HALF a century ago, when I was a primary school student at St Paul's Institution (SPI) in Seremban, some of my friends who came from richer homes began turning up in class with coloured felt-tip pens. These left far more vivid lines, strokes, smears, and shades than the cheaper colour pencils most of us used in art class.
(Confession: At age 10, I exhibited zero aptitude for drawing and painting. Sadly, if anything, I've managed to get worse at art over the 50 years since I was in Standard 4.)
Those cool colouring implements that my well-heeled friends brought to school first were called Magic Markers. They were the trendsetters who introduced the rest of us to a new way of colouring on a sheet of art block paper.
In due course, I secured my own Magic Markers — most likely by asking my mother if I, too, might have a set. Alas, my finished artwork never showed any improvement from what I had customarily handed in using more prosaic colour pencils.
When I first had the idea for this particular Money Thoughts column, I did a little Internet sleuthing. I learnt that someone named Sidney Rosenthal, who lived in the New York City borough of Queens, in either 1952 or 1953, figured out how to put together an ink-filled glass bottle that was elegantly connected to a wool felt wick and writing tip. That marked the birth of Rosenthal's Magic Marker.
This innovative inventor selected that snazzy name because his then-new colouring instruments could, apart from regular paper, also write upon surfaces as varied as cloth, wood, and concrete.
MANAGING MONEY WELL
What got me thinking about the Magic Markers of my dim and distant youth was that, today, there is a lesser known yet similar sounding term — Magic Margin. This, interestingly, can help motivated, driven, ambitious individuals "write" their legacies upon the varied fabric of their lives.
You see, all of us have some form of creativity buried deep within. As we make our way through life, from crawling infant to toddling and later running child and then with accelerating speed from juvenile to geriatric, there are unique gifts we can scatter as we carve out our personal journeys on Earth.
As we do so, natural ambition often guides us to figure out which summits we would like to clamber up and, ideally, conquer. And, speaking of conquering, in the olden days, warriors skilled at taking cities and hunters adept at bringing down wild game enjoyed the choice fruits of their labour, including the so-called apex resources of their respective societies.
Over the ensuing millennia of human development, the most important skill sets changed right alongside the evolution of our social order. The dominant contributors and thus biggest winners of society sequentially segued to those who owned land, raised livestock, grew crops, and started viable businesses that accrued big profits.
Today, with our global population fast approaching 8.2 billion people, there is no doubt what the primary determinant of contemporary secular success is:
The ability to manage money well.
Clearly the apex denizens of our planet today are the roughly 2,700 (United States dollar) billionaires scattered all across Earth's surface, with their highest concentrations currently residing in these five urban centres: New York City, London, Mumbai, Beijing and Shanghai (source: https://en.m.wikipedia.org/wiki/List_of_cities_by_number_of_billionaires).
Thankfully, though, we don't need to reach US dollar billionaire or even millionaire status to exhibit productive skills that set apart the relatively fