I’ve often said that, in many ways, health and wealth are similar (read here). Like all analogies, there is a point at which they fall short. But sometimes, it’s easier to learn a new topic when you can hook it onto a subject you understand well.
Both health and wealth have many factors that determine their success. You can get far in health by eating a great diet, but you’ll do far better when you combine it with exercise. And those benefits grow exponentially when you supplement that with great gut, bone and brain health. Add managing stress and strong mental health, and you have a pretty holistic package.
Your financial health or wealth are also multi-dimensional. You will do well to make sure you aren’t in debt and wasting money on paying interest. It’s most definitely the cornerstone. But you’ll do even better if you save in addition to not being in debt. And the benefits of that saving grow exponentially when you supplement it with good investment, tax and risk management strategies.
There are 7 steps to wealth, that mimic 7 steps to health.
- It’s impossible to change your health or wealth without having a good enough reason. “Just because it’s good for you” is never a strong enough pull to change behaviour. Because let’s not kid ourselves – sitting on the couch with a tub of ice-cream is far easier than going for a run! I’m an expert at that (Dulce de Leche is best!). And buying divine things is far more pleasurable than investing money… especially in the short term. So you need a clear detailed vision that you hold so strongly, you never doubt you can do it… and the decision seems a no brainer. Write it down where you can see it every day, draw a picture and put it in your closet, visualise it every morning.
- For both, success starts with your daily mindset. And as my dad has always said, “You’ve gotto get your mind right”. For most of us over 30-something, we’ve worked out by now that crash diets don’t work. And ‘get-rich-quick’ schemes don’t work either. But we’d still like to reach that stage of not worrying about health… and wealth. You might not know yet what will work, or how you take it forward, but you do know deep in your heart that it’s something that needs to be in your daily, weekly and monthly habits. There’s no shortcut.
- There is a point where bad health or bad debt are dangerous for you. Obesity can be dangerous for your heart, vital organs, and ability to survive let alone thrive. Similarly, being in debt can be dangerous for you and your family if you get in debt with the wrong people, or lose the roof over your head. Both cause emotional stress that can cause depression. Desperate times call for strong measures and good support systems to help you get your head above water.
- Then there’s the place many people get stuck in – nowhere land. This is when you’re not very healthy – you’re overweight and unfit. But you just can’t seem to make a permanent change in your eating and exercise habits to budge the scale or enjoy the benefits of health. You know you need to do something more, and consistently, but don’t have the motivation to keep it going. It’s the same with your finances when you’re not in much debt – you may not be in debt at all – but you’re not really making ends meet the way you’d like to. And you’re definitely not saving. It’s always in the back of your head. But you find yourself pressing the snooze button each day instead of getting up early to do something about it.
- Next comes that stage when you’re ready to act – but you have no idea where to start. You try your friend’s latest diet, maybe sign up for gym. But you truly don’t know what will work for you – so you wander around the gym’s machinery trying a little bit of arms here and a sit-up there. For money, this is when you actually have managed to save some money and could start investing, but really don’t know where to start, and what’s right for you. You try out the latest tip from your friends, and that share takes a dive two weeks later. You know you need help, but have no idea where to start or what will work. And even though you know you should save, you also want to live a little, because darn it, you work so hard!
- And then there are the health nuts! These are the ones that are very active, run marathons and do triathlons, and want to fine tune their diet and exercise program to lift their game further. These are the people who are investing, and want to advance their investment strategies.
- There’s always the stuff not many put in place – but are crucial for when trouble hits. Health insurance (medical aids) are needed for when dramatic medical expenses take place. And whilst we hope it will never happen to us, stuff happens. And these are the safety nets that help you in case things go pear shaped. In the area of money, those are things like life insurance and other estate planning tools such as wills, trusts and putting in place guardianship for your children. As well as events that impact your ability to earn money – such as disability insurance, income protection and critical illness (or dread disease).
And how do you address each step?
This is the first of a 9 part series.
- Step 1 is about understanding that without a compelling reason to change behaviour, you won’t. And that reason usually comes in two forms: A sudden A-Ha moment of insight or crisis, or a very strong visualisation of something different. You can watch the video here
- Step 2 is around discovering The One Thing you could make into a daily habit that would make the most impact on your wealth. You can watch the video here
- Step 3 tackles the heartbreak of debt and the steps you should follow to get out of it. Not healthy debt such as a mortgage – the kind of debt that strangles you. You can watch the video here
- Step 4 is for people who don’t have debt, but who are struggling to break through the barrier of being able to start saving regularly. You can watch the video here
- Step 5 moves us into how to start investing, and what’ not to do. You can listen to the podcast here
- Step 6 looks at how we advance our investing – like moving from a 10k run to an iron man
- Step 7 covers how you protect the lifestyle you’ve worked hard to create. You can listen to the podcast here
- Lastly, you stand a greater chance of success if you follow these two fundamental building blocks of success