THE TEMASEK REVIEW

By James Oh

One of the keys to success is being meticulous. You need to pay close attention to  details so as to master a particular trade. This profound principle also applies to wealth creation process.

Saving is the main core step in wealth creation. It was highlighted well by Ben Franklin “Beware of little expenses; a small leak will sink a great ship.” We can’t deny that it forms the fundamental pillar in sustaining wealth. As such, no matter how small you begin, it will eventually turn into your financial reserve, which will then be used as a bridge to the next higher level of wealth. This reserve is required to cushion you throughout the waiting period for your harvest. Here, I am not disputing that you may get instant windfall on your investment venture, but the probability is remote.

At the same time, it is not wise for you to live in another extreme scenario whereby you keep on cutting expenses until you do not live life at all. Therefore, you need draw a line where to put a stop.

Alternatively, you may make some alteration to your spending pattern in a such way that can bring more benefits for the extra you spent. For instance, you may reward yourself with a gift/ have a celebration for your new achievement. This is important because it will drive you further to achieve a next higher target in the long run. By doing so, you will also have a more meaningful life. In reality, this sort of benefits may be difficult to quantify with accuracy especially if you want to take into account those intangible benefits that associate with the extra you have spent.  Here, you have to use your gut feeling or experience to gauge this value. No doubts, it is very subjective and arbitrary. But, we have to take it into consideration so as to give us a fair value of it.

However, it may be even more complicated especially if we wanted to book in the value of its indirect benefits such as good feeling which may indirectly enhance your productivity due to the good effect derived from the extra money that you have spent.

Your judgment will only improve through trials and testings. Individual’s wealth management skills are also not exempted from this process. Similarly, saving is a skill where you have to practise until it become part of you, i.e. ingrained as a habit. You will then be able to be in control of yourself and not spend lavishly, without affecting your main financial goals. Despite the fact that you allow some deviation against saving, you are in overall control of keeping  your financial goals intact. This is because  you have  mastered the skill that allows you to control your spending pattern so as not to affect your overall financial structure. No one can challenge you in this aspect because you are the only one who knows your financial destination. This operate exactly like the ship captain who maneuvers his ship when he faces with unexpected storms or other challenges that come along his voyage.

Some use budgeting tools to navigate their spending pattern to keep their finance on track towards their financial destination. I am not against this idea. However, I want to warn you that more than often we will not achieve our  budget no matter how well you prepared it. In reality, there are so many unknown factors which are not possible to predict with accuracy. A good examples is the fluctuation of the foreign exchange rate. Therefore, your experience and skill will come into play in these areas to assist you to make those necessarily adjustment that will not have any adverse impact on your financial destination.

It is clear by now that priorities lead to prosperity. Your financial prosperity will be your most highest priority and you will prepare to do anything to ensure that this priority will stay intact no matter what happens to you.  By focusing on that particular financial prosperity, coupled with other values such as persistence and power of concentration, I  see no reason why you cannot achieve it.

Once you have achieved your financial destination, the more challenging issue is how to sustain it. You must be aware that it is much more easier to achieve your financial destination than sustaining it. To sustain it, you need to stay in control at all times. Bear in mind that the more wealthier you are, the higher risks you are exposed because more swindlers will prey on you than others. You also need to be guarded against your own temptations which more than often make you stumble. What bring you up may bring you down as well. That is the law of nature that has been operating throughout the human history.

James Oh

Other articles by James Oh:

>> How to get faster results

>> How to retire gracefully

>> Steps to overcome major obstacles of staying healthy (Part 2)

About the Author:

James Oh is an accountant by profession and he works as a Financial Controller for more than 10 years with several companies in Singapore and Malaysia. He is a full member of the Singapore Institute of Director and he also obtained a LLB (Law degree) from the University of London in 2003. He is happily married with 3 loving kids.

James blog at http://liftyouup.blogspot.com

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