessed people at all income levels struggle with similar issues. No matter how much you make, you'll be tempted to compare, wish you had more, have money anxiety, and fight with your partner. More money won't solve those problems. In the end, money becomes a tool to amplify who you are and what you want to do for this world, not a solution that magically makes you happier.