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New Straits Times
01-06-2025
- General
- New Straits Times
MONEY THOUGHTS: Quit stalling – Just get it done!
"EAT your vegetables. Save your money. Exercise. Stop procrastinating. Read more. Learn to invest." Do some of those pointed pieces of advice sound familiar? Do people who care for you nag about your diet, finances, weight, and life in general? What about, "Work harder; work longer; work smarter?" Interestingly, those career-centric exhortations are probably not hurled at you from the outside, but are internally generated as you "talk" to yourself — silently, I hope — while toiling from morning till evening or, as is increasingly the norm, from dawn till after nightfall. Each bit of advice, be it externally or internally generated, is solid. Unfortunately, sheer willpower won't permit us to internalise beneficial behaviour. We aren't wired that way. Qualitatively, the way to weave good behaviour into the fabric of our lives is, ironically, the same way we overlay bad behaviour onto our personalities. The late Stephen Covey, author of The 7 Habits of Highly Effective People, taught his readers, students and clients this lesson: "Sow a thought, reap an action; sow an action, reap a habit; sow a habit, reap a character; sow a character, reap a destiny." Mull upon Covey's five-part sequence: Thought to action to habit to character to destiny. The third and middle link in that five-part life journey from thought to destiny is "habit". And all of us grow up with a unique blend of good and bad habits. GOOD HABIT, BAD HABIT Our good habits, taken together, help us rise in life. (Consider a poor hardworking student in, say, India who excels at school, wins scholarships, attends a top-notch university, joins a Silicon Valley tech company in the United States, and eventually is elevated to the position of chief executive officer within a healthy ecosystem that rewards meritocracy) Conversely, our bad habits, collectively, drag us down into the figurative muck and mud of a sorry existence. (Countless stories have been written and shown on screen of ne'er do well children from privileged and wealthy families who destroy themselves through habitual alcohol and drug misuse, and end up in the gutter.) Let's face it: We're all human, which means we are, without exception, mosaics of different habits — good, neutral and bad. Within the financial sphere of our lives, regular readers of Money Thoughts know that I've recently focused on a money-centric: 1. Principle — buy-low-sell-high; 2. Strategy — Dollar-Cost-Averaging or DCA; and 3. System — using a bank's standing instruction- or SI-based facility. (Bookmark if you'd like to read those specific columns, and others.) Today, we will explore the centrality of emotionless, automated saving and investing using a bank SI. MAKING THE SHIFT Most people I know have more than one bank account, typically three or four, spanning different banks. Having said that, we all use one specific bank more frequently than the others. Our preference may be based on the availability of helpful bank staff, ATM (automated teller machine) network coverage, proximity to our home or workplace, savings and fixed deposit interest rates, and relative ease of using online banking systems. At the start of this column, I mentioned the self-talk we indulge in regarding work. As much as we may love our work, we all must make the shift — across our lifespans — of merely working for money to having our money work for us. We begin the process by setting aside money to work for us by saving it and investing it. The more consistently we carry out both of those core life disciplines, the better our financial lives will be: today and tomorrow. As Stephen Covey wrote, "The key is not to prioritise what's on your schedule, but to schedule your priorities." Within the context of saving and investing steadily and emotionlessly, regardless of how we feel and how tumultuous capital markets may be, there is no better bank-based service than the SI. Confession: I rely heavily on my established bank SIs. Therefore, I recommend you establish a realistic written budget which integrates a reasonable degree of delayed gratification into it to help you generate a consistent cash flow surplus. This can work whether you earn RM2,000, RM20,000 or RM200,000 a month. (While most of us inhabit the lower end of that scale, what is important is not how much we earn but how much we save.) QUIT STALLING When it comes to nurturing the crucially good habit of saving regularly, which will then lead to the even better habit of investing regularly, the best system I know is harnessing a monthly bank SI to fuel a long-term savings and investment programme. To learn how to set up your first SI you might chat with your friendly neighbourhood banker, a trusted unit trust consultant, a licensed financial planner, or a family member or friend with a compelling mix of great financial habits and relevant experience. I hope you choose to act on this. When you begin, start "low" and go "slow". Over time — as this wonderfully good habit embeds itself within your psyche — you can ramp up the amounts you extract from today's cashflow to balloon your capital pile to fund tomorrow's needs, wants and dreams. So, quit stalling. Get it done! © 2025 Rajen Devadason
New Straits Times
18-05-2025
- Business
- New Straits Times
MONEY THOUGHTS: High volatility: Friend or foe?
