Time for a Fiscal Physical?

No matter why I go see my doctor, he always does a few things first.

Whether I’m complaining of cold or flu symptoms, or getting an annual physical, he first listens to my heartbeat, assesses my breathing (with an extra cold stethoscope), and looks down my throat, up my nose, through my ears, and into my eyes. 

He takes my temperature, weighs me, and gets a sample of whatever bodily fluids he can coax out of me. 

Why does he do all that? He wants to get an overall sense of my health (or unhealth) so he can make a correct diagnosis. He’s trying to head off any serious problems before they have a chance to develop.

Only after that initial, comprehensive inspection, does he zero in on my specific complaint.

Guess what? You and I need that kind of regular check-up in our financial lives. I call it a fiscal physical. And I believe it needs to consist of these components:

  • Personal development plan. What is your plan to continue increasing your value to the marketplace? This is one of the most overlooked pieces of a financial plan, yet it is of primary importance. You never want to stop growing.
  • Income-to-spending ratio. Most of us need an income-to-spending ratio of 100/80/20. The 100% figure represents your income. Of that, you want to spend no more than 80% and save the other 20%. 
  • Monthly savings rate. This is an echo of the above point—most of us need to be saving 20% of our annual income. If everyone did this from the first day of their first job, we’d be a nation marked by unparalleled financial health!
  • Months of income in savings. In order to avoid bad debt (the kind where you end up paying someone 18% interest), we need emergency savings we can tap. A good plan is to accumulate six months of income in an accessible savings account. Anytime you spend money out of that account, replenish it ASAP.
  • Debt strategy. Debt is neither good nor bad. It simply magnifies your financial decisions, for better or for worse. Debt can allow you to live the lifestyle you want to live sooner (e.g., buying a house). It can also cost you later, keeping you from the lifestyle you might have had if only you had saved more money over the years. An intelligent debt strategy can save you much regret.
  • Protection strategy. Protection decisions should be made with the mindset, “Could this risk (e.g., the risk of death or disability) ruin me, or could I afford it?” If the risk might be devastating, you need to ask, “If I were able buy insurance the day after the disaster occurred, how much would I want to buy?” 

A good rule: Only insure for risks you wouldn’t be able to pay for.

  • Retirement strategy. One day, by design, desire or destiny, you’re going to retire. Do you want to spend that “next chapter” mostly fretting about money? Or would you like to enjoy your retirement years? 

Satisfying retirements need a strategy—not only smart investing, but also efficient income generation. Why settle for a big “nest egg” that produces only modest income? Instead, why not position yourself to increase the amount of income you can get from your retirement assets?

Couldn’t I just take my medical questions to the Internet? Of course. But if I want a thorough and personal checkup, I go see my real doctor.

To get an accurate read on your financial health, you need to make an appointment with a trusted financial professional. Get a “fiscal physical” and you’ll have a clear, workable plan for better financial health.

Want an easy first step? Do what lots of others have done. Email me at bmoore@argentadvisors.com, and I’ll send you my FREE comprehensive checklist of pre-retirement questions for people who are 60-something. There’s no obligation.

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

Scroll to Top
Speak with an Advisor