More Than Finances

When thinking about our physical health, it’s not uncommon for people to take a holistic approach—that is, we think about ways we can practice being healthy overall, like being particular about our diet, managing stress, getting plenty of exercise, consciously managing our mental health, and visiting medical professionals frequently and proactively. Keeping ourselves healthy as a way of life and as an active favorite hobby will result in an improvement in our quality of life, for both ourselves and our families. So, why not take this approach with every aspect of our lives, including our financial lives?

The answer lies in actually applying a similar holistic view to our overall financial lives. Holistic financial health means investigating all aspects of financial matters that may affect us, not only today but well into the future. This means analyzing daily details of all elements that affect our bank accounts: home mortgages and expenses, car payments and expenses, credit cards, credit lines, charge accounts, animal and pet expenses, utility expenses, food expenditures, clothing expenditures, all types of insurance and tax payments, education expenditures, and children’s health and insurance expenditures. Additionally, very critical elements involved in financial health must include management of interest expenses paid as a percentage of income, personal equity growth, and ongoing investments and financial planning together with goal setting and achievement.

Many financial professionals will give you advice on specific products, services, or investments. They might advise you on IRA matters or your 401(k) or help you set up a 529 college savings plan for your children. But financial professionals who provide comprehensive holistic advice will focus on your overall financial life in conjunction with specific financial interests and concerns rather than talking only about investment portfolios without an economics discussion integrated with personal financial planning and how your investments will impact your future. Without guidance about your specific short-term goals and long-term aspirations, your investments are really only ‘speculations’ portfolios. And why is this potentially a problem? It’s a problem because: (1) you fool yourself into thinking that speculating is investing, (2) speculating does not require time, knowledge, or purpose—it is ‘entertainment’ with a hope of profit rather than the placement of funds in a strategy design that has real identifiable analytic substance that make growth much more likely, and (3) speculation often puts money at more risk than realized, either passively or actively, that may inadvertently put your funds in jeopardy and may be lost.

A holistic approach an investment advisor might take includes: “What is the intended purpose for your investments?” and “What do you want to accomplish between now and retirement?” and “What do you want your life to look like when you retire?” If you are now retired, it might include: “How will your current and projected health affect your withdrawals from your investments?” and “What cash flow needs for your lifestyle do you have so that we can project the life of your saving and investments?” All expenditures affect our financial health, which is why it’s so important to consider all aspects of your life when thinking about investments and their purpose.

Most importantly, holistic financial planning often leads to a deeper, more trusting relationship between you and your financial professional. Because they are involved in many aspects of your life and your goals, they understand how they can help when you experience difficult and confusing financial situations such as divorce, sudden job loss, critical illness, or even just buying a new home or car.

A trusted investment advisor can go a long way when it comes to managing your financial health. If you’re looking for someone who can help you reach your investment goals while also aligning with your values and considering major life events, a holistic-oriented financial professional can help.