Many of us are accustomed to seeing our doctor for our annual physical. We have blood drawn then our labs run for insights into some of our biggest health indicators: cholesterol and insulin levels. If we are fortunate, our results will fall into the optimal or normal range. If any of our indicators, such as blood sugar or LDLs, are high, we will be made aware of this too. With this information, our physician can then prescribe an appropriate course of action to help improve these variables. Perhaps a slight modification to our diet or exercise regimen is all we need. In some instances, our genetics are to blame and a prescription drug is required to modify our results. Regardless of the outcome, the knowledge we as the patient and the provider received from the physical allowed us to be proactive in addressing key underlying indicators that can contribute to the prevention of longer-term chronic illnesses.
As a Fiduciary motivated to inspire clients to achieve optimal financial health, the annual ‘physical’ can and should be applied to the financial planning realm to prevent the manifestation of unwanted financial outcomes. To allow your financial professional to conduct a more comprehensive financial physical, you may consider providing the following ‘lab’ results: the previous year’s tax return, a snapshot of spending and saving patterns over the past several months (i.e. financial statements), a copy of any recently purchased insurance and investment policies, as well as an overview of current employer benefits (if applicable). While this information will likely allow your professional to complete a more thorough diagnostic, I would not let the gathering of information be the reason you do not complete your annual financial physical. Even a simple open dialogue about developing financial concerns and opportunities could allow you and your advisor to be proactive in your future planning and help avoid the onset of a chronic financial illness.
We will spend more time defining these chronic financial illnesses in a future blog (spoiler alert: overspending is one!); however, these chronic conditions rhyme with those in the medical world in that they originate with a seemingly innocuous behavior that when compounded over time can lead to irreversible damage. The financial equivalent to kidney and cardiovascular disease could be the inability to pay for your children’s college or to maintain your desired lifestyle in retirement. Luckily for us all, these financial outcomes can be preventable and this prevention can start with scheduling your annual financial physical.