Money and health. Two very important factors, each with the potential to add either happiness or stress to our lives depending on how we manage them.
You can be a gazillionaire (that means you have lots of money), but with poor health, you won’t have the ability to fully enjoy your fortune. Heart disease, diabetes, or worse yet cancer is serious business that no amount of money can do away with. Having lots of money in itself can also create stress which can lead to poor health as well.
It’s also possible for us to be in incredible shape and exude what it means to be healthy but manage our finances in a way (not evaluating investments or budgeting) that becomes detrimental to our health because again, depending on how we’re managing our money often dictates our stress levels.
I’m no genius, although at times I like to pretend that I am, but it’s obvious that there’s a direct connection and many similarities between finances and our health. Instead of debating or contemplating which of the two is more important , I say we work on improving both.
I recently read an article talking about compound interest. In case you’re wondering what compounded interest is, we’ll keep it simple by defining it as small decisions you make today (financially) that pay you huge dividends over the course of a lifetime. If you’re interested, you can read the full article here.
[box] Compound interest is a very powerful financial concept that can also be
applied to our health as well.[/box]
COMPOUND INTEREST / COMPOUND HEALTH
Let’s take a look at 10 facts about compound interest and how it applies to our health as well.
1. Anyone can benefit from compound interest. There’s no need to be a Wall Street wizard or a Harvard MBA. Almost any investment will earn compound interest if you leave earnings in the account.
HEALTH: Whether you know what proteins or carbohydrates are or not, it doesn’t matter. Anyone can benefit from small health decisions they make on a daily basis such as drinking more water or walking 30 minutes a day.
2. Compound interest is a double-edged sword. It’s great if you’re routinely saving money, but it can be cruel if you’re borrowing money.
HEALTH: Making small healthy decisions can work in your favor just as making small unhealthy decisions on a daily basis can work against you, slowly but surely contributing to heart disease, diabetes, and other health ailments.
3. You want savings to compound as often as possible. It’s better if you compound quarterly rather than annually when you’re saving money. If you’re borrowing, just the opposite applies.
HEALTH: When your making small healthy decisions on a daily basis, you want to see results faster and on a regular basis versus if your making small unhealthy decisions, then you definitely don’t want to see the results of these unhealthy decisions faster and regularly, but unfortunately you will.
4. Time is on your side. The longer money compounds, the faster it grows. Money growing at 6 percent per year will double in about 12 years, but it will be worth four times as much in 24 years.
HEALTH: The small healthy steps you take today will pay you nice health dividends 12 years from now by allowing you to maintain an active lifestyle and even more so 24 years from now by countering and essentially slowing down the aging process.
5. Time is not on your side. Credit cards and other open-ended accounts use compound interest against you. That’s why “minimum payments” are likely to keep you in debt forever.
HEALTH: Small unhealthy habits such as smoking, eating processed foods, and dehydration continue to work against you daily therefore keeping you health deprived or in health “debt”.
6. Don’t let today’s low interest rates discourage you. It’s true that banks aren’t paying much on savings accounts. But many mutual funds average a higher return and have very low minimums and no sales charges. If you can’t apply a few dollars to savings, most debts (think home or credit cards) will allow you to add any amount to your payment.
HEALTH: At the very beginning, you may not see significant weight loss happening by making small healthy choices. You will on the other hand begin to feel better and more confident in your ability to make small healthy changes leading you to make even more healthy choices, and ultimately leading you to your weight loss goal.
7. It adds up faster than you think. If you were to save $5 per month, you’d earn 5 percent interest compounded each month and with that continually for 10 years you’d have put $600 into savings. But the account would be worth $776. And, even if you didn’t add a single dime, it would be worth more than $1,500 in another 15 years.
HEALTH: Drinking more water, walking 30 minutes, eating one salad a day, eliminating sugary drinks, sleeping an extra hour per night. Any of one these steps by themselves performed on a daily basis would improve your health exponentially, let alone performing several of them, if not all of them.
8. Compound interest can free you from credit cards. Suppose your interest rate is 14 percent and you add just $5 per month to your payment. In 10 years, you’ll avoid $1,315 in payments.
HEALTH: Small healthy steps performed regularly on a daily basis can help to eliminate stress, anxiety, depression, and need for different medications, not to mention the prevention of chronic health problems like heart diseases and diabetes.
9. You don’t have to be rich to make compound interest work for you. The principal works the same whether you invested $100 or $100 million. The millionaire may have more investment options, but even the poorest among us can use compound interest to reduce the amount that we pay credit-card companies and payday lenders.
HEALTH: You don’t need to buy the latest fitness equipment, invest in expensive athletic gear, purchase exclusive gym memberships, subscribe to health and fitness publications, or invest in personal health services (unless of course you want to). The small healthy choices mentioned such as drinking more water, walking daily, and getting more sleep require zero dollars.
10. Compound interest requires you to sacrifice today to reap a benefit tomorrow. It’s true that you’ll need to do something to save a few dollars today. But, it’s certain that the future reward will be greater than the sacrifice.
HEALTH: Edward Stanley said it best… “Those who think they have no time for exercise will sooner or later have to find time for illness.” Small daily healthy steps today will pave the way to a healthy future.
[box] “The food you eat can either be the safest and most powerful form of medicine, or the slowest form of poison.”[/box]
~ Ann Wigmore ~
Here are two smalls steps I am currently taking toward improve my health and finances.
HEALTH = Veggie Cleanse
FINANCES = 52 Week Money Challenge
What are some of of the small steps you’re taking daily or weekly to improve you health and finances? I’d love to hear all about them. Please share them with me in the comments below.