Health Is Wealth: The Connection between Financial Wellness and Well-Being
Written by Melissa Schenkman, MPH, MSJ
John Brick, CFA, has always been the kind of person who thinks about “the end game”—how what he does today will affect his life in the long run. So, it is no surprise that he chose to a pursue a career in finance for its long-term durability or that he invests in his own health daily, banking on the implications of its positive benefits for his future.
While his expertise is in asset management, specializing in knowing what people should invest in based on an individual’s financial goals and helping them achieve those, the intersection of health and wealth is never far from his thoughts.
His regimen: Fasting before 9am and trying to stop eating before 7pm. “The combo gives me a nice window to let my body heal,” Brick said. Him and his girlfriend cook at home 4-6 times a week, basically organic chicken or salmon; and he very rarely has dessert because he thinks sugar is toxic. Plus, he is in bed before 10pm most days, not to mention spending 2-3 times a week weightlifting and in the sauna.
But even with those healthy investments in his daily life, he knows that without him or us making healthy choices with finances, the stress that could ensue can derail the benefits of all the healthy eating and exercise that we would hope to reap as older adults.
“If you have your financial affairs in order and you know that you have a very solid plan built for the future with the right accounts opened and saving towards the future, you really remove a huge stress level on yourself,” Brick said.
How Financial Stress Can Impact Health
Stress is one the most visible and sometimes also invisible ways that finances and our personal health intersect.
In fact, in a 2020 study, researchers at academic centers in Philadelphia even proposed that financial health be considered a social determinant of health (a buzz word in public health since the COVID-19 Pandemic), based on their study’s results, which found strong associations between financial health and health outcomes throughout the medical and scientific literature.
Social determinants of health are defined as nonmedical factors that influence our health, such as housing.
In terms of both our physical and mental health, stress from our finances not being in a healthy state may cause us to experience the following:
Increased risk of heart disease, stroke, and diabetes
Weakened immune system
Sleep problems
Headaches and migraines
Digestive problems
Anxiety and depression
Stress-related disorders, such as post-traumatic stress disorder and obsessive-compulsive disorder
Substance abuse
Self-destructive behaviors
“I think the very picture of how well you can retire has a huge impact on your life and on your health in the end, and ultimately your lifespan,” Brick said. “I also think the earlier you start investing, the larger the numbers get, and really play a role into when you can retire. So, the difference in the type of life between someone that happily retires at 50 and someone who is struggling to make ends meet in their 70s is going be in having a very different quality of life and health.”
John Brick, CFA, is a Chartered Financial Analyst and the Chief Investment Officer at Kruse Asset Management in Chicago. He works with clients in Illinois and around the United States.
How Financial Wellness Can Improve Overall Health
It’s true. Managing our finances in a healthy way has several benefits for our health and quality of life every day and long term, which we may not have ever thought about.
Benefits include:
Reduced stress levels
Improved sleep
Increased energy levels
Improved mood
Stronger immune system
Increased ability to cope with challenges
Notably, in a 2021 study of 1,209 individuals published in the journal Social Science & Medicine, financial safety was linked to lower anxiety and favorable finances were associated with a reduced risk of depression.
Think about it from a practical standpoint. Your money can literally impact your ability to make healthy choices, as it’s often the case that what is healthy is expensive. And we are not just talking about healthcare at the doctor’s office.
Although as Brick pointed out to us, “chiropractors, physical therapy, therapists for your mental health, all this stuff takes money.”
“The more money you have in your late 30s, 40s and 50s you afford yourself the ability to go to a nice gym. You’re going to eat better food. You’re going to get the fancy salmon versus the farm raised stuff. You’re going to take more yoga classes,” Brick said.
“You’re going to go get your knee checked out faster than you would if you’re tight on money. You’re going to probably pay for that medication that you are on the fence about.”
His point being: “You're not going to let problems compound. You're going to kind of tackle a problem.”
When you combine all those actions together, all made possible by being financially healthy, they will afford you better sleep because you will not be stressed.
That’s why no matter where you are at on the millennial age spectrum (in your 20s, 30s, or 40s,) and no matter how much your income is, now is the time to make strides to become healthy in your financial life, if you haven’t already, as your longevity depends on.
“You are just putting the odds in your favor that you’re going to live a longer and healthier lifestyle than someone who has money troubles,” Brick said.
So, how do you get on the road to financial health with millennial money (whatever amount you have to spend and save at this point)?
Three Key Steps Towards Financial Wellness
Know Why You’re Doing It
“I think it starts first with that education to know why you’re doing it,” Brick said. Remember achieving financial health and wellness in your life will afford you the privileges to do all the things money affords you. This means being able to seek healthcare and medications without money being the deciding factor in accessing them. Plus, being able to purchase better food, more yoga classes, and the ability to retire earlier.
