In a previous post, I talked about why it’s important to have a financial advisor who serves as a personal trainer for your financial fitness. Personally, when I needed the structure as well as the motivation to go to the gym, I hired a personal trainer for help, and in the process, saw how working with one related to the value a financial advisor can add to your financial life.
Not only does an advisor function in a similar role to a personal trainer—such as keeping you accountable and helping you work toward your goals—but fitness and personal finance also share a similar relationship. Personal finance is made up of multiple pieces, including investing, a bonus (whether it be monthly, quarterly, or annually), budgeting, and a financial advisor. Ideally, to achieve optimal results, you need a balance of all four.
The same can be said for fitness. A healthy body is the result of a balance of several fitness aspects, including weight training, cardio, a wholesome diet, and a trainer.
Let’s look in more detail at these four ways fitness and personal finance relate.
Investing as Weight Training
I like to think of investing as the equivalent of your weight training. Investing serves as an important element of your financial fitness and can go a long way in helping you pursue your goals.
However, like weight training, investing requires patience. You won’t see results overnight and you can potentially injure yourself (or your portfolio) if you make too many changes in a short-term period. For investing and weight training, a long-term and consistent strategy can best help you reach your desired results.
Your Bonus as Cardio
Like cardio, which provides a huge rush of endorphins, a bonus check from your employer makes you and your family happy. It also provides immediate results—money added to your savings account in a matter of minutes. Similarly, you can feel more immediate results with cardio. After running in the park or cycling, you’re exhausted, your body aches, and your heart is pounding. In the immediate term, you may drop the pounds much faster with cardio than with weight training.
But, it’s also a temporary fix because it’s a zero sum game. Running a couple times a year is like receiving a bonus check or a big tax refund check once or twice a year; you feel great at the moment, but it won’t help you work toward your goals if you don’t balance it with other strategies.
Your Budget as a Diet
Along with weight training and cardio, a healthy diet is necessary to reach your goals. Similarly, a budget can help you improve your financial fitness as you also invest and save those bonus checks. When it comes to your diet, you likely choose one that suits your body’s needs and relates to your goals, such as reducing your carb intake or cutting down on fried foods and increasing your veggie consumption.
Like a diet, you want to create a budget that matches your individual needs and goals. Just as you would create a balanced plate of veggies, proteins, and fats, your budget is made up of your essential costs, non-essential costs, and savings. How you allocate each segment is unique to your specific needs.
Your Financial Advisor as a Trainer
Lastly, it’s hard to see results from your strength training, cardio, and diet if you don’t have a trainer to help you stay on track, monitor your results, and keep you motivated and accountable. A trainer coordinates all of these elements to help make the whole greater than the sum of its parts.
For your personal finance, a financial advisor can help you evaluate and set realistic financial goals, create a plan to help you work toward them, and keep you on track. Think of an advisor as a financial decision coach—someone who can help you integrate your financial strategies and feel more confident in your financial decision-making.
Reviewing Your Financial Fitness
How financially fit are you? Have you integrated these four elements, or is there a piece missing or lacking? I like to serve as families’ financial coach and guide. One of the best things about working with an advisor is that you have the opportunity to determine the extent of the planning to match your level of comfort.
Whether you want to get started with a simple budget or are ready to dive deep into investing and retirement planning, the choice is yours. Whether you’re new to financial planning or a sophisticated investor, I’d like to meet with you to talk about your situation and goals. To learn more about how I can help, contact me at (949) 221-8105 x 2128, or email me at [email protected].
About Mike Loo
Mike Loo is an independent financial advisor with more than 20 years of experience in the financial services industry. His mission is to provide a meaningful impact on the lives of clients and the people they care most about, help them make educated decisions with their money, and build a strong financial foundation for both themselves and their next generation. Mike is committed to meeting a high standard of excellence, taking the time to listen to clients’ needs, and designing strategies that aim to help clients save money and reduce debt. He seeks to fit a client’s investments into their life and educate them so they’ll understand their investments. To learn more about how Mike may be able to help, connect with him on LinkedIn, call his office at (949) 221-8105 x 2128, or email him at [email protected].
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Trilogy Capital, a registered investment advisor. Trilogy Capital and Trilogy Financial are separate entities from LPL Financial.