– Lose weight?
– Get fit?
– Be healthy?
– Live long?
– Look ‘buff’
– and, the list goes on …
You see, if you want to work on your ‘physical well-being‘ you have to define what that means …
… for you.
It will be different for everybody: for my wife it means eating strangely and exercising a lot. For me, it means, being totally sedentary, eating reasonably little/basic (except when I go out) and relying on good family ‘longevity genes’ (on my Mother’s side … hopefully, not my Father’s side of the family!) to keep me alive.
Yet, the government has managed to come up with (and, recently updated) a Food Pyramid that neatly sets out a plan for eating and staying healthy. Each ‘slice’ of the pyramid represents the relative proportion of each different food group that everybody should eat, every day.
But, the government soon found that this is enough to stop people from getting obesity-related sicknesses (cancer; cholesterol-related heart disease, etc.), but really wasn’t enough to make people, well, healthy.
So, they were forced to come up with this new version of the Food Pyramid …
What’s new about this, latest version of the pyramid is the stick figure climbing the stairs on the left hand side, like some Inca priest about to climb the pyramid at Machu Picchu for his monthly sacrifice of the young virgin (naturally, by ripping her still-beating heart right out of her chest … but, I digress).
This signifies that you can eat the right foods all you like, but won’t achieve true health unless you also exercise your body, in moderation.
One size does indeed fit all … at the most basic level.
Similarly with your ‘financial well-being‘ – while still a long way off being the Unified Theory of Personal Finance – we can at least lay out a basic Money Pyramid that will serve one and all reasonably well … enough to at least get you started; the bonus being that it might win me some friends back from the mainstream Personal Finance blogosphere.
Take another look at the Pyramid at the top of the post, and we can imagine the various segments as being common financial wisdom like:
1. Save 15%+ of your gross income
2. Pay down (and avoid all future) ‘consumer debt’
3. Increase your rate of savings by also allocating to your savings plan at least 50% of all future pay increases and ‘found money’ (inheritances; IRS refund checks; loose change from your pockets; money saved from quitting [insert vice of choice]; etc.
4. Buy instead of renting [AJC: which Financial Pyramid are you reading?!]
5. Invest for the long-term
6. You can fill in the other slices from your choice of any/all: live frugally; diversify; create an emergency fund; and so on …
And, this is certainly the Money Pyramid being promoted by most Personal Finance writers (other than the “Make Millions with No Money Down” and other ‘financial crackpot systems’, that I liken to the totally unbalanced “No [insert unhealthy sacrifice of choice: carbs; proteins; calories; glucose; food; etc.] Diet” diets).
The problem is, it might stop you from being poor (the financial equivalent, to not being obese) but will it be enough to make you Financially Healthy … a.k.a. Wealthy (however you choose to measure that)?
Probably not, which is why I have created the New Money Pyramid simply by adding the man climbing the stairs on the side:
This signifies that you can save money all you like, but won’t achieve true wealth unless you also exercise your money, in moderation.
How do you exercise your money?
Simple: you move it around! You aim high … setting a goal that has meaning to you, then:
– You invest at greater velocity (higher return),
– You leverage (the financial equivalent to exercising with weights),
… but only to the extent that your ‘heart’ (actually, your guts) can handle – start slow, get help, build up the velocity and the leverage as you get over a period of time – and, check with your ‘doctor’ before trying this at home 😉