Healthy 2017: Investing in Your Health Can Be as Important as Contributing to Your Investments

Pop quiz: What has one of the biggest impacts on financial security after the age of 65? If you guessed health, give yourself a pat on the back— and maybe a fresh spinach smoothie to go along with it.

You don't have to look hard to find studies showing the close link between socioeconomic status and health. People with higher levels of education, occupation or income — or any combination of these — tend to enjoy better levels of overall health. The World Health Organization says the bigger the gap is between the rich and the poor, the greater the difference in health. It makes sense. Those with more capital have the resources to invest in necessities like food and shelter, and their relative affluence gives them a measure of control over life's ups and downs. The relationship between health and wealth, however, can be complicated.

Wealth-Health Relationship Dynamics

One twist in the wealth-health relationship is age. Before the age of 50, our economic status affects our health. Wealth allows us to invest in healthier food, gym memberships, vacations and supplementary health care, all of which contribute to our well-being.

After 50, the relationship can do a 180: our health can start to affect our wealth. Chronic issues, like diabetes, heart disease and arthritis, can deplete savings at a significantly higher rate than those who aren't affected by them due in part to drug costs and lost wages. Health issues can also have a bigger economic impact when they occur later in life. Not only can it be harder to bounce back physically from an illness when we're older, it can also be harder to get back on our feet financially.

Health Capital vs Financial Capital

The good news is that some health issues can be prevented , or at least kept in check, through better diet and lifestyle habits. So why is it that some of us are less diligent about building our health capital than growing our financial capital? Both seem equally important.

Assessing and building up health capital is similar to following a plan for wealth management. Our Six Steps to Investing model is a good example:

1. Define Your Goals - To stay inspired and motivated when it comes to both money and health, identify your goals and timelines. Like with investing plans, your health plans can include short-, medium- and long-term goals. As our life circumstances change, so can our goals, so it's important to stay flexible.
2. Determine Your Profile - To be a successful investor, you need to know yourself. The recipe for this is simple: take your goals, add in your risk tolerance and time horizon, and mix well. Investing in your health is no different. Figuring out what fitness routine will work best for you gives you a greater chance of success.
3. Understand Your Choices - Just as investors must choose what investments and accounts are best for reaching their goals, there are a whole range of health options, including dietary and exercise considerations.
4. Design Your Portfolio - Now that you've figured out who you are and what you want to do, it's time to bring it all together. Research, media reports and online tools can all help when it comes to both wealth and health.
5. Put Your Plan in Action - Be bold. You've set your goals, done your research, and now it's time to dive in. Some investors like to do a trial run with an online practice account. You can do the same with your health goal. If your plan is to complete a full marathon, a mini-marathon may be a good first step.
6. Monitor - To know how your investments are performing, you've got to keep an eye on your portfolio. You also want to ensure you've still got the right asset mix that works for you. It's the same with your health: a regular checkup can help keep those goalposts in sight.

According to the World Health Organization, the definition of health is not the absence of illness but the “state of physical, mental and social well-being."

We can see evidence of that thinking in the investing world, too. As Warren Buffett said: "Investing is laying out money now to get more money back in the future."

Unlike money, the lack of which we tend to notice right away, we can take our health capital for granted. With such a close correlation, it may be time to think of health as an important pillar of our total wealth. So, raise that spinach smoothie and let's toast—here's to your health, and your wealth in 2017!