HAVE you ever wondered what the secret is to living a life of deep financial calm? Keep reading.
I wrote the intro of this Sunday’s column on Monday May 22, almost a week before it is published in Vibes. That date is significant to me because my mother,
a close friend, a cousin and I all share May 22 as our birthday. And for me, this birthday is poignant: It is my first without my mother.
She passed away on Aug 12 last year. If she had lived, 22/5/17 would have been her 95th birthday. My long-time friend Dave Tan, whom I met in London when he was 17, turned 51 on 22/5/17, my cousin Kumar, who lives in Perth, turned 52 and I, 53.
From my pedestal of advancing years, allow me to make a confession: Over the decades I’ve lived (and the kilometres I have crawled, walked, ran, swum and flown), I’ve imbibed many lessons but retained few.
Here’s one I have had to learn and relearn over the decades: Human beings wisely appreciate flow more than storage.
Water: Flowing H2O is healthier and better for us than if it’s stagnant.
Air: All of us in Southeast Asia crave a clean atmosphere arising from favourable weather patterns, particularly during too frequent annual episodes of Indonesian haze these past two decades.
Money: Only those who have lost a job or shuttered a business know how much more we appreciate having a steady flow of passive income each month rather than relying on a large but diminishing bank balance.
A breeze is better than static air, flowing water is cleaner than some left too long in a container and having cash flowing into our lives — in quantities larger than we allow it to flow out — results in growing cash balances that calm us down emotionally and shore us up financially.
So, if you are gainfully employed, particularly if you are younger than this greying uncle and if you are open to some avuncular advice, then heed my warning: Do NOT spend all your money and do NOT spend more than you earn.
If you implement my advice, then — God willing — you will reach my age in better shape than I am today. While I am blessed from family, professional and social standpoints, and while many may look at the veneer of my public persona (by Googling my name)
and assume I have nothing to complain about, let me embarrass myself by reiterating some highly public knowledge: In the 1980s in the UK and later during
part of the 1990s in Malaysia, I ran up stressful piles of credit card debt by utilising enticing credit card limits to balance my income-expenditure pattern, which was marked by too little active cash inflow and too much cash outflow.
Thankfully, I ensured I never missed any minimum credit card payments and paid more when I could. I eventually zeroed every last troublesome credit card balance. But it was tough and painful; sometimes very tough and very painful.
ADVICE TO HEED
The interest I squandered on each card balance was a monumental waste of hard-earned money that I could have used to strengthen my finances at a much, much earlier age. But I couldn’t, so I didn’t.
Here are three hard-won advice:
1. If you have unpaid credit card balances today, focus on ripping off those financial leeches from your vault of potential future wealth. My article Intelligent Borrower or Economic Slave? contains useful guidelines to do so: www.freecoolarticles.com/FP2.htm.
2. If you aren’t now facing difficulty in paying credit card loans, congratulations! Continue using them... carefully, responsibly and wisely.
3. Then, to optimise your future finances to accelerate your wealth metrics past mine and those of most of your family and friends, build upon your healthy cash flow pattern today. You should do so by saving and investing your monthly cash flow surplus to generate passive cash inflows in the form of interest, dividends, distributions and rental collections.
In case you decide to toil your way through my advice, do so patiently. Don’t rush; cherish your journey. Your experiences will form a major portion of your autobiography or memoirs!
There is no rush because as you take steps to defeat your personal debts and
to build your future wealth, you will
benefit from reading and studying, thinking and acting upon lessons in financial planning, investing, business and economics.
Towards that end, you may use the free resources at my Gift Centre: www.freecoolarticles.com/giftcentre.htm.
You will also benefit from a visit to a mega bookstore with a well-stocked personal finance section and later, by seeking out a competent client-focused financial planner, unit trust adviser or personal banker to guide you on your path to financial freedom. Toward that end, may I recommend in all your personal reading and interacting with money professionals, stay focused on your key financial goal because no one will care more about your economic success than you!
Your key financial goal:
Raising your levels of (passive) future cash flow surpluses to minimise your future money woes and to maximise your joy as you walk down life’s road with your loved ones.
Rajen Devadason, CFP, is a Securities Commission-licensed financial planner, professional speaker and author.son and Twitter @RajenDevadason