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The Real Connection Between Health & Wealth

The Real Connection Between Health & Wealth

Are you a runner? Into yoga? Soul Cycle, right?

We women today are healthier than we have ever been. We know what to eat and what to avoid…and we mostly manage to do it. (Thank goodness dark chocolate, red wine and coffee are now viewed as somewhat “healthy.”)

And it goes beyond nutrition and fitness: a healthy lifestyle is, for many of us, an important part of our self-image. This is particularly true among younger women.

So we’re taking actions to help us live longer, and at the same time, advances in medicine are also helping us extend our lives. You are less likely now to die of cancer than your parents and grandparents were, for example.

As a result, girls born in 2011 are expected to live to the age of 81. That’s a full 10 years more than our mothers’ generation.

But here’s an important thought: if you’re taking action to live a longer life, but you’re not getting yourself financially prepared for a longer life, you’re only getting half the job done. After all, do you see yourself as one of those cool grandmas scooting around town on a Vespa or, well…not?

This means investing.

I know, I can hear you: Isn’t investing risky?

Well, I would argue that it’s riskier not to invest. If you’re working hard and start saving 20% of your salary at the age of 30—and you keep that money in cash— Ellevest estimates that you have only a 3% chance of maintaining your lifestyle in retirement. And if you save 10% of your salary, it’s just not going to happen for you.

If, instead, you invest that same 20% of your annual salary into a diversified investment portfolio, we estimate that you have a very high probability of retiring well.* There will certainly be market ups and downs along the way, but your longer lifespan would likely work for you, not against you. That’s because you’ll benefit from the positive impact of compounding 27% more often than those who did not contribute to a retirement plan.

A survey by TD Bank reported that simply having a financial plan in place made 80% of respondents feel satisfied with their overall health and well-being. The same survey concluded that financial satisfaction increases among those who are satisfied with their physical health, and vice versa.

It’s as if financial and physical health do their own sort of compounding — when one gets better, so does the other—so why not maximize both?

*How did we calculate these numbers?

This article previously appeared on Ellevest.


Sallie Krawcheck is the Co-Founder and CEO of Ellevest, and the Chair of Ellevate Network, the global professional women’s network. Her life’s mission is to empower women to reach their financial and professional goals.

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