MONEY THOUGHTS: Succeeding through sequencing

EVERYONE wants to succeed financially. That's a given. But not everybody knows how to do so.

You see, each person's life journey to, hopefully, greater financial strength is different.

Part of the reason each of our economic paths is unique is the different ways we are hardwired at birth (by nature) and our experiences along life's pathway (through nurture).

To succeed financially, either we personally need the requisite knowledge to attain financial success, or we rely on immense wealth built up by parents or ancestors that was passed down to us.

That second group is so rare I won't focus on it here. I will just say if you are in that fortunate minority, your focus should be prudent capital allocation. As for the first group, I have much more to say.

To begin with, I will give you a word-sketch that you may choose to use as a rough blueprint to create a personalised map to move from where you are today, regardless of your age and how little or how much you have in the bank, to where you wish to get to tomorrow — economically speaking.

Here goes:

We will start with a list of considerations sequenced in logical fashion:

1. How to earn and manage our money;

2. How to correctly view insurance;

3. How to save money;

4. How to invest;

5. How to ramp up current saving and investing activities with delayed gratification; and

6. How to leave a meaningful legacy.

When it comes to earning our money and managing it well, we should focus on increasing our active income throughout our working years by committing to working harder, longer and smarter.

We have a limited allotment of time on Earth. Those who prosper financially are the ones who manage their productive periods well. Consider this pertinent piece of advice, which Benjamin Franklin wrote in 1748 to a young tradesman: "Remember that time is money."

INSURANCE COVERAGE

As we earn our money, we need to simultaneously control our expenditures so we generate consistent cash flow surpluses.

I will have a lot more to say soon about what to do with those surpluses, but as we begin to build our career, we need to recognise that there is always a small probability that we might die prematurely or fall seriously ill well before we build up a personal pile of capital that allows us to become self-insured.

Therefore, looking into the need for us to buy appropriate insurance coverage is important.

Four forms of common insurance we should begin our consideration of coverage with are life insurance, critical illness, hospital and surgical and personal accident.

Way back in 1911, Winston Churchill delivered a speech on National Insurance, where he said: "...We bring in the magic of averages to the aid of the millions."

He was referring to the way the Law of Large Numbers and statistics allow us to pay insurance premiums to transfer some risks associated with living and dying from ourselves to large, well-funded insurance companies.

As you gradually layer on the different forms of desired insurance coverage, it is wise to build up regular monthly cash flow surpluses in savings instruments like bank savings accounts, fixed deposits and pure money market funds.

My advice: make saving money a higher priority than investing, at least in your first few years of working adulthood.

SAVINGS AND INVESTMENT

However, as you build up your cash savings, which will time — typically take years, use the time to learn about the reasons for and mechanics of accumulating different savings and investment asset classes.

The five main ones are cash, fixed income, equities, investment real estate and alternative investments. As you learn about them, you will better grasp "what" to own.

The "whys" of saving and investing are different, though, so it is useful knowing what they are. We save to stabilise our finances and thus to stabilise our emotions. But we invest to try and grow our money faster than inflation and taxes erode our buying power.

As our saving and investment activities gather momentum, we will want to become more adept at both disciplines. Committing to delayed gratification will help you do so. That involves giving up some things that are good today to be able to enjoy stuff and experiences that are great tomorrow.

In due course, when the time comes for us to retire, hopefully our retirement nest egg will be large enough to sustain us throughout a long, happy, well-funded retirement.

Then, when wealth distribution becomes a priority, using a will and perhaps also a private trust will allow us to leave legacy gifts to children, grandchildren, and charities, in a manner that aligns with our long-term goals.

The logical blueprint outlined above for you has the potential to help you live your life successfully. My task of writing about this has been relatively easy. What's hard is what you will do with all this information in the months, years and decades ahead.

All the best implementing this logical sequence of various personal finance disciplines to thrive in the coming decades.

© 2026 Rajen Devadason

Rajen Devadason, CFP, is a Securities Commission-licensed financial planner, professional speaker and author. Read his free articles at www.FreeCoolArticles.com; connect with him on LinkedIn at www.linkedin.com/in/rajendevadason, or via rajen@RajenDevadason.com. You may also follow him on Twitter @Rajen Devadason and on YouTube (Rajen Devadason).