11 July 2007 6 Comments Print This Post  Email This Post

What if eating healthy and exercising can not only increase your chances of a long life, but also make you massively richer so you can enjoy those extra years? Thats exactly what can happen if you cut out unhealthy expenses and use that money for investing. Yesterday, Trent over at the simple dollar posted a great article about the long term financial effects of smoking. His father smoked for 50 years and Trent estimated that if his father had used that smoking money to invest and earned a 10% return on his money every year, he would have a staggering 2.6 million dollars today. That is insane. There is some debate on this calculation because cigarettes didn’t cost the same 50 years ago, but I think we can all agree that the number, although maybe not $2.6M is likely to be a huge number. That article got me thinking about the relationship between staying healthy, and being financially healthy, and I realized that it goes hand in hand.

A Few Dollars Here and There
Think about what a lot of us eat, drink and spend on daily. I know a lot of us drink coffee. If we replace coffee with water, you’re staying healthier and also saving about $4. Sodas need to be cut out too. How about eating out? If you eat out, either for lunch or dinner, you can likely prepare your own meal and save about $5 each time. What about gas? Bike to work or walk to the store twice a week and you will get exercise while saving maybe $10 worth of gas. There are many other expenses here and there that aren’t healthy for us physically and financially. Looking at the above examples, lets estimate that by being healthy, we can save an average of $25 a week. This fits right in to the fundamentals of wealth building that I always mention. By being healthier, you can save more money, which lets you invest more money.

Possibilities

Rather than spending on unhealthy habits, instead take this $25 a week, lets say $100 a month, and invest it in a mutual fund or other investment vehicle earning 10% return a year. We know that with the power of compounding, over 30 years you would accumulate $226,049. Not bad for drinking water and exercising right?

My Experience 

I’ve personally found a lot of success by drinking more water, and eating more at home. About two years ago, I started replacing soda, coffee, and everything else with water at home or at restaurants. I would drink filtered water at home and ask for a glass of water with lemon at restaurants. I then started eating more at home. Between then and now, I’ve lost 30 pounds and I’m keeping it off. I’m at about 178lbs for the last half year. I feel better than ever financially and physically. Now I just have to stop driving as much, which is going to be tough.

Longer Life, More to Enjoy 

For the sake of the example earlier, lets say most of us is retiring in 30 years. From that simplified example (didn’t take into account taxes), one would have about $226,049 by staying healthy. Lets say your “enjoyable years”, which are the years between retirement and when you’re too old to do fun stuff, is 10 years. However, because you invested not only in your financial future but also your health, you increased your “enjoyable years” to 20 years. This is actually more important than just the financial increase. You now have more time, and more ability to enjoy the money all that you have saved up. After all what good is a lot of money if you can’t enjoy it right? While you can’t control things like illnesses and unforeseeable tragedies, you can put yourself in a position where your chances of financial prosperity and good health are much higher. So think twice when you spend money on that nasty habit, your future self will thank you for it.