The Bank of Life

Living below our means and investing the difference is a proven strategy for financial success. Witnessing the transformative power of compounding interest, as demonstrated by Forbes, where saving $100/month turns into over half a million dollars in 40 years, makes it easier to reconsider our spending habits. But what if this concept could apply to more than just money?

Let’s extend the Live Below Your Means – Invest the Difference (LBM-ID) strategy to our physical well-being and explore its potential. Here, our “means” refers not to financial capacity but to our physical limits—our upper function and energy levels, along with our overall well-being. Just like with money, we can go into physical debt by pushing our bodies beyond their means, such as staying up late or tapping into unhealthy food. Similar to paying off credit card debt immediately, if we quickly address this debt, no interest accrues. However, prolonged disregard compounds interest, diminishing our future capacity and creating a detrimental cycle.

On the flip side, if our physical capacity (means) exceeds the demands placed on it (thanks to sufficient sleep, nutritious fueling, activity levels), we create a surplus to invest. Instead of stocks and bonds, physical investments could involve expanding our exercise routine, preparing healthy meals, or enhancing our sleep patterns. Just as financial investments compound interest and expand our means, physical investments yield similar benefits. Time spent on reasonable exercise expands our physical capacity, opening doors to more opportunities in various aspects of life.

Living below our means in the big four—finances, relationships, physical and cognitive growth—yields cross-cutting benefits. Boosted energy enhances earning potential, strengthens relationships, and sharpens cognitive abilities. The reciprocal nature of these benefits creates a positive feedback loop in any of these four arenas.

Life is hard. Even as I type these words, wanting desperately to provide some magical equation we can all follow that will guarantee us a better tomorrow, I fully realize there is no magical answer. However, we can significantly tilt the odds in our favor with each step along the way. If today feels hopeless, having a clear next step is often the key to moving forward. The LBM-ID strategy provides that clear next step. Pick one area, shift the “spending” pattern, and begin the (positive) compounding effect that follows. Whether in our finances, relationships, fitness or cognition, compounding interest in the bank of life might just be doggone close to magic after all.