WE stand at the brink of another New Year. As I wish you a happy one, let me say I suspect it will be our best year in a long time.
After the debilitating economic headwinds of Covid-19, Russia's (ongoing) vile war against Ukraine, high global inflation, and subsequent monetary tightening by most central banks to fight rising prices worldwide, we finally have a powerful tailwind to propel us upward.
Of course, it won't be all roses and sunshine next year. Life doesn't work that way; there will be ups and downs in world affairs, Malaysia's fortunes, and our lives.
When it comes to dealing with setbacks, which are non-negotiably embedded within the landscape of mortal existence, I resonate with what 19th century American poet, philosopher and writer Ralph Waldo Emerson wrote:
"Our greatest glory is not in never failing, but in rising up every time we fail."
Emerson was a literary and philosophical genius — a big deal in his day. So, I promise to circle back to him soon. For now, though, please heed four timely steps we can take to prosper in 2024.
POWERFUL TAILWIND
Here goes…
The "powerful tailwind" I referred to earlier should materialise, build useful momentum, and tangibly help those who are prepared to prosper throughout 2024. This mysterious tailwind that I keep referring to is our soon-to-occur cessation of widespread global interest rate hikes – which began in March 2022 to battle inflation everywhere.
(Note: Excessive inflation is damaging because it makes all of us poorer through the inexorable compounding erosion of the purchasing power of our money.)
With our planetary battle against inflation likely to be won in 2024, we can expect, first, a levelling of interest rates, and, later, their gradual reduction in most nations. That flattening and then falling of interest rates will be fabulous news for investors.
This is because investment asset prices largely move inversely to interest rates. Therefore, should they fall in 2024 — as I believe they will — there shall be knock-on increases in the prices of risk-on asset classes like equities, fixed income and investment real estate. Still with me?
This chain of causality means that the most hardworking, ambitious and diligent among us who have consistently saved money in cash instruments like bank accounts and money market funds may wish to gradually redeploy some of their liquid assets into risk-on ones.
Hence,
Timely Step 1: INVEST
Also, from a prudent personal finance perspective, paying down — with the noble aim of paying off — all debts sooner rather than later will inject peace, stability and strength into our financial lives.
Timely Step 2: PAY DOWN DEBTS
Yet we must remember our best RoI (return on investment) always stems from the investments we make in ourselves. As I wrote in last Sunday's Money Thoughts column, reading is the single best life-enhancing super-skill.
Based on what I've learnt (yes, through reading!) about Emerson, he would have agreed. He once wrote, "One must be an inventor to read well… There is then creative reading as well as creative writing.
In our 21st century Knowledge Economy, creativity is cerebral currency. So, we should read — widely, deeply, eclectically, voraciously — to increase our mental capital.
Years ago, I promised myself I'd never walk out of a bookstore — physical or online — without buying at least one book. For this column, I took a quick glance at some such purchases that have earned permanent shelf space in my three libraries: in my office; in a dedicated room at home, and in a brimming, smaller one in my bedroom. Here are eight such titles, from hundreds:
1. Ikigai — Discover Your Reason for Being by Justyn Barnes;
2. Warren Buffett's Ground Rules by Jeremy Miller;
3. A Short History of Nearly Everything by Bill Bryson;
4. Pinterest Marketing — An Hour a Day by Jennifer Evans Cario;
5. The Total Money Makeover — A Proven Plan for Financial Fitness by Dave Ramsey;
6. Charlie Munger — The Biography published by University Press;
7. How to Master the Art of Selling by Tom Hopkins; and
8. Needle in a Timestack by Robert Silverberg
Timely Step 3: READ A LOT
Emerson's first wife Ellen Louisa Tucker married him when she was 18. She died of tuberculosis two years later, in 1831. Long after her passing, Emerson visited Ellen's grave every single day.
A year after her demise, in a letter dated Feb 1, 1832, to Ellen's cousin Elizabeth Tucker, whom Emerson was fond of, he wrote in the elegant style of his time;
"The best of all ways to make one's reading valuable is to write about it, and so I hope my Cousin Elizabeth has a blank book where she keeps some record of her thoughts."
What's good enough for Ralph Waldo Emerson and Elizabeth Tucker is certainly good enough for Rajen Devadason. And, perhaps, for you?
Timely Step 4: KEEP A JOURNAL OF LEARNINGS AND MUSINGS
Dear Reader, as I wish you an extraordinarily Happy New Year, I hope you take all four Timely Steps to make 2024 your best calendar year yet.
© 2023 Rajen Devadason
Rajen Devadason, CFP, is a securities commission-licensed Financial Planner, professional speaker and author. Read his free articles at www.FreeCoolArticles.com; he may be connected with on LinkedIn at www.linkedin.com/in/rajendevadason, or via [email protected]. You may also follow him on X @Rajen Devadason and on YouTube (Rajen Devadason).
