Advice iq medical and financial health

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How medical decisions and financial decisions are similar.

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Advice iq medical and financial health

  1. 1. Medical and Financial Health Submitted by Larry Frank Sr. on Tue, 07/30/2013 - 3:00pm Ever hear the phrase, “your financial health”? A good way to appreciate planning your financial future is to see it as akin to maintaining your physical health. The parallels are instructive. As I read doctors Jerome Groopman and Pamela Hartzband’s excellent book, Your Medical Mind, I found the similarities between physical and financial health striking. The authors make the (to some) surprising statement that medicine is actually not an exact science. Financial planning is likewise inexact, even though answers often come from formulas. But these formulas use assumptions that change all the time. “Uncertainty pervades much of medical decision-making,” the authors write. “And in situations where one cannot predict the outcome exactly, how the decision is made can be as important as what decision is made.” Investment is completely fraught with uncertainty. No matter what you read, no asset is totally safe, not even cash or U.S. Treasuries. This is why every investment product on the planet comes with the disclaimer that past performance is no guarantee of future returns. None of the financial cognoscenti can actually foretell the state of the markets. In medicine, you can’t predict health or illness, nor can you determine your lifespan. There is a parallel between the probability of the person (longevity uncertainty) and the probability of the portfolio (market and economic uncertainty). It takes considerable finesse and prudent saving for a lifetime to make sure that the portfolio lasts at least as long as the person. Understanding those two probabilities– and their risks and benefits – are equally important in your financial decision-making. In both spheres, all that you can do is plan, prepare and hope for the best.
  2. 2. You need to be as informed as possible to make good choices. Your chances of success are much better when you have an experienced and well-trained professional in your corner to make the right diagnosis and recommendation. Physicians, like advisors, give face-to-face advice, but of course, no professional service is perfect. “As physicians, we’ve both found ourselves at times too quickly telling our patients which treatments we prefer, rather than working with them to understand their own thinking,” they write. “Of course, patients want, and often ask, what their physicians think is best. But that should occur after information is presented in a neutral way.” A good advisor should spell everything out for you in ways that you understand. After all, it is your future that you are working on. If your doctor or advisor shoos you out without explaining problems and solutions, you can find a better one. Decision-making in both areas changes with circumstances and works best with consistent, objective planning. Just as your health changes over time, markets and economies change even faster. Your Medical Mind also discusses believers and doubters, maximalists and minimalists and the range of attitudes in medicine. Just as you need a doctor who you can work with and whose beliefs match yours, you have to understand yourself and your financial advisor. Is it a good match? The health of your financial future depends on it. Follow AdviceIQ on Twitter at @adviceiq. Larry R. Frank Sr., CFP, is a Registered Investment Adviser (California) in Roseville, Calif. He is the author of the book, Wealth Odyssey. He has an MBA with a finance concentration and B.S. cum laude in physics with which he views the world of money dynamically. He has peer-reviewed research published in the Journal of FinancialPlanning. www.blog.BetterFinancialEducation.com. AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty. For instance, the rankings this week measure the number of clients whose income is between $250,000 and $500,000 with that advisor. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily. Topic: Creating Financial Plans Investing Bonds

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