Whether you consider yourself to be in good or poor health, you may be using either as an excuse not to plan for your financial future. In fact, neither condition changes the need for planning; they merely affect the plan's implementation. As we discuss the impact of health on your overall financial plan, let me remind you that we must examine both physical and mental health.

When we began our analysis of what I call "The Investment Way of Life", we said that your goal on this journey was to attain financial freedom. The means to that goal is the accumulation of wealth. Webster's derives the word wealth from the Middle English word wele: a sound, healthy or prosperous state. Many of us were raised on the goal of becoming "healthy, wealthy and wise". The interrelationship of wealth and health makes this the first of the four priorities of life (see November 1992 Financial Advisory) you must examine as you embark on designing your financial future.

If you are in a state of good health, you are likely to experience feelings of self-esteem, optimism and happiness. These by-products of good health produce motivation, productivity and creativity. Under these circumstances you should do your planning, for you are at your best to make decisions and to develop strategies.

Unfortunately, those same feelings of optimism and happiness often produce a contentment and complacency that prevents some people from planning. They assume there's plenty of time to do that later. In an attempt to instill a sense of urgency in my clients who feel that way, I often ask them this question: "What if you died on your way home from my office today?" I'm not trying to be macabre; I merely want them to appreciate that failing to begin to plan can have sudden and dire consequences, and that the time to begin planning is now.

On the other hand, sometimes you really may experience periods of poor health. At those times, your vision of the future can become restricted and even distorted. An emotionally devastating event, such as a divorce or the death of a spouse, can have the same effect. Under those conditions, do not attempt to plan, for you are bound to make mistakes. Instead, wait until you have stabilized (both mentally and physically); you will be better prepared to make objective decisions about your long-term goals.

When you have clearly determined the state of your own physical and mental health, you then know a key ingredient for your plan. You know how much time you may allot for the fulfillment of your goals.

Additionally, the information about your health provides the raw data necessary for designing or rearranging certain of the elements within your overall plan. Are you in need of more or less life insurance? Is your medical protection adequate? What about disability insurance? Use the insights you gain from examining your health (and that of your loved ones) to determine the necessary succession documents you will require: wills, trusts, powers of attorney and/or conservatorships.

Of equal importance at this stage in the process, you must take a good look at your awareness, knowledge and judgement. This includes: uncovering any biases you might have about particular types of investments; determining your tolerance for risk; judging your ability to change past behaviors that prevented you from accumulating wealth; and discovering your willingness to take the actions necessary to proceed with your plan.

In this self-examination, you may discover unexplained anxieties or fears. Generally, these can be attributed to a lack of knowledge or information, either about the overall planning process, or about particular kinds of investments. Of course, this is an ailment easily cured with the abundance of financial how-to books available today. The more you learn, the more comfortable, competent and confident you will feel.

Finally, nothing shatters a financial strategy like a sudden debilitating illness—unless, of course, it's been planned for. The ultimate purpose of investigating the health priority of life before you complete your financial plan is to ensure the fulfillment of your goals, whether or not you can personally direct them.

"…nothing shatters a financial strategy
like a sudden illness…"

The Priorities of Life
Part I – The Health Priority

Select Additional Articles from Jerry's Corner The Investment Way of Life Four Cornerstones of Success Excuses... More Excuses The Wealth Cycle Investment & the Wealth Cycle An Economics Primer The Life Cycle Creating A Saving Culture Entrepreneurialism A Fortune in Your Hands Look to the Pros - Introduction - Part I - Insurance - Part II - Stock Broker - Part III - Real Estate - Part IV - Attorney - Part V - CPA The Priorities of Life - Introduction - Part I - Health - Part II - Career - Part III - Relationship - Part IV - Home Elements of Investment - Introduction - Part I - Risk - Part II - Management - Part III - Flexibility - Part IV - Liquidity - Part V - Cash Flow - Part VI - Rate of Return - Part VII - Appreciation - Part VIII - Leverage - Part IX - Taxes

Moorman and Company, an accounting and personal financial management firm based in Palo Alto, serves the San Francisco Bay Area, Peninsula, and Silicon Valley from Hillsborough to Saratoga-Los Gatos, including Atherton, Menlo Park, Los Altos, Los Altos Hills, and Cupertino.