Batten Down the Hatches
In tumultuous times, financial success isn’t about outrunning the market—it’s about outperforming your past self.
In the 19th century, when a ship entered rough seas, the captain ordered the crew to “batten down the hatches”—securing all doors with rods to protect the vessel. Today’s global volatility in politics, economics, and climate change represents those same rough seas. But even in this environment, financial success is not only possible; it is obtainable.
Defining Financial Success
Success is unique to the individual. For some, it is debt-free living; for others, it is total independence. The most prudent way to measure your “financial shape” is through your Net Worth.
The Golden Rule: Is your Net Worth higher today than it was a year ago? If yes, you are succeeding.
1. The Action
Spend less than you earn and do something productive with the surplus. This simple step is the catalyst for growth.
2. The Acceleration
As you pay off debt, you save on interest. This “freed up” money can be redirected to further reduce balances or increase savings.
3. The Compound Effect
Once debt is gone, your investments grow on their own through the power of compounding returns.
What hinders our success?
The problem is often comparison. Comparing your financial state to someone with a large inheritance or different circumstances leads to frustration or complacency. The only race worth running is against your own prior behavior.
Can you do better than you did yesterday? That is the only metric that matters.
Final Thoughts
Separate the noise from the facts. Stick to your strategy and only alter your position during major life changes (marriage, career shifts, etc.). Avoid the temptation of unnecessary debt during tumultuous times. Effort is the key ingredient—if you aren’t seeing success, re-evaluate where that effort is being spent.
Created by: Sydney Sekese, CFP®
Old Mutual
