Most financial advisors sound like broken records. “Save and diversify. Save and diversify…” They may throw in a stock tip or tax loophole, but for the most part, their advice is the same. It’s not surprising that college students have learned to tune them out. These advisors have gotten so caught up in the benefits of long-term investing that they forget college students are by-and-large broke. Many U.Va. students will enter well-paying careers after they graduate and will have plenty of time to save for retirement and other long-term financial goals once they have an income source. It doesn’t make much sense to save when you’ll have excess income in the future, but you can’t afford living well now.
That’s not to say students shouldn’t look to enhance their financial futures. But instead of investing cash they don’t have, they should focus on investing the two resources that are in abundance on college campuses: time and energy. I’m not a financial advisor, but I’d argue the best investment of time and energy is in your health. Although it doesn’t show on your tax return, your health is your most important asset, and it has a larger impact on your personal finances than you may think.
Indeed, Americans spend more on health care than any other nation in the world. About 16 percent of our GDP goes toward health care spending, and that figure is expected to increase over the next decade. In 2007, officials at the Centers for Medicare & Medicaid Services estimate, the U.S. spent $2.26 trillion on health care — that works out to about $7,500 per person. Chronic disease, including cardiovascular disease, diabetes, and cancer, accounts for 75 percent of the cost of health care, according to the National Center for Chronic Disease Prevention and Health Promotion. According to the Centers for Disease Control and Prevention, seven of every 10 Americans live with at least one chronic condition . These conditions shorten lives, reduce quality of life and create burdens for caregivers.
While the human costs are significant, the economic costs are large, as well. According to information published by Johns Hopkins University, the average per capita health care spending for an individual with a single chronic condition is more than 2.5 times greater than for someone with no chronic conditions. For an individual with three chronic conditions it is more than seven times greater and with five chronic conditions is it almost 15 times greater. Even more alarming, lost productivity because of missed work days and poor performance on the job may actually be more than the direct treatment costs of these conditions.
Although genetics plays a role, maintaining a healthy lifestyle is an important factor in reducing the risk of chronic disease. For college students, that means taking basic steps now. Eating healthy, exercising and quitting smoking can yield long-term dividends in the form of fewer health care expenses and greater productivity down the road. The costs of these changes are small compared to the benefits that come from a healthy lifestyle. In finance, we call this an investment with high return on investment.
The University offers an array of resources to help student make healthy lifestyle changes. For U.Va. students who smoke, free quit kits are available at Student Health and the Center for Alcohol & Substance Education. For students looking to start exercising, U.Va.’s fitness facilities feature a variety of cardiovascular and weight training equipment. Intramural-Recreational Sports also offers drop-in group exercise classes and personal training. For students looking to eat healthier, University Dining has launched several efforts to help students find healthy options in the dining halls. For example, it switched the deep frying oil used in dining halls to Mazola ZT, a zero-trans fat oil made from a combination of corn oil and sunflower oil. Intake of dietary trans fat has been linked to higher levels of LDL cholesterol and increased risk of heart disease . The O-Hill dining hall offers HealthyEats weekdays at lunch and dinner. This new meal concept features a meal that meets USDA dietary guidelines and limits total fat, saturated fat, and sodium. Each dining hall also offers a copy of the “Top 40 Healthy Dining Room Picks” brochure that lists healthy options for students. Those who have a dining plan and are interested in more information are even able to schedule a free consultation with the University’s nutritionist.
An investment in your health does not require up-front cash. But your wallet will thank you for the long-term gains.
Rahul Gorwara is a short fund manager in the McIntire Investment Institute. He can be reached at rkg5c@virginia.edu.
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