Lots of folks these days implore you to be healthy. “Why should I invest the time and money”, you might ask. Usually answer is some form of question-begging like “because being healthy is good”, often from people trying to sell you something. Not very compelling. But I finally found one that resonated with me. Let me try to lay it out.
Let’s say your friend bought a new Lamborghini for $200,000. Here”s a gratuitous image of what it might look like.
Your friend brags that they rarely drive the car. They never change the oil or take it in for tune-ups. They refuel it with diesel sometimes, 87 octane other times, whatever’s cheap and convenient. When they do drive it, they always floor the accelerator when starting and jam on the brakes to stop. Sometimes there’s rain, so no need to wash or wax it.
If you’re a car person, you’re probably recoiling in horror. The profligacy, the gall, of treating a beautiful machine like a rustbucket!
A few years ago, it was a point of pride with me not to exercise or see the doctor. (“I’m just naturally healthy, I don’t need to waste time on that.”) Ate whatever crap was available and cheap. (“Healthy food, that’s just for weirdos.”) Sometimes worked for days straight with a few naps interspersed, drinking pots and pots of coffee. (“Still got it when I need it.”) I’m not the only person I’ve met like that, at least to some degree.
Humans are beautiful machines. The comparison is not subtle so I won’t draw it out.
You might argue that this is a silly example, there’s really no way to compare one’s personal maintenance to a car’s. And I would agree: you’re worth probably ten million dollars or more over your lifetime, 50 times the value of a Lamborghini. (And of course that’s just in terms of tangible assets, totally ignoring the extremely-important intangibles here.) Who gives a flip about car maintenance by comparison.
Or look at it from the perspective of efficiency. A former colleague used to say that, if a $1,000 tool makes you 1% more efficient, it’s worth buying because it pays for itself in your increased output (omitting details, just believe me that the math worked out for that scenario). Like me, your income is probably tied in some way to your output, directly or not. Assume that improving your health makes you 5% more productive. (You have more energy so get more work done per hour. Your head is clearer so you come up with better plans that save you time. Etc. Lots of changes could add to 5%. You might gain more than 5%, or less. Just a hypothetical.)
What could that productivity increase mean concretely, in the long run? Let’s start with this scenario
- your income is $50,000/yr
- you don’t currently have any money invested
- your income will currently increase by 5% a year from raises and so forth
- you will invest 30% of your income each year, getting 10% return on the investments
Let’s say that your 5% boost in productivity gives you more negotiating leverage, and you’re able to ratchet up to 7% income raises year over year. You might think, “A couple percent, some extra pocket money each year. That’s nice. Are we done?” The key is the compounding effect, as we’ll see. On the other hand though, healthier food, checkups, exercise etc. aren’t free. Let’s say those set you back $1,000 year. That’s a pretty substantial portion of your new “pocket money”.
Now, starting from the scenario above, the difference between a 5% yearly raise, and 7% but minus the $1,000 for yearly health expenses, adds up to
An extra $150,000 in 20 years1.
A lot of employers these days put up money for basic health costs like gym memberships. And health insurance policies increasingly offer primary care visits like checkups for free. And of course, if you’re eating healthier, you’re probably incidentally cutting down on vices like junk food and booze that have pretty substantial cost. If you have more energy, you’re probably drinking less coffee. One cup of coffee a day, and a bag of chips and 12-pack of beer a week, add up to $1000/yr. So if we start with the same comparison as above, except write off the added $1000 in health costs by related savings elsewhere, then the difference becomes
An extra $200,000 in 20 years1.
So in 20 years you could buy yourself the Lamborghini above with the difference, totally in the clear1.
I don’t claim a U. Chicago economist would come up with the same numbers. But I do think that these choices compound, whether they’re good or bad. Hate to come across as preachy but I wish someone had laid that out for me 6 or 8 years ago.
(I’m omitting minor details like emotional well-being, immune system strength, cardiovascular condition, muscle tone, physical appearance, medical bills later in life, life expectancy, etc.)
1 Ignoring inflation and taxes.