Financial Fitness


Many people think of the December holiday season as a time for family, loved ones, celebration, and good food and drink. Especially this time of year, discipline seems to take a back seat to enjoyment, much to the chagrin of fitness experts and medical professionals. If you have spent some time in your life seeking to regain physical fitness, you recognize that achieving fitness requires disciple. Further, you recognize that a period of laxity in discipline (as can be the case during the holidays) can lead to setbacks in your fitness journey. It turns out that achieving financial fitness has a lot in common with achieving physical fitness. Both require discipline; and deviations from plan can be costly. Let us explain.

It turns out, achieving physical fitness is analogous to achieving financial fitness. Experts will tell you that fitness is more about what you eat than it is about your physical fitness regimen. For example, you could be doing rigorous cardio daily, and lifting weights three or more days a week. Yet, if you don’t watch your caloric intake, you can make very little fitness progress. We believe that working out is analogous to investing. What you get from investing in the securities markets is like what you get out of the gym. It is an important ingredient in your overall plan, but it will not get you where you want if you don’t combine it with other good practices. How much of your income you spend and how much you save will affect your financial wellness as much or more than how your investments perform. To continue the analogy, what you save and or spend is akin to what you eat. If you overspend or overeat, you will become unfit.

A pound of fat is equivalent to 3,500 calories.  Suppose you eat 5,000 calories per day and your daily resting caloric burn rate is 3,000 calories. If you don’t burn those excess calories at the gym, you will get fatter. Even if you burn 1,000 of the extra 2,000 calories at the gym, those 1,000 extra calories per day is two pounds of fat per week! Similarly, if you are retired and spending 10% of your portfolio’s value per year while your portfolio is earning only 6%, you will spend your portfolio down to zero. This is the financial equivalent of a deadly heart attack or stroke. So, let’s turn our attention to financial fitness, which requires thoughtful planning.

Many people are under the impression that financial well-being is about the performance of their investments. But investment performance is only half the equation. What you save and spend are critical too. This is why seeking the counsel of a financial planner to help you set savings and spending goals in addition to establishing your investment portfolio is so important. It will keep you from spending your portfolio down to zero in retirement. Please contact us if you’d like to have a conversation about your financial well-being.



The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. The S&P 500 index is regarded as one of the best gauges of prominent American equities’ performance, and by extension, that of the stock market overall.

The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market. The composition of the NASDAQ Composite is heavily weighted towards information technology companies.

The NASDAQ-100, whose components are a subset of the NASDAQ Composite’s, accounts for over 90% of the NASDAQ Composite’s movement, and there are many ETFs tracking its performance.

The Russell 2000 tracks the roughly 2000 securities that are considered to be US small cap companies. The Russell 2000 serves as an important benchmark when investors want to track their small cap performances versus other sized companies. The Russell 2000 tends to have a larger standard deviation in comparison to the S&P 500.

The Dow Jones Industrial Average, or simply the Dow, is a stock market index that indicates the value of 30 large, publicly owned companies based in the United States, and how they have traded in the stock market during various periods of time. These 30 companies are also included in the S&P 500 Index. The value of the Dow is not a weighted arithmetic mean and does not represent its component companies’ market capitalization, but rather the sum of the price of one share of stock for each component company. The sum is corrected by a factor which changes whenever one of the component stocks has a stock split or stock dividend, so as to generate a consistent value for the index.

The Bloomberg US Aggregate Bond Index (^BBUSATR) is used as a benchmark for investment grade bonds within the United States. This index is important as a benchmark for someone wanting to track their fixed income asset allocation.

Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment.

Advisory services offered through WealthPlan Group, a DBA for WealthPlan Investment Management, a subsidiary Registered Investment Advisor of WealthPlan Group, LLC.  WealthPlan Group, LLC is not a registered investment advisor, but is the holding company for WealthPlan Partners LLC and WealthPlan Investment Management, LLC.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which Investment(s) may be appropriate for you, consult your financial advisor prior to investing. Information is based on sources believed to be reliable, however, their accuracy or completeness cannot be guaranteed.

No investment strategy can assure success or completely protect against loss, given the volatility of all securities markets. Statements of forecast and trends are for informational purposes and are not guaranteed to occur in the future. All performance referenced is historical and is no guarantee of future results. Securities investing involves risk, including loss of principal. An investor cannot invest directly in an index.

The information in this communication applies solely to the intended audience and in no way amends, revokes, or otherwise alters the existing agreements and relationships between WPIM and its clients.  This communication is not a binding offer, expressed or implied.  WPIM undertakes no obligation to update or revise the information herein or in any referenced third-party resource due to new information, future events or circumstances, or otherwise.

WealthPlan Investment Management (“WPIM”) uses data compiled and/or prepared by third parties (“Third Party Data”) in the delivery of Licensed Research and Data. Third Party Data is not owned by WPIM and user may be required to obtain permission directly from third parties for further use of Third-Party Data and may be required to pay a fee depending on the use contemplated by the user.