IN most of life we should strike a happy balance between contentment and ambition; however, elevating our personal income levels requires targeted ambition.

Almost a hundred years ago, way back in 1920 — two years before my late mother and father were born — American entrepreneur and business theorist Roger W. Babson wrote a book with a fascinating title: Fundamentals of Prosperity. (I don’t yet have it in my library so I have just ordered a copy online using Book Depository, utilising some of my self-education budget. If you don’t have one of those, I suggest you set up such a budget by allocating 1 per cent to 3 per cent of your monthly income for personal education.)

Babson is best remembered for establishing Babson College in Wellesley, Massachusetts, and for his work on business forecasting methodology within the investment arena. Rather presciently Babson delivered a speech on Sept 5, 1929 in which he said:

“Sooner or later a crash is coming, and it may be terrific.” It turned out to be ‘sooner’. Later the same day the US stock market fell 3 per cent! That drop became known as the “Babson Break”.

Soon after that steep one-day fall, the Wall Street Crash of 1929 occurred and the devastating Great Depression ensued, stretching throughout most of the 1930s.

Today you and I are bombarded with an endless litany of doom and gloom tied to the growing proportion of global sovereign debt from the developed world that is negative yielding, the terrifying Saudi-Iranian posturing, and the damaging US-China trade spats.

Confession: I lack Babson’s capacity for correctly calling market tops. Still, for what it’s worth, in my opinion, it’s possible a short-lived global recession is just a year or two down the road for us from our volatile vantage point of late 2019.

I think a full-blown economic depression is unlikely though, because of the massive oversight, nervous scrutiny and careful tweaking by jumpy central bankers everywhere.

My optimistic view presupposes the Trump-initiated US-China trade war settles down enough to permit the rest of the world to get on with our lives and the business of, well, business!

In such an environment of lacklustre yet still positive GDP expansion, the common goal of regular people like you and me to get ahead in life is not impossible to achieve. But it isn’t easy, either, because it requires greater self-discipline and passionate focus than we may naturally muster.

The crux of wise fiscal behaviour is proactive control of our cash flow because that’s how we and our family can get ahead in life.


Malaysian society is often analysed on the basis of its B40, M40 and T20 income bands. From an economic perspective, as measured by monthly household income, those three bands pertain, respectively, to the bottom 40 per cent, the middle 40 per cent and the top 20 per cent of all Malaysian households.

Quite approximately — using my personal projections for 2019 based on official 2014 and 2016 data — I estimate that today the average B40 household has a monthly income of RM3,500, the average M40 household RM7,000, and the average T20 household RM14,000.

Note: Getting ahead in life means inching up the rungs of each band and, perhaps through education and successful career advances and business ventures, even leaping from B40 to M40 or from M40 to T20. However, formal education and work success can be seen as somewhat extrinsic factors.

Before those may kick in though, the intrinsic factors of self-discipline, delayed gratification and proactive cash flow discipline can work wonders. As Babson once observed:

“More people should learn to tell their dollars where to go instead of asking them where they went.”

Babson’s wry observation is more than a clever turn of phrase. In the personal finance classic, The Richest Man in Babylon, author George S. Clason wrote:

“Babylon became the wealthiest city of the ancient world because its citizens were the richest people of their time.”

That logical observation by Clason holds great significance for Malaysia because our country has long been stuck in the “middle income trap” largely because of ineffectual, sometimes damaging, government policies that resulted in rising corruption, falling educational standards, the wilful abandonment of meritocracy, and weak productivity gains in industry.

It’s anyone’s guess if our still new Pakatan Harapan government retains the strength of vision and internal fortitude to reverse decades of institutionalised rot. Thankfully, we Malaysians can do much more for ourselves than merely waiting for our government of the day to rescue us.


Once again borrowing Clason’s words, this time as they refer to Babylon’s well-heeled citizenry:

“They appreciated the value of money. They practised sound financial principles in acquiring money, keeping money and making their money earn more money. They provided for themselves what we all desire... incomes for the future.”

In our personal bids to get ahead in life, be it within the vertical scope of our present demographic band, or more ambitiously, to the band above our current one (from B40 to M40 or M40 to T20), it is our relentless focus on a brighter future that is essential for significant upward social mobility.

So, in next week’s column, I will zero-in on the importance of ceaseless self-education and of intentionally harnessing the potent power sources of capitalism: saving and investing.

© 2019 Rajen Devadason

Rajen Devadason, CFP, is a Licensed Financial Planner, professional speaker and author. Read his free articles at; he may be connected with on LinkedIn at, or via [email protected] You may follow him on Twitter @RajenDevadason.

678 reads