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The Impact Health has on Wealth

Overview

After stepping on the scale and being shocked by my own COVID19 weight gain, I decided to do some research. I sifted through numerous articles and medical journals to finds where health and wealth meet. This podcast doesn't give scenarios or impacts, but it does show how health can have a real impact on wealth. The impacts of health and wealth go beyond the simple savings of medical costs. 

Transcript

Welcome back to In your business with Michael Sayer, a production of CUI Wealth Management.

 

This episode is going to be unique. Up to this point, I've interviewed guests, and I've been really fortunate to have some great interviews and some great insight from those interviews. Today I wanted to do something just a little bit different.

 

A couple of weeks ago, I was getting ready for the day and I looked over and I saw my scale, which was sitting there gathering dust, and I decided, Well, why not? I'll just see where I'm at. So I weighed myself and kind of was taken aback. I didn't realize how much my working habits had impacted my health. It shouldn't be a surprise to anyone that knows me. That hard work is one of those values that really drives me. I take a lot of pride in what I do, and I become deeply passionate about it because of that. I believe this is common for owners and entrepreneurs and those who are very goal driven. 

 

Every one of us has 24 hours in a day, you have 24 hours in a day, I have 24 hours in a day and our competition has 24 hours in a day. And I think it's really easy for us to think, hey, if I can outwork my competitors, then I'll get a leg up. And everybody, I think falls into this. Every now and then. But we forget how much each piece of our lives impacts the other pieces of our lives. 

 

Albert Einstein was once giving credit for the phrase; compound interest is the eighth wonder of the world. He who understands it earns it he who does not pays it. Now, compounding interest is the eighth wonder of the world. I think compounding inches to the waistline must be the ninth wonder of the world because, you know, you kind of live your life and then all of a sudden you're like Wait, how did I get to this point? How did my help that theory this much? 

 

So I started putting together an exercise routine and started to be more conscientious about what I was eating. As soon as I started working on having a healthier routine, the financial nerd side of me started thinking, where does financial and physical health meet? I started doing a whole bunch of research and looking up articles in different journals to get an idea of what some of these factors might be. 

 

Here are a few stats that are kind of interesting from the National Bureau of Economic Research. There's a couple different factors that they get into a little bit more detail to keep everything uniform, but in general, based on the population and everything that they were looking at, healthy people earn about 28% more than unhealthy people, at least according to the data that was analyzed. Now another piece of that study might explain it a little bit more because unhealthy people work less in general than healthy people. So, 90% of healthy people participate in the labor supply compared to 70%, who are unhealthy. And finally, in this group, people who were healthy tended to be more wealthy than unhealthy. Obviously, there's a lot of factors that can influence this data. But I think there's a pretty good case for striving for a healthy lifestyle. And we're going to see a little bit more of that from some more data that I've gathered. 

 

One thing that I strive to do and it's important to me is that if I am asking a client or advising a client on something, that I have to be willing to do that myself an implement those same principles in my life. Now, obviously, I'm not going to go and tell people that they need to be healthier, but part of my job is to help people grow their wealth and make good decisions. This is what I found is I have strived to make better decisions for my health. 

 

You have probably heard of that story of the man who's in the forest trying to chop down a tree. And he's undaunted, he's sweating. He is working his hardest to get this tree to fall. And if he would have taken just a little bit of time to sharpen the ax, then it would have fallen down a lot easier. Personally, this is one of the things I've noticed as I've tried to do a better job at taking care of my health is that I found that I have more energy and can be more productive. And this is exciting to me because this means that I can do a better job personally, at taking care of my clients and making sure that their needs are met. The second connection that I found with health and wealth is one of those ones, it's a little bit more obvious. In recent years, there has been a focus on the impact that healthcare costs have on the average American. Obviously, if you are spending money on health care costs, that is going to be added to your overall wealth. And it is not hard to draw the conclusion that if you are taking care of yourself, you are likely going to be spending less on health care costs. 