THE world's greatest investor is Warren Edward Buffett, currently (still) chief executive officer of New York Stock Exchange-listed Berkshire Hathaway. Buffett will turn 95 on Aug 30 this year, and recently announced that at the end of 2025 he will step down as CEO, yet thankfully retain his chairmanship of Berkshire, which he's controlled for 60 years. The reason many also consider Buffett the greatest living teacher of investing is his staggering capacity to adroitly share his thoughts and guidance on both business and investing. You will undoubtedly benefit from listening to Buffett speak on different facets of lifelong investing. So, here's a brief video clip of him speaking about recent market volatility: Note: Earth's capital market comprises two parts: the ownership-focused equity market, and the loanership-based fixed income market. Both are subject to price and thus valuation volatility. This means we might, understandably, lose sleep when our capital market investments fall in value. Frankly, it takes time (and many psychic bruises) to learn how to look at oscillating markets and rollercoaster valuations in an appropriate (translation: profitable) manner. Ideally, each of us should aspire to become incrementally better at stomaching unavoidable market volatility over the course of a typical two- to seven-decade investment time horizon spanning one lifetime. CRUX OF INVESTING In last week's Money Thoughts column, I referenced a foundational sentence written by Buffett's mentor Benjamin Graham, who is known as the Father of Security Analysis. In his important 1949 book, The Intelligent Investor, Graham stated: "Investment is most intelligent when it is most businesslike." Understand that Buffett was just 19 years old when he first read that seminal book. It triggered in him a trajectory-changing epiphany about the best way to invest. Later, Buffett studied under Graham at New York City's Columbia University, and several years later worked in Graham's investment firm Graham-Newman Corporation before branching out on his own when Graham retired. I'd now like you to think about what you do to earn a living… It probably involves providing goods or services, or both, in some way, shape or form. Am I right? For any such economic entity to succeed long-term, it must generate a surplus or profit. How is that done? By buying low and selling high, or by producing or manufacturing "stuff" at a cost that's lower than its selling price. That's the crux of any business. Therefore, if we take Graham's dictum to heart -- "investment is most intelligent when it is most businesslike" -- we understand it is also the crux of investing. HANDLING MARKET VOLATILITY Since volatile zigzagging investment asset prices give us numerous seasons to "buy low and sell high", it should be logical for us to welcome capital market volatility. However, we aren't always logical. Frankly, more often than not, we're nervous, anxious and afraid. Nonetheless, while there has only ever been one Warren Buffett, all of us can set the stage for greater economic success for our families and ourselves in the coming years and decades by taking three steps to better handle intermittent market volatility: 1. Save first, invest second; 2. Diversify across several asset classes and geographic regions, as well as over a very long timeline; and 3. Dynamically rebalance our portfolios when volatility creates opportunities and reasons to do so. To elaborate: Although successful investments yield far better returns than boring savings, having fat layers of cash savings help us all to stabilise our finances and thus steady our emotions during terrifying periods of market dislocations. (Interestingly, Buffett raised Berkshire's typical stabilising cash pile of US$100+ billion to more than US$300 billion prior to the steep capital market plummets triggered by Donald Trump's selfish, unwise, tariff-weaponised egregious assault on global free trade. Throughout his life, Buffett's been a genius-level observer.) In our own lives, within our undoubtedly smaller portfolios, similarly thickening our cash layers can and will stabilise our thoughts and thus our aggregate asset piles. INTELLIGENT DIVERSIFICATION The old saying, "Don't put all your eggs in one basket," encapsulates in just eight words the real reason intelligent diversification works so well in the rough and tumble world of global investing. Next week I'll elaborate on the powerful wealth-building strategy called Dollar-Cost Averaging or DCA. It is the best way I know of implementing the powerful principle of buying low and selling high. (If you aren't currently using it for your own investments, be sure to head back here for next week's DCA-focused Money Thoughts column.) Finally, for now take heed of the extreme valuation swings which sometimes materialise when high investment market volatility provides us with intermittently high and low portfolio values. As long as we stay focused on the wisdom of buying low and selling high, intense market volatility can — at different times — grant us high price levels to sell assets and thus raise our cash levels, and low-price levels to buy assets with our saved or stockpiled cash. Repeated cycles of buying low and selling high can help us build up liberating levels of wealth. © 2025 Rajen Devadason
New Straits Times
04-05-2025
- New Straits Times
MONEY THOUGHTS: Is this as good as it gets?
