Monday, May 12, 2008

Invest In Your Most Important Financial Asset - Your Health

The most important financial asset each of us owns is our ability to earn money. Specifically our earning power. But we can only work if we are of sound mind and body - i.e. we need to be healthy. Staying healthy and being able to work is a more powerful financial asset than our investment portfolio and our real estate holdings, particularly in today's market.

Yet most of us don't take the same level of care managing our health the same way we do our mutual funds. We spend more time evaluating the performance of the stock funds rather than how well our health insurance plan does to keep us healthy. Many of us sit down in front of our computers watching our bank account fluctuations rather than actively exercising and eating well to ensure we have the opportunity to make more money by staying healthy.

If we valued our health as much as we did our other financial assets, then we would take better care of it by quitting smoking, limiting alcohol intake, and getting adequate sleep. We would only seek out insurance plans that were best at promoting our health much the same way we would select mutual funds with a high rating by Morningstar and a solid ten year return. Instead of being distracted by the latest me too drug and newest medical malady, we would be focused on getting the boring hardly sexy preventive tests done like mammograms, colon cancer screenings, and cholesterol, much the same way we've been taught to save money early and often into financial investments we understand and are familiar with.

Too many of us treat our health the same way we do our retirement planning. We don't take the time and effort to do the little things that matter and then when we want to retire we find out we didn't do enough and can't. With health, many ignore the important preventive interventions only to develop a more complicated and expensive medical condition that should have been easily addressed had it been given priority. Instead of having a long productive and high quality of life, the individual now faces costly medical bills and often lost income because of the illness. People don't realize how fragile good health can be for if they did they would be much more careful with it.

A RAND study found that during a ten year period for individuals between the age 25 to 54, those in very good health who then described their health as excellent a decade later doubled their net worth. Those, however, that identified themselves as being in poor health saw their net worth shrink by half.

As your stocks and real estate holdings become less valuable, be sure to keep your most important financial asset in tip top shape. On average our healthcare system makes sure that you get the right preventive care only 55 percent of the time so like any of your other investments, take the time to educate yourself and then act on the information. Maintain a healthy weight, ask for the preventive tests shown to save lives, and partner with a primary care doctor, who is your advocate in keeping you well. Once you protect your most important financial asset, then any downturn in the market can be managed because as long as you are healthy, you can make more money. Having more money, however, doesn't necessarily mean one can acquire good health.

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