A recent article I read by David Booth, Founder and Chairman of Dimensional Fund Advisors, made an interesting observation about the relationship between health and wealth. His article, Practicing Healthy Habits, Pursuing Wealthy Outcomes, relates how he looks at investing compared to how Peter Attia looks at living longer in his book Outlive: The Science & Art of Longevity. Booth says living a wealthier life has the same underlying principles as living a healthier life.
The three main similarities between living healthier and living wealthier, according to Booth, are:
- There is no one-size-fits-all solution.
- There are no quick fixes.
- It is better to prevent problems than to fix them.
These concepts are intuitive from a health perspective, but let’s examine them through the investment lens.
First, let’s talk about a no one-size-fits-all solution. I’ve written about this one way or another consistently for the past several months. The reason there is no one-size-fits-all solution is that different people have different goals, different means, and different risk tolerances. As a result, what someone would call a successful investment strategy another might not.
Next, the concept of no quick fixes is about dealing with the reality that the market is unpredictable. Investors will likely deal with inevitable volatility and loss in the short term. Creating a wealthier life requires resolve and patience to endure the peaks and valleys of the market.
Last is preventing problems rather than fixing them, which is all about planning. Back to comparing health and wealth, preventative health is about having a plan, getting checkups, and making healthy choices. The same is true for financial planning. Having a plan defines where you want to go and outlines what you must do to get there. Checkups are talking to your CERTIFIED FINANCIAL PLANNER™ regularly to calibrate your plan. Healthy choices are about all things in moderation and knowing what activities will disrupt your plan.
I would encourage you to give David’s article a read. He goes deeper into the investment principles they (Dimensional Fund Advisors) espouse and draws further comparisons to healthier living. At Valiant Wealth, we ascribe to many of these principles, and I advise my clients to take a measured and proactive approach to achieving their financial goals.
My biggest takeaway from the article and this concept, in general, is that all planning lives and dies based on discipline. To help with that, having an Advisor is like having a personal trainer in many ways. Yes, you can do it yourself, but a good Advisor will help hold you accountable and keep you on track.
Feel free to reach out if you have questions about how to live a wealthier life.
