• Lavina Nagar, CFP(R)

Wealth's Health

Updated: Mar 5





Spring is almost here. And there is a perceptible positivity in the air. To say 2020 was a challenging year would be a gross understatement. A health crisis morphed into an economic crisis. A poll in early 2020 from the National Endowment for Financial Education showed that almost nine in ten people were experiencing financial stress as a result of COVID-19. With things starting to turn around in 2021, now is a good time to look at the health of our wealth as well.


Managing wealth is very similar to managing health. Despite the advances in both the areas, neither is an exact science. They are a combination of art and science, along with a good dose of common sense. Each is very personal, and each remains exposed to impacts of unanticipated events.


When managing our health, we look at the food we eat, how physically active we are, our genetic makeup, and our lifestyle, among many other factors. When managing our wealth, we need to look at our wealth from a similar multi-dimensional perspective. Some of the factors we should consider are our goals and aspirations, investment returns, future inflation, and where/how our wealth needs to support us. Overall, the process of managing health and wealth is surprisingly very similar. In both the cases, we analyze, plan, and prepare an action strategy. And then we monitor the results of our strategy and calibrate/modify it based on new/changed information.


To continue on the theme of similarities between health and wealth management, an annual checkup of our wealth is a good place to start. This allows us to course correct in a timely manner if any of the underlying factor changes. At the least, an annual checkup should include:


· Review of current cash flow.

· Projection of future cash flow based on goals and objectives.

· Investments strategy to ensure it supports our goals and does not carry unnecessary risks.

· Rebalance of portfolio.

· Comprehensive view of cash flow and investments returns to ensure we are saving and investing appropriately to fund the goals.

· Review of insurances to make sure we are not carrying risks that can be filled through insurances.

· Review of estate plan. Laws and regulations change, and they impact our estate plans. It is good to ensure that none of our estate plans have been inadvertently impacted by changed laws or regulations.

· Implementation of strategies and opportunities for tax efficiencies.


I highly recommended that we actually write down our goals, our investment strategy, and how our investments will support funding our goals. This gives us a blueprint to follow, and also acts as a benchmark to monitor our progress. Come next year, this blueprint will provide us a repeatable process, and help analyze the results to see if we are on track to reach our goals. Calibrate this strategy annually to incorporate any changes in personal and economic/financial environment.


In both, health and wealth, prevention is better than cure! And an annual checkup is the first step!


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