The other day my brother sent me this diagram of body types. I’m probably a borderline Ecto/Mesomorph, while he is a definite endomorph. When I did P90x for the first time a few years ago, I gained some muscle and a lot of definition (which has since faded). When he did it, he gained some definition and a ton of muscle. While it’s not a perfect analogy, the principal of body types can be applied to the personal finance realm.
For most of my life, I purposely avoided running or going to the gym. I was active in high school sports and skateboarding, but I found exercising “just to exercise” to be very boring! When I was about 27, however, I decided that it was time. I was no longer as active with sports as I had been in the past, my metabolism was changing, and I was tired of being the weak (relatively) older brother.
I’m tall and lean. My younger brother is stocky and not quite as tall. Our youngest brother is basically the ideal blend (don’t let that go to your head Steven). I’d say we align pretty closely to the 3 basic body types. Can you tell which is which? (We bare more than just our budgets around here.)
There is obviously a large spectrum of body types, and you won’t fall exactly into one category, but your body type is determined largely by two factors:
- How easy it is for you to gain muscle
- How prone you are to putting on fat
Now, just for fun, let’s put on our finance hats and make the following associations:
- Propensity to gain muscle = Potential to generate income
- Propensity to gain fat = Tendency for spending and debt
The Financial Ectomorph
True ectomorphs are generally thin, have smaller frames, don’t gain fat easily, and typically can’t bulk up with much muscle. That’s not to say they can’t, it just takes more effort.
So what’s a financial ectomorph? Financial ectomorphs are very frugal and live within their means. The only issue is that they don’t have a lot a means because they don’t generate much income. They focus so much of their energy on “use it up, wear it out, make it do or do without” that they often forget the Income side of the wealth equation.
The Financial Mesomorph
Mesomorphs have athletic frames and are naturally strong. They gain fat and muscle with more ease than ectomorphs, but not to the extent of endomorphs.
Financial Mesomorphs do alright for themselves. They value being thrifty but also are willing to part with their money to create worthwhile memories or to indulge in an occasional luxury. They look for good deals on their purchases and at the same time work toward progressing in their careers and increasing their income.
The Financial Endomorph
Endomorphs really have to be careful because they gain weight easier than people with other body types. Their bodies are generally more soft and round. If they put in the effort though, they can gain a heck of a lot of muscle.
Financial Endomorphs live the high life. They make great money and aren’t afraid to spend it. They excel in their careers but are not accustomed to living within their means. If they want something, they buy it without much thought.
I’m obviously taking some liberties to define the financial equivalent of body types. I put together this chart (in Excel of course) to help visualize what I’m taking about.
Unicorn-morphs & Bad luck-morphs
But what about the other extremes? Is there such thing as someone who has a hard time putting on fat but no problem putting on muscle? This is not common, which is why there is not a defined body type category for it. We’ll just call this the unicorn-morph.
On the other hand, are there people who truly can only put on fat and not muscle (assuming they are living a relatively healthy lifestyle)? I hope not, because that would be incredibly unfortunate. We’ll just call this the bad luck-morph.
If Unicorn-morph and bad luck-morph body types exist, they are extremely rare. When we put on our finance hats, though, these are probably two of the most common financial body types out there.
The financial equivalent of a unicorn-morph is not a unicorn at all but rather the classic example of someone who simply lives below their means and creates wealth. The Millionaire Next Door, one of my all-time favorite books, describes this person as a Prodigious Accumulator of Wealth.
We are all too familiar with the financial equivalent of the bad-luck morph body types. These are people who live beyond their means, don’t maintain or advance their careers, and get deeper and deeper into debt.
I have always been interested in money. Only in the last 5 or 6 years have I been interested in fitness. I now find that I often think about the similarities and analogies between our physical and financial health. After having written this article a while back, I discovered that my friend Shannon has written a great book that dives deeper in to the correlation between financial and physical fitness. Check it out!
The Good News
While you can’t change your body type and are more or less stuck in a certain quadrant of the chart above, the good news is that you CAN change your financial body type.
You can gravitate toward any area that you want (or don’t want). The Unicorn section (when applied to finance) is not a fantasy! It equates to wealth, which you can attain through frugal and wealth generating habits. The bad luck area from a financial perspective is not so much bad luck as it is dumb choices.
Regardless of where we are on the financial body type spectrum, the goal is to gravitate toward wealth. Just because your parent’s had a “poor” mindset or spent money like crazy, your position on the financial body type chart is not set in stone. You are never stuck. You can move toward wealth by following the basics. Spend less than you earn by cutting your costs or by increasing your income, or both. And, of course, subscribe to my blog!
What’s your financial body type?
This post is sponsored by Wealth Within, which provides a range of innovative financial solutions to support client financial goals.