Saturday, September 15, 2012

Physical Fitness for Financial Health

Physical fitness offers valuable lessons for financial prudency.

In present local circumstances, both the industry seems to be obsessed with quick fixes for long term problems/challenges. Is there a direct relation between financial and physical fitness? Are there any lessons that we can take home from the gym?

There’s definitely a direct relationship. Take inflation for example. Inflation impacts not only your budget in particular but also the society in general. Health care costs keep rising in tandem, with the general inflation level. In other words it costs you more each year to provide you and your family with the same level of (health) care each year. Good health means lower health care and insurance costs, lower expenses on visits to physicians, and even few days off from office on health issues. (Click to read Inflation & Financial Planning)

Is this fitness thing guaranteed cure to your financial well-being in future? No, certainly not. However, reduced mental and physical stress on your body and mind over extended time frame should be worth the effort.
Nothing said above is rocket science. As kids what we referred to as “go out and play”, adults refer it as “working out”. As kids we used to grab a healthy snack to refuel before more play. As adults snacking is defined as something we do with one hand surfing the TV channels with remote while the other is holding either a bottle of beverage drink or holding a Pizza slice.

Our arguments about the comparative analysis of physical and financial fitness extend beyond just cost savings. Drawing up health and fitness plan also involves many rules of thumb involved in drawing up a financial plan too. Some of them are as under:-

There is no tomorrow

Albert Einstein had said that Compounding is the eighth wonder of the world. It is a gospel truth that the earlier you start saving for future, the easy it is to meet your goals. Cost of delay or postpone may turn out to be very high. Same holds true for your physical plan. Smoking is injurious for health. Quit—from today. Better start your morning walks from today rather than waiting for next Saturday. Every little bit of effort helps and more you do TODAY, less painful will be TOMORROW.


Boredom is the biggest irritant to success be it in financial or physical fitness.  Just as putting all your eggs in one asset class is sure way to fail in investments, physical fitness has more to it than just treadmill or stationery cycle. Diversify your activity and you’ll be more likely to stay engaged and succeed.
Challenge your body in different ways is akin to making your hard earned money work harder than you do.

Do it with a purpose—Make a plan

More often people chose investment without any real consideration as to whether it is appropriate for them or not or whether it is appropriate in meeting their goals. Long term money is parked in either FDs or PPF with a sense of discharging their duty. Just as buying a pink paper at Rs.2 will not help you accumulate Rs. 2 crore that you need for say  your retirement, so too putting together  a diet plan watching a 2 minute TV clip or walking into a fitness centre without assessing whether your body is tuned to handle the stress/exertion.  Checking first with your doctor and spending an hour or two with your personal trainer can go a long way in jump starting a successful plan. Similarly to successfully achieve your financial goals, it is important that you consult a financial planner who is suited to give you a 360o view of your financial position. (Click to read Trust your Financial Planner)

Costs Matter

Costs matter but they should not be an excuse. You don’t have to spend a fortune to stay fit. There’s a lot you can do with your two legs to stay fit.  Similarly, DIY (Do it yourself) attitude in financial matter may sometimes prove to be counterproductive. The amount you lose on faulty investment or the joy of marrying off your daughter with the money exclusively saved for the purpose will more than compensate the fees that you pay your financial planner.

The biggest factor in achieving success is managing your expectations. To expect mind blowing results without work is akin to expecting reasonable returns without any meaningful contributions or planning. Life does not work like this. Focus on things you can control and not lose your nights’ sleep over minor setbacks. (Click to read Fee is better than free