The Health and Wealth Connection
“The greatest wealth is health.”
January is a popular time to make health-related resolutions and set goals to lose weight, exercise, or give up unhealthy habits. While people rarely make these resolutions for financial reasons, having a healthy body can actually lead to a bigger bank account!
Whether the motive is to climb a mountain, run a marathon, attract a mate, or just fit into pre-holiday clothes, those who prioritize their health tend to earn “healthy dividends” that can add extra zeros to their bottom lines over time. Call it a lucrative side-benefit… but no matter what time of year you start, committing to your health may be one of the best things you can do for your WEALTH!
Which Comes First – Health or Wealth?
Many studies have demonstrated a relationship between health and wealth, but which begets which is a bit of a chicken-and-egg debate. Do people live longer and healthier because they have greater financial resources? Or do healthier people tend to build greater wealth?
The answer appears to be… Both! A 2012 poll from the Canadian Medical Association shows a strong correlation between higher incomes and health. While a 2/3 majority of those earning $60,000 a year or more described their health as “very good” or “excellent,” less than 40% of those earning less than $30,000 a year said the same. Those with the lowest incomes were also almost 50% more likely to report being diagnosed with a chronic condition than those with highest incomes.
There are many reasons why wealthier people are more likely to be in good health. They can afford quality healthcare, food, and supplements. But there is also evidence that healthy habits are not simply the result of higher incomes, but the cause as well.
Thomas J. Stanley, author of The Millionaire Next Door found that self-made millionaires tended to have certain habits in common. They sleep a respectable average of 7-1/2 hours a night, rise early (most by 6 a.m.), and exercise an average of 3-1/2 hours per week. Studies have shown that those who keep fit earn higher than average incomes. One study published in the June 2012 issue of Journal of Labor Research showed that regular exercisers earned 9% more than their colleagues!
Some reasons given for this correlation have nothing to do with silver spoon privileges. Participating in competitive sports, running marathons, or even simply staying physically fit requires people to develop discipline and perseverance. Many learn to work with teammates, coaches, or accountability buddies, learning personal skills that translate easily to professional settings.
Is Fitness a Predictor of Success?
There are also physical reasons why staying in shape can lead to greater success and productivity. People who are fit tend to sleep better, have lower stress levels and more energy. They also exhibit cognitive benefits as the result of increased oxygen levels and nutrient delivery which, along with other factors, can help to increase memory and learning abilities. The result is that people who stay fit accomplish more and tend to be able to work longer and harder with greater focus than those who are not fit.
Adding to physical factors, fair or not, there are also cultural factors that also reward those who stay in shape. Multiple studies have shown that people who are fit encounter less discrimination and get promoted more readily. According to a study submitted to Health Economics journal, the salary differential between normal weight and obese employees averages about 2.5%, with women taking even higher pay cuts.
Another way that health is good for our wealth is by lowering healthcare costs. Research presented at the American Heart Association’s Quality of Care and Outcomes Research 2012 Scientific Sessions showed a compelling correlation between exercise, long-term health, and lower health care costs. The many-year study tracked 20,489 healthy people, finding that participants who exercised and stayed fit had 38% lower medical costs many years later, as measured by Medicare and other insurance claims. The savings in Medicare claims alone for each person who exercised regularly was nearly $2,000 per year for each person!
The study confirmed that even mid-life fitness habits meant later-life economic savings. As the study’s author, University of Texas Southwestern Medical Center research fellow Dr. Justin Backmann states, “We found that fitness confers dividends later in life even when other risk factors such as smoking, high blood pressure and obesity are controlled for.”
Resolve to invest in your wealth and well-being this year, and you can reap a lifetime of benefits!
Five Simple Ways to Improve your Health and Wealth
January (or “now,” whenever that may be) is a perfect time to stop making excuses and start making changes. Here are some tips to make this your best year yet:
1. Sign up for exercise, dance, or yoga classes with a friend for accountability, or join meetup.com groups that hike or bike. Those who exercise with others tend to stick with it.
2. Quit that bad habit – you know the one! Avoid tobacco or overindulging in sweets or alcohol and your body and your bank account will both thank-you for it! And rather than fighting the urge, try replacing a bad habit with a more positive one. Trade in your martini for a fresh-pressed juice.
3. Think optimistically about the future, as a positive attitude is associated with lower stress levels, longer lives, and fewer incidents of illness.
4. Budget more for self-care and prevention such as organic produce, quality supplements and massage. You’ll likely spend less on health care.
5. Build up your emergency savings. When emergencies occur, having plenty of liquid savings in a savings account, CD or a whole life policy (our favorite savings vehicle for overall safety, flexibility, guarantees and healthy returns.)
Ample emergency savings will minimize financial stress and ensure that you have plenty of cash flow to keep up your healthy habits and health insurance during periods of transition. Too many people use their retirement accounts for “savings” and it adds to their stress when “stuff happens” and they have to take money (with penalties and taxes) out of retirement accounts.
Do you need a New Year Financial Fitness check-up?