AS we work hard to earn money to live on, to support our lifestyle today, and to build a retirement nest egg for tomorrow, two key words we should be aware of are "surplus" and "deficit".
We generate financial surpluses, specifically, cash flow surpluses, by earning lots and spending little — relatively speaking. Conversely, we create financial deficits by earning less and spending more.
Of course, if we move away from the fascinating field of economics and the subject of money to look at the more important areas of obesity and its effect on health, it is easy to understand that caloric surpluses built up by eating too much food and exercising too little can lead to weight gain, while caloric deficits generated by eating less and moving more promotes weight loss, which can be a good thing — up to a point.
The key difference, though, between surplus-building in those two areas of life — wealth creation and body weight management — is that when it comes to fiscal or budgetary matters, there is no practical limit on the upside. The more the better.
Something to Ponder
Think about it: As we squirrel away monthly cash flow surpluses in our bank accounts or our savings and investment portfolios (SIPs), and as those gradually grow in size, heft, and depth over time, our financial strength and vigour and flexibility grow, too, with no upside cap.
The more wealth we have, the more good we can, hopefully, do with it. However, take a moment to think about this:
The more weight we put on, regardless of our frame, the more dangerous things can get for us through the onset of the so-called metabolic syndrome, which, according to the famous Mayo Clinic, headquartered in Rochester, Minnesota, United States, is: "... a cluster of conditions that occur together, increasing (the) risk of heart disease, stroke and type 2 diabetes. These conditions include increased blood pressure, high blood sugar, excess body fat around the waist, and abnormal cholesterol or triglyceride levels."
Rather depressingly, a decade ago Malaysia was ranked the most obese country in Asia (source:
www.bbc.com/news/av/world-asia-28030712). Also, based on 2021 research, Malaysia has the highest incidence of diabetes in Asean.
It is reasonable to assume that for most people worldwide, the safe upper range of body weight is roughly 63 to 130kg, for the majority of adults who stand at between 1.4 to 2.1 metres in height.
Key takeaway: There's no such thing as too much money (unless it engenders laziness, profligacy, and crippling parasitic entitlement mentalities among the occasionally inept children of savvy, hardworking genuine capitalists who accumulate mountains of wealth in the first place).
For those of us who are well-off but not insanely rich, such intergenerational wealth transfer woes remain hypothetical challenges we can only imagine.
Deficit-Building
Intriguingly, when it comes to deficit-building in those same two areas, fiscal and physical, the way that's achieved is by spending (or expending) more than is earned (or eaten).
Permitting low caloric deficits over time is the best way for most of us to lose the weight we hope to shed. You know as well as I do that calorie-intake restrictions in tandem with regular bouts of exercise are the wisest ways to lose weight.
And doing so, within reason, is good for the vast majority of those (of us) who work in sedentary environments and who thus battle being overweight far more than being underweight.
Financially, living with long periods of steady cash flow deficits causes two bad things to happen:
1. Asset erosion; and
2. Liability accretion.
In simpler terms, if our expenses consistently exceed our income, we will see our stock of assets diminish as we sell off our stuff to pay for our excesses; we'll also see our initial small molehill of aggregated debt grow to Himalayan proportions as we borrow more and more (and more) to fund a lifestyle that's been pegged at a level too high for our lifetime capacity to earn money.
Lifestyle Adjustments
So, when we look at our finances, it's vital to realise that, in general, cash flow surpluses are good and cash flow deficits are bad.
But when it comes to our bodies and surpluses and deficits, the reverse is actually true, at least for the many of us who weigh more than our doctors would like us to. Meaning, from a physical perspective, caloric deficits are good (within non-anorexic limits) and caloric surpluses are bad for most adults.
I've had to write in extreme generalities because the many readers of my Money Thoughts column come in all shapes, sizes, ages, weights, and physical conditions. So, I do hope you'll reread this piece and take time to figure out which specific parameters apply to you.
As you do so, you should be able to figure out how to make lifestyle adjustments that will help you increase your regular cash flow surpluses even as you set caloric intake and output targets to eventually reach a weight target that will please both your regular doctor and, more importantly, you. - © 2024 Rajen Devadason
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