Don’t Be Afraid to Work with a Financial Advisor
Working with a financial advisor is absolutely key to finding your way to financial health and wellness, especially for the millions of millennials who did not study business or finance in school (me included). You should not have any fear in seeking someone out to advise you regardless of what your level of financial knowledge is because that’s why they choose this career path to help people like you achieve financial wellness. That said, it’s important to work with someone who you feel comfortable with.
“The second step to take towards financial wellness is to have the right discussions with someone like me to know what type of accounts to open and where to save the money,” Brick said.
He finds that a lot of people do not know that they can work with someone like him or that the topic of your conversations can and will evolve with him and other financial advisors as different parts of your life come up. Things like money for buying a house, getting married, and inheritance.
“There’s a lot of different things that happen that people make suboptimal decisions about, and as a result, they really reduce their ability to optimize in the end,” said Brick about not having financial advisor to work with.
Plus, he meets fellow millennials where we are at. He has had initial conversations with clients by meeting them at a restaurant or bar, and even answers questions with established clients via text message, if that’s your preference.
Understand the Difference Between a Balanced Portfolio and Risky Portfolio
Once you’ve made the educated decision to get financially healthy and start working with a trusted financial advisor, the third key step is to think about what you want to invest in long term. There are lots of different ways of building a portfolio—balanced or risky. “I think understanding the difference between the two and where you are in your savings plan is very important,” Brick advised us.
Information Courtesy of John Brick
Information Courtesy of John Brick
Misconceptions About Financial Advisors
You Need to Have a Lot of Money to Get Started
Just as there are misconceptions out there about people being “too young” to be susceptible to many health conditions, so too are there misconceptions about younger people having the eligibility to work with a financial advisor.
One of the biggest misconceptions: to work with a financial advisor you have to come to them with a ton of money in hand. Not true!
“I opened an account the other day for someone who’s 18, who has $1,000. And I’m like, that’s the perfect guy!” Brick said. “He may not be considered the perfect guy for everyone, but what he’s doing is perfect for himself and for me as a client. He is seeking out financial advice and starting so early that he’s going to be so well off in the end.”
For millennials who are in their mid-20s to early 40s and out in the workforce, there are lots of ways that having a personal financial advisor can help you manage your 401K, well beyond what your employer is providing, and especially when you move from one job to another. One example that Brick shared with us is the Roth IRA, a simple account that most should have. The maximum amount the IRS allows you to put in that account is around $6,000 a year.
“So, someone that’s making a good healthy salary out of school can afford to put $6,000 away because I guarantee you their vacation that they go on cost more than that, right?” Brick said. “I would love to have a conversation with some young people and say, listen, pay yourself first. If you put the money in early enough in the right account that it’s going to make a major difference in the end, and then go spend the rest.”
“Your contribution can be as small $3,000 per year just so you know, and I can still help you manage that,” Brick said.
You Don’t Need to Start Financial Planning Until You’re Older
There is this thought that an 18-year-old or a 22-year-old person should not have a financial advisor simply because they are the age they are and because they do not have enough assets (a resource with economic value that an individual owns or controls with the expectation that it will provide a future benefit).
“It’s not always about the assets. It’s about making sure you’re on the right path,” Brick said.
It’s Expensive
Most people will be surprised to learn how little it costs to have a financial advisor. “You don’t even have to pay out of pocket, and I think that is a huge misconception,” Brick told me. Any fees that you pay are completely dependent on the amount of money that you actually have in your account at the end of each quarter (every three months out of the year), and the fee is only 1% of that amount. It’s something that has been set as a standard for financial institutions, so advisors can’t charge more than that.
“Starting earlier in life is much better because it will cost you very little to start it. I very strongly believe that working with a financial professional will help you in the end, and you’re going to be a lot healthier,” Brick said.
What to Look for in a Financial Advisor
Credentials: Make sure the advisor is licensed and registered with the appropriate financial regulatory authorities. They should also have the relevant professional certifications, such as the Certified Financial Planner (CFP) designation.
Experience: The advisor should have experience working with clients with similar financial goals and needs.
Fee structure: Understand how the advisor gets paid. There are three main types of fee structures: fee-only, fee-based, and commission-based. Fee-only advisors charge a flat fee or an hourly rate, while fee-based advisors charge a fee plus commissions on investment products they sell. Commission-based advisors only make money when you buy or sell investments, so they may be more likely to recommend investments that generate commissions for them, even if they are not the best investments for you.
Portfolio management style: The advisor should have a clear investment philosophy and be able to explain how they will manage your money.
Communication style: Make sure you feel comfortable with the advisor and that they are able to communicate with you in a way that you understand.
Availability: The advisor should be available to answer your questions and provide you with updates on your financial plan.
Are you looking for a financial advisor to help you achieve financial wellness?
Talk with fellow millennial and financial advisor John Brick.
You can reach him via email at John@kruseam.com , at John Brick, CFA | LinkedIn, or via cell at 440-488-2085.
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