If you asked 100 people to identify their greatest source of wealth, you are likely to receive a range of answers. Those answers may vary based on age, earning potential, or personal circumstances. But one thing most answers have in common is that they involve quickly weighing current liquid and non-liquid assets and liabilities, and determining which has the greatest net impact on their financial bottom line.
Evaluating sources of wealth
What is your greatest source of wealth?
Many people would answer their homes. After all, for many, home and land ownership represents the most substantial investment of their lives. For many, in fact, home ownership is the physical embodiment of achieving the American dream. Instead of sinking countless dollars into rent, home owners build equity. In addition, real estate increases in value. As a source of wealth, a house is certainly a top contender. And it is a great one. But is it the greatest?
What about your stock portfolio or perhaps liquid assets? Could they be the greatest source of wealth?
Identifying the greatest source of wealth
Every source of wealth listed above is important, but the greatest is one that can’t be quantified. It comes with no quarterly statement of earnings or even an appraised value. You can’t deduct its value on your taxes, nor will you find it in a bank vault or a personal safe.
Your greatest source of wealth is your health. You read that properly. It’s your health.
Your health is the ultimate source of wealth not only in a metaphorical sense, though that is a crucial point. It is also true in a very real, and very valuable monetary sense.
Healthy people, for example, have the opportunity to earn more money over the course of their lifetimes. By taking fewer sick days, healthy hourly workers earn more than their less healthy peers in the short run. In the longer run, salaried employees who have taken fewer weeks off for surgeries or other health issues are the employees who will first be considered for promotions (and the accompanying higher salaries).
From an even longer-range perspective, healthy employees are able to retire at a later age, giving them much more earning power over the course of their lives. If a strong, healthy, 65-year-old woman chooses to work until she is 67, she has the opportunity to accumulate far more income than a colleague who has is forced to retire early at age 60 due to failing health.
For those with a pension, the financial outcome for the healthy is even more rosy. Depending on the policy of the company for whom they work, the fictional employee who had to retire early due to ill-health may get a double whammy. In some cases, the pension received grows for every additional year you work. Retiring early, therefore, means that not only are you short your regular pay, you’re also short a substantial portion of your potential pension earnings.
The difference in employment-based earnings is only one aspect of what makes health your greatest source of wealth. Not only does your health determine (in part), how much wealth you have coming in, but it also determines (in part) how much wealth you have going out.
The costs of health care are rising. There is no way to predict how the American health care system will be structured a decade from now, but one thing is sure. Insurance premiums, co-pays, medication, durable medical equipment, and other medical expenditures will constitute a hefty share of the budget of a person who is ill. For a person who is healthy, the budget drain is substantially less. That means more money in your pocket to invest elsewhere.
Health truly is your greatest source of wealth. Great health means more money coming in and less money going out. The reverse is true for poor health. That makes putting time and energy into maximizing and protecting your health, one of the smartest investments you’ll ever make. Great health has short and long-range payouts.
Embracing life to the full
Though the fiscal payouts are certainly impressive, the most impressive payout for great health is much less tangible. That payout is measured in not in dollars, but in enjoyment of life. Wealth means nothing if you’re too physically compromised to live it to the full. You can have all the wealth in the world, but if you don’t have the health to enjoy it, how does it benefit you? Having health and wealth allows you to enjoy life and travel to other countries like Israel and other countries.
Fiscally and physically, health is and will always be our greatest source of wealth.