A FEW weeks ago, I managed to squeeze in an overdue family holiday. The six of us stayed at Strawberry Park Resort in Tanah Rata, a picturesque town in Cameron Highlands. The resort's on-the-ball and personable general manager John Yeo granted us a private tour of the property's fruit and vegetable farm, which was fascinating. Also, each night while resting in my room before bedtime, snug in my thick hoodie and wearing socks because I'm lousy at dealing with cold weather, I read. (Confession: I typically read between three and six books at a stretch, cherrypicked from my home and office libraries, and also from various titles I've stuffed into my travel bags.) Unsurprisingly, therefore, another highlight of that trip was lunch at a cosy eatery called Amsterdam Cafe, just 5km from Strawberry Park. When we showed up there, we were served by the owner, a friendly Malaysian who is married to a Dutchman. Upon entering, we gravitated to a quiet table toward the back. And as I walked in, I spied shelves weighed down by beckoning volumes, so I made a beeline for that collection of books, thick and thin, set against the far wall. I scanned several titles before settling on a slim kids' book entitled The Cricket in Times Square by George Selden. The book was first published in 1960, four years before I was born, which appealed to me because I often prefer older novels set in times simpler than our own. Then, book in hand, I joined my family at the table, hoping to consume a few pages before my meal came. But there was no chance to do so because of the swirling conversations. Our food arrived quickly and, between bites, we made plans for what we would do in the second half of that lovely day. As such I quickly realised I wouldn't have time to read even a few pages of what appeared to be a fun story. So, before dutifully returning the Amsterdam Cafe's copy of Selden's book to its place on its shelf, I photographed its cover. Then, still at our table, I fired up the Amazon app on my phone and ordered a copy for myself. Fast forward: Although I didn't pay for expedited shipping, which I consider a waste of money, my personal pristine copy of The Cricket in Times Square arrived in fewer than 10 days. Today, as I write this Money Thoughts column in Singapore, where I am for work meetings and visits to other family members, I've just completed the delightful tale of Chester Cricket, a diligent young boy named Mario, and Chester's friends Harry Cat and Tucker Mouse who are, as their names attest, respectively, feline and rodent. LIVING LIFE WELL Permit me now to switch tracks: As I think back more than 20 years, there was an unforgettable quotation by American publisher and high-octane motivational speaker Charlie 'Tremendous' Jones, which truly spoke to me then. It still does. Jones said: "You will be the same person in five years as you are today except for the people you meet and the books you read." I actually met Charlie Jones once, at an event organised by MAPS, the Malaysian Association of Professional Speakers. It was most likely in 2007 or early 2008, because he passed away from cancer on Oct 16 2008. I had taken to heart his teachings long before that encounter so I politely thanked him for his powerful presentation to us MAPS' members. As the night wound down and I said my goodbyes, Jones then drew me into a tremendous bearhug that surprised me and delighted me. He lived his life tremendously well. Also, his legacy of teaching others to celebrate life enthusiastically continues to gather momentum. But what about us? With each passing year, life grows tougher for most people in most places. Therefore, I'm sure that many of us sometimes wonder to ourselves: Is this as good as life gets? Well, if you find yourself asking that same question with growing pessimism, then I hope these three pieces of advice — from me to you — inject hope, optimism and anticipation into your mind and your whole life: 1. Grow your ability to earn money by expanding your network of high calibre people; 2. As you do so, learn, think, and apply what you gain from reading and from meeting interesting people; and 3. As you earn more money through active income-generating effort, channel some of that arduously earned active income into savings and investments that can later pump out copious amounts of passive income. Do also remember the two dovetailing parts of Jones's advice to our world: 1. Meet high quality people and learn from them. As you do so, develop yourself so that they, too, may benefit from knowing you. 2. Read books, both non-fiction and fiction; and do so voraciously and intentionally. Jones' advice is simple. It's also tremendously effective. So, I hope you enrich your bank account and — far more importantly — your entire life by heeding his wisdom. © 2025 Rajen Devadason
