By Kimberly Clouse, Private Client Advocate and Chair of Covestor’s Advisory Board
When it comes to keeping New Year’s resolutions, the chances of success are pretty bleak. According to research from the University of Scranton, only 8% of Americans are able to achieve their resolution.
With that rather depressing data in mind, I am taking a different approach with my resolutions for 2014.
In late 2013, I reread Whitney Johnson’s provocative Harvard Business Review piece, Instead of Making Resolutions, Dream. Whitney’s key question: Why do we perennially return to resolutions that seem based on the idea of fixing all the things we’re doing “wrong?” Instead of starting 2014 trying to “fix” all of the wrongs, Whitney suggests that figure out what our objectives are and envision the future. While resolutions are about “shoulds,” dreaming is about hope and potential.
As I recently discussed on Covestor Radio, this year, I am focusing on two objectives — health and wealth.
Specifically, I want to lead a healthier lifestyle (eat better and exercise more), and save more money for the future.
Most people think of health and wealth as “separate” goals but, in fact, both aspects of life are closely related. And instead of thinking about all of the chocolate I ate and money I spent in the past, I am going to think about what achieving my health and wealth goals will bring me. Instead of the “should,” I am going to focus on the possibilities.
Health and wealth are both important resources for leading a happy life. People in poor health may die before their average life expectancy and spend thousands of dollars on health-care related expenses during their lifetimes.
Healthier folks may live longer and therefore need more financial assets to ensure that they don’t outlive their money.
Research cited by Brenda Schmitt of Iowa State University indicates that four factors strongly predict happiness and well-being in most cultures: health, economic stability, work/productive pursuits, and family relationships. So, among other factors, people are happier when they are healthy and financially secure.
When you improve your wealth, your health is often positively affected. Not only can you afford to spend more on living a healthy lifestyle, the stress associated with financial difficulty that may cause worry, migraines, insomnia is reduced.
The opposite is true – taking care of your health has a positive effect on wealth. Healthy people are often more productive at work and more likely to get promoted and earn larger salaries than unhealthy people. They have fewer work absences and medical expenses that erode their wealth.
More working investors say their greatest financial worries are rising health-care costs and running out of money in retirement.
Maintaining good health increases the odds of being productive and working as long as you want to instead of retiring because you have to (e.g., disability). Health is a financial asset, just like stocks and bonds. It decreases the odds of costly medical bills today and/or later in life.
Without good health, you can’t earn an income and build wealth. This can translate into significant money.
In my experience, a lot of people think they must make major changes to be healthy and wealthy. And major changes are hard to implement, so many people freeze and do nothing, saying that they might start tomorrow.
With health and wealth, just getting started is the hardest and most important part. For health, it can be drinking more water or holding a plank for 30 seconds a day. For wealth, it can be tracking your expenses or investing a small amount of money each month.
You could also just ramp up already positive behaviors such as walking more steps each day and increasing the percentage you contribute to your 401(k) plan.
So rather than New Year’s resolutions, let’s focus on New Year’s objectives. And I am personally focused on happiness, health and financial security.
