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WHIS Ratio

The WHIS (Wealth, Health, and Income Stability) Ratio is a financial metric used to assess an individual’s or household’s financial well-being by examining the balance between wealth, health expenses, and income stability. This ratio considers the relationship between a person’s net worth, healthcare costs, and income sources, providing insight into their ability to manage long-term financial stability, particularly in the context of rising healthcare costs and income fluctuations.

Example

A retiree with significant wealth and stable income from investments but high healthcare expenses might have a balanced WHIS ratio, indicating they are managing their resources effectively despite health costs.

Key points

• Measures financial well-being by assessing wealth, health expenses, and income stability.

• Used to understand the impact of healthcare costs and income fluctuations on financial stability.

• Particularly useful for individuals planning for retirement or managing long-term financial goals.

Quick Answers to Curious Questions

It helps individuals assess how well they can manage healthcare costs and maintain financial stability over time, particularly in retirement.

Rising healthcare costs can negatively affect the WHIS ratio by increasing expenses relative to wealth and income, making it harder to maintain financial stability.

Building wealth, managing healthcare expenses, and diversifying income sources can help improve the WHIS ratio and ensure long-term financial health.