When friends and acquaintances ask dietitians for advice and tips, we like to say that this is similar to asking for advice on how to invest money. Investing in a person’s health and well-being is just as important as investing in their financial future. Surprisingly, the principles of good financial investment strategies are not so different from those of maintaining a proper diet and a healthy lifestyle.
Financial investments and diets start with plenty of good advice, but if you try to implement it, it becomes clear that there is a gap between the law and the practice. One can learn about one approach that has historically been successful, only to discover later that a completely opposite approach can also be beneficial, and may even be better for us.
Despite countless works and studies on both investment habits and diet, there are those who still do not agree on the best way to do it. There is always a new way to improve the financial situation and health.
The best investment plan, just like the best diet, is the one that works for us and the one that can be followed throughout life. When extreme approaches and shortcuts are taken, one often falls into the trap. It is easy to identify the many habits to adopt and the pitfalls to avoid if we want to be healthy or wealthy.
However, we often lie to ourselves to justify our choices and preferences, even when it doesn’t make sense. Especially in cases of overweight. Apparently, the basic goal in these two areas is opposite: in dealing with obesity, which is today one of the widespread epidemics in the Western world, we need to create a negative energy balance. That is, energy expenditure (calories) is higher than income. In the field of investments, the goal is the opposite: financial income is higher than expenses. But the paths to these goals are in many respects very similar.
Fascinating imagination
Let’s check what can be learned from the fascinating similarity between investing and dieting, identifying the similarity can help in making better decisions in both areas.
Diversification: in finance this is a well-known strategy for reducing risks and maximizing returns. By diversifying investments, the investment portfolio is less exposed to market fluctuations. Similarly, a healthy and balanced diet should include a variety of different food groups to ensure that the body receives all the necessary nutrients: carbohydrates, proteins, fats, vitamins and minerals.
Emotions and impulsiveness: We are all human, and we have buttons that can be easily pushed. The challenge should be in identifying the temptations and acting accordingly.
You can indulge occasionally. If we know that we will break the rules at some point, it is possible to create a specific context that will allow us to indulge without it being harmful in the long run.
For example, many people allow themselves to indulge in desserts at events or on vacation, but they will not make it a daily habit. Similarly, occasional day trading will not drop your investment portfolio, as long as it is an insignificant amount from the portfolio, not very frequently and away from your emergency and pension funds.
When it comes to food and money, many decisions are personal and emotional. If you are able to make rational choices most of the time and not fall into emotions, you are on the right path.
Long-term thinking: financial investment and a balanced diet require a long-term vision. A short-term investment may result in quick profits, but it also carries a higher risk of loss. Similarly, fad diets may provide immediate results, but they are not sustainable in the long term, may return the excess weight with compound interest, and worse – lead to harmful health consequences. To build a strong financial portfolio and maintain a healthy body, it is important to think about the long-term effects of the decisions and make choices that will benefit us for years to come.
Due diligence: Financial investments, like a healthy diet, require due diligence. When investing money, it is important to research, get to know and understand what exactly we are investing in. You should dig deeper and read what analysts say about the investment products. Sometimes it is also useful to delve into the companies’ balance sheets or reports. The same is true for nutrition: we must know the foods we consume, it is good to know how to read the labels on the packages in the supermarket and choose correctly, and consult with licensed nutritionists.
You can find plenty of advice on websites and social networks about optimizing our financial resources and similarly our diet. The problem is that it is impossible to be sure how reliable the sources are. The academy remains the best source of information, because in many other sources it is not known who is behind them, and what his interests are.
At the same time, it should be taken into account that foreign interests are everywhere. Giant corporations in the food sector finance research bodies to influence public opinion and promote the benefits of products they desire. The client’s interest is also not always at the forefront of the minds of investment advisors and financial managers, since they make a living from managing investments and not necessarily from the performance of their investments.
Customization: There is no one meal that fits everyone. There are recommendations and guidelines from health organizations for optimal nutrition. You will also find recommendations for a balanced investment portfolio between different financial products. But in the end, the recommendations – both in the field of nutrition and in investments – will differ from person to person and depend on personal factors, such as age, resources, goals, risk levels and more.
Beware of fashions and trends: it is important to use common sense. Anyone who wants to convince you that you can achieve extraordinary results without any effort is usually a charlatan, whether in the field of economics or in the field of nutrition.