Byron Moore: Real world financial fitness

The importance of financial health check

People are living longer, interest rates are at record low levels worldwide, people do not put aside a regular monthly saving, university fees are increasing.

WhByron Moore on Financial Fitnessat does it mean to be financially healthy in the real world? What would that look like for an average working person?

Source: Byron Moore: Real world financial fitness

Q: What does it mean to be financially healthy in the real world? What would that look like for an average working person?

A: Remember when jogging was born?

OK, maybe not born, but at least made popular. In the late 1970s two things converged to explode the phenomenon of human beings trudging up and down neighborhood streets in search for the fountain of youth.

The first was a book. The second was a movie.

Jim Fixx’s “The Complete Book of Running” provided the holy book for the new religion of fitness. The book featured Fixx’s perfect runner’s legs on the front cover, silently promising readers similar results to any who would buy the book and commit to join him on the road. The book’s sales began to drop when Fixx fell over dead one day…after a run.

The movie was of more enduring stuff. “Rocky”…well, need I say more? It was the first movie I’d ever seen to feature a workout scene with an actor who looked like he had really done the workouts. The music, the one armed pushups, the raw eggs, the grey sweat suit and Chuck Taylor sneakers and (of course) the legendary run up the steps of the Philadelphia Museum of Art.

I was so inspired I ran my first marathon that next fall (which was a disaster, but that’s another story).

My point is that for about 30 years, I thought that’s what fitness was – long distance running. In that paradigm strength training was mostly about cosmetics, and stretching was something you did to maintain your fitness for running.

It was only after my unwavering allegiance to this fitness paradigm betrayed me (bad back, stiff hips, decreasing mobility, pain) that I began questioning my assumptions and went back to the drawing board.

That’s when I discovered the world of functional fitness championed by its brand leader, CrossFit. CrossFit claims that fitness is actually a balanced combination of many components: cardiovascular endurance, stamina, strength, flexibility, power, speed, coordination, agility, balance and accuracy.

These are the ten components of human physical performance that most produce the desired optimized performance result, whether that is walking, running, swimming, jumping, climbing, carrying a load of laundry or protecting oneself.

Not only that, but in real life, these physical abilities are usually required in unexpected times and places and require varying levels of intensity.

All that is why CrossFit describes itself as high intensity, constantly varied, functional movement. Because that’s the way life is. It is what life requires of us.

So after 30 years, not only have I finally broadened my own ideas about what constitutes a person’s physical fitness, but also a person’s financial fitness.

I’m concerned that, just as I limited my definition of physical fitness to one dimension (cardio vascular endurance), too many today limit their definition of financial fitness to one dimension – investments. To be sure, investments are a critical part of the overall financial fitness landscape. But they are not the entire landscape. There are more dimensions that just the one.

The financially-fit person needs the long-term endurance that only investments can provide. But she also needs the stamina and strength that a well-coordinated insurance portfolio supplies. As for financial flexibility, speed and coordination, these come from healthy savings. Power and agility can come from the proper use of debt. And finally balance and accuracy are the results of an overall plan coordinating the previous mentioned components.

It isn’t enough to just have some of these things. Just as functional physical fitness requires the ability to perform at a moment’s notice, under varying degrees of stress and with varying degrees of intensity, count on similar demands in your financial life.

That means you need a comprehensive plan, properly funded, regularly reviewed and kept up to date. Such a plan is no luxury – it’s a necessity.

Because life – physical or financial – isn’t lived in just one dimension.

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