 

An article published by John Hopkins Bloomberg School of Public Health gives us some numbers behind it. Here are some interesting stats from that article. A 20-year-old who goes from being obese to overweight would save an average of $17,655 in direct medical costs and productivity losses in their lifetime. A 50-year-old in this same scenario would save an average of $36,278 in their lifetime. Keep in mind that this is based on going from obese to overweight. I'm positive that there are even greater savings in going from overweight to a healthy weight. We're not talking about the beach body and washboard abs, but we're talking about small changes and long-term financial impacts from the decisions that you're making right now. 

 

There are a lot of things in our lives that are completely out of our control. Some people are born with chronic conditions, and some people have accidents or incidents that have impacted what they can and cannot do. But we cannot really focus on the things that we cannot control; we must focus on the things that we can control. The third resource talks a little bit about some of the things that we really can control a little bit more in our lives. 

 

The third one is from the Journal of the American Heart Association. And we can see how the effect of optimal exercise your teens have on health care costs. The average healthcare expenditure of those with optimal physical activity is 2,328 compared to 5,475 for those without optimal physical activity per year per capita. 

 

Let's summarize these points. Healthy People tend to earn more. There can be lifetime cost savings for losing weight, and exercise can help lower health costs. I think this conversation really scratches the surface. There's a lot of things that we didn't cover that could potentially help you financially by doing those things to take care of your body. So, without even bringing endorphins or fitting into a swimsuit into the conversation, there can be some real financial benefits and incentives to be your best self when it comes to your physical health. 

 

So far, the discussion has been focused on us as individuals, but let's take a step back and see the bigger picture. Have you ever jumped into the shower expecting a nice, warm shower and when you turn on the water, it's cold? It's the worst. The only reason why you end up with a cold shower is that Capacity didn't meet the demand. So, if you don't want to run into that situation again, you either need to increase the capacity of the water heater, or you need to decrease the demand. Now let's tie this into the bigger picture. 

 

In November of 2019 BlueCross BlueShield published an article called the economic consequences of millennial health. Two points that stand out to me in this article is that under the most adverse scenario, those treatment costs are projected to be as much as 33% higher than Generation X experienced at a comparable age. The most adverse projection is from this article shows that lower health alone could cost millennials more than $4,500 per year in real per capita income. compared to similar age generation Xers. The US already spends over 18% of its GDP in medical expenditures, what this all means That the decisions that we make for our own personal health not only can impact our financial wellbeing, but also the financial wellbeing of society as a whole. The more people you have metaphorically demanding hot water, the bigger the tank, you're going to need to meet that demand. And there are costs associated with that. Now you have one more reason to take care of yourself and watch out for your own health. My challenge to you is to do something today, a baby steps in the right direction. Here's to health and wealth, cheers.

 

Securities and investment advisory services offered through Woodbury Financial Services Inc. Member FINRA s IPC, a registered investment advisory firm insurance offered through ci Wealth Management Seaway Wealth Management LLC and Woodbury Financial Services Inc. are not affiliated entities. See why wealth management is located at 5965 South 900 East suite 150 Salt Lake City, Utah 84121


Bibliography

Johns Hopkins Bloomberg School of Public Health. (2017, September 26). Weight Loss For Adults at Any Age Leads to Cost Savings, Study Suggests. Retrieved from jhsph.edu: https://www.jhsph.edu/news/news-releases/2017/weight-loss-for-adults-at-any-age-leads-to-cost--savings-study-suggests.html#:~:text=If%20the%20same%20person%20were,save%20an%20average%20of%20%2418%2C262.

Journal of the American Heart Association. (2016, September 7). Economic Impact of Moderateā€Vigorous Physical Activity Among Those With and Without Established Cardiovascular Disease: 2012 Medical Expenditure Panel Survey. Retrieved from ahajournals.org: https://www.ahajournals.org/doi/full/10.1161/JAHA.116.003614

The National Bureau of Economic Research. (2017, October). https://www.nber.org/papers/w23963. Retrieved from nber.org: https://www.nber.org/papers/w23963.pdf

BlueCross BlueShield. (2019, November 6). The Economic Consequences of Millennial Health. Retrieved from https://www.bcbs.com/: https://www.bcbs.com/the-health-of-america/reports/how-millennials-current-and-future-health-could-affect-our-economy?utm_source=linked_in&utm_medium=social&utm_campaign=hoa_q419&utm_term=national&utm_content=moody%27s_report_3

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