December 21st, 2020 by
PK

In the past, we discussed what your level of attractiveness means for your salary and whether benefits for the unattractive made sense. Since we know salaries are affected by your weight, what is the relationship between weight and net worth?

There is no doubt that Americans have gotten heavier and taller over time. That study is a bit aged but note the massive change... in 1960, the average weight for men aged 20-74 was 166.3 lbs. Today?  191.

Women, likewise, have gone from 140.2 to 164.3 lbs. on average. Both genders have also increased their average height by over an inch. Interesting, sure - but even more interesting is the question "how does your weight affect your net worth?".  Luckily, we've got just the study for you.

Most studies on the matter are broken down to net worth and BMI with net worth, of course, being a measure of assets minus debts. BMI is a flawed statistic which measures a person's height versus weight.

However, except for people with an above average musculature, we can use it as a proxy for actual fitness levels.  ("Luckily" for us, the increased number of sedentary careers also means most people have musculature within a narrow range - slim to none).

In this particular study, here is how the BMI ranges break down (see the US BMI distribution here):

weight < 18.5                       Underweight
18.5 < weight < 25              Normal
25.0 < weight < 30.0         Overweight
30 < weight                          Obese

And how do you calculate your BMI?

(Weight in Kilograms)
________________    =   BMI
(Height in meters)^2

78 kg (~ 172 lb)
____________         =    24.67 BMI (again, it's why I like body fat percentages instead)
1.778^2 (5'10")

## So, Does Your BMI Matter?

Surprise, surprise - it does - and unhealthy BMIs are a detractor.

This study, being a long term longitudinal study even breaks down maximum net worth by demographics.

The largest effect was seen in white females, where the ideal spot was around a BMI of 18 - under 110 lbs for a 5'4" female.  For males, 24 BMI was the top net worth zone - 167 lbs for a 5'10" male.

The effect was negligible for black males - although there does appear to be a sweet spot between 26 and 34 BMI (Roughly 181 - 236 lbs. for a 5'10" man).

The effect on black females was muted, but the highest net worth averages were seen between 24 and 28 BMI - roughly 140 - 163 lbs for a 5'4" female.

## Does weight or net worth lead the other?

Now, correlation, in itself, doesn't prove causation. However, in this particular instance, the number of studies linked in the beginning of the paper suggest a causation.

But, you need to ask - what direction is the causation? Does a low net worth cause people to be overweight or obese? Does being overweight or obese affect net worth?

Don't be tempted to say that low net worth causes obesity. That isn't necessarily the case.

First, obesity has increased in the face of increasing wealth and productivity and a corresponding drop in poverty since the sixties.

Second, the study checked both directions using inheritances and concluded "The regression’s inheritance coefficient was statistically and quantitatively zero in all cases, indicating positive wealth shocks have no impact on body mass."

So - BMI causes changes in net worth, not the opposite (at least to some degree).

## Weight and Net Worth: Improving BMI and Wealth

The reason for the negative association? I couldn't tell you, exactly... but if I had to bet I'd guess that something which leads to excess weight also leads to poor spending and saving practices.

That's an optimistic take - if it's true, you can improve your BMI and spending habits at the same time.

The study does bear that out too - one BMI unit change from a BMI of 22.5 to 23.5 averages out to a $1,306 (8% in the study) reduction of wealth. Of course, that is affected mainly by white females - black females and white males saw numbers in the$500s, while black males didn't have a clear relationship.

If responsibility does have a link with it, beating the long run average should have positive effects on net worth. According to the study, "roughly every four years the typical person gains both one BMI and US $10,000–17,000 in wealth." And yes, large changes (as opposed to smaller differences) made a huge difference in net worth. One example? "[W]hen a boomer decreased from the middle of the overweight category (BMI 27.5) to the middle of the normal category (BMI 21.7), a fall of 5.8 points, the regression indicates their wealth changed by more than four thousand dollars (US$4085)."

So there you have it - if you're overweight or obese, aim for big losses.  Your wallet will thank you and my co-writer won't try to tax you.

Have you ever gained or lost more than 10 pounds? Did you notice any effect on your career - positive or negative? Does the study loosely track your expectations?

### PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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