3 Ways to Get Wealthier (and Healthier)

A recent study shows Americans are getting healthier. How could they get wealthier, too?

Jan 19, 2014 at 2:45PM

Great news: We're eating less bad stuff! The results of a recent study by the U.S. Department of Agriculture found that Americans say they're consuming fewer calories and cutting back on fast food, cholesterol, and fat. Furthermore, working-age adults consumed 118 fewer calories a day in the 2009-10 period than in the 2005-06 period, with more Americans eating home-cooked food as opposed to eating out in restaurants.

Of course, the credit crunch may be partly behind the study's findings, with more Americans turning to cheaper, home-cooked alternatives to restaurant food. Moreover, the study and the possible effects of the credit crunch on calorie intake got me thinking: Would a similar study indicate that Americans are investing better as a result of the credit crunch? Are they researching the companies they invest in to a greater degree? Or are the dark days of 2009 now forgotten in the American psyche, after years of Federal Reserve asset purchases have inflated asset prices to wonderfully high levels?

Eating less fat, salt, and sugar and instead eating more fruit and vegetables are simple things that all Americans can do to become healthier. However, if Americans were to try to "invest better," which three things could they do -- or not do -- to achieve that aim?

Here are three things I think we all could do to invest better -- and don't forget to let me know your ideas in the comments box below.

1. Focus on debt levels
With the Fed announcing the beginning of tapering of its monthly asset-repurchase program, it appears as though we are on the road, albeit a long one, to rising interest rates. Although it may take some time for them to go up, interest rates should be on the radar for all Foolish investors, with highly indebted companies having the potential to suffer the most from such increases. Sticking to companies with low to moderate financial gearing could be one solution.

2. Pay attention to relative valuations
The wider stock market was significantly re-rated upward in 2013, so stocks that still trade at a discount to their sector and to the market (for example, having a lower price-to-earnings ratio) have the potential to be re-rated upward so as to put them in line with the wider market. Although quality usually costs more, it may not cost as much as you think and could provide relative outperformance in future years.

3. Keep an eye on growth
In the aftermath of the credit crunch, the focus was on high-yielding, defensive stocks. This was understandable, since interest rates and bond yields were at record lows, so many investors needed an income, and companies with generous yields were the obvious solution. However, the focus has shifted to growth, and companies that offer above-average profit growth are in demand. While a growing economy should be good for all companies -- a rising tide lifts all boats, after all -- higher-growth, cyclical companies should benefit the most. Companies that can't offer high-single-digit earnings-per-share growth per annum may prove to be unpopular.

Of course, this it not an exhaustive list, and suffice it to say that Fools should look at more aspects to a company before they decide whether to invest. However, by focusing on at least these three areas in the coming years, Americans could be wealthier as well as healthier.

What would you suggest to help Americans invest better?

3 stocks to own forever
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers