Saturday, November 26, 2016

Increasing Wealth, Increasing Health

Uncle CW8888 came out with another interest post today: "To save more: Cut Expenses or Increase Earnings? To slim more: Cut diet or Increase exercise?".

For me, the answer came very fast and naturally: DO BOTH.

Of course, any idiot can tell you that. However, I think that there is a hierarchy of what is the easiest to do with the most impact by useful until a certain point, to what is hard to do with slower results, but without as much limitations.

There are definitely exceptions, but I think that this applies 95% of the time.

Taking health for example:

The easiest thing for anyone to do to improve their health is through their diet. Restrict the total amount of calorie intake. Reconfigure the calorie intake to be only from healthy sources. Ensure that the diet are within recommended limits for nutrients and vitamins.

Dieting alone has a natural limit. How much less can you eat if you are already surviving on the bare minimum?

Of course, if you have ALREADY done that, the next level which is hard and slower is to exercise more.

Exercise is able to increase your health to levels that just dieting alone will never be able to achieve. It is a slow and hard processes, but there is always some extra room of improvement to go, although there are diminishing returns.

A lot of people have this order mixed up. They eat all sorts of junk food and think that they can exercise their way to negate such effects. This is very common for people to go to the gym and exercises, but they have very loose control on their diets.

No medical professional in their right mind will tell you that you can continue an unhealthy diet as long as you get enough exercise.

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Now, let's relate this to wealth.

The easiest thing for anyone to do to increase their wealth is through reducing expenses. Limit the amount of monthly expense. Reconfigure expenses to go towards purchasing cheaper alternatives. Ensure that expenses are within recommended limits for each spending category.

Reducing expenses alone has a natural limit. How much less can you spend if you are already surviving on the bare minimum?

Of course, if you have ALREADY done that, the next level which is hard and slower is to increase your earnings.

Earning more income is able to increase your wealth to levels that just reducing expenses alone will never be able to achieve. It is a slow and hard processes, but there is always some extra room of improvement to go, although there are diminishing returns.

A lot of people have this order mixed up. They spend their money on silly things and think that they can increase their earnings to negate such effects. This is very common for people to be very career focused and dabble in side businesses, but they have very loose control on their spending.

No financial planner in their right mind will tell you that you can continue making horrible purchasing decisions as long as you earn enough money.

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TL;DR?

If you want to be healthier, focus on your diet FIRST, then exercise SECOND.
If you want to be wealthier, focus on your expenses FIRST, then earnings SECOND.

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