The Investment Scientist

What is Financial Wellness?

Posted on: March 22, 2012

[By Tom Warburton] Our view for a working definition for Financial Wellness has been forged as a result of discussions with hundreds of folks. We start our discussions with this question:

  • What Is Important To You About Money?

This leads to a variety of responses, and, frankly, there appears to be a strong correlation between age (or maturity or wisdom or whatever) and the answers our question solicits.

  • Youngsters Often Say Things Like:
    • I Like Money So I Can Buy Stuff
  • Older Folks Often Say Things Like:
    • I Don’t Want To Outlive My Money
    • I Want To Take Care Of My Family
    • I Like To Give It Away
    • Money Gives Me Freedom
    • Money Lets Me Live The Way I Want To Live
    • Money Represents Security…However Illusory

So – when it comes to defining Financial Wellness, permit us to synthesize the responses of folks as the following:

  • Financial Wellness Exists When A Family Or Person Can ‘Live Worry Free The Way They Want To Live For As Long As They Live

Let’s think about that for a minute.  We live for an indeterminable period of time, so, throughout that life period – be it 5 more years or 50 more years – Financial Wellness implies a reality where:

  • At Some Point In Your Life Work Is Optional
  • You Are Free From Financial Worries
  • Living The Way You Want To Live Is Practical
  • You Won’t Outlive Your Money

FANTASTIC.  Work Is Optional!  No Financial Worries! Your Lifestyle Is Sustainable!  It Doesn’t Matter How Long You Live!

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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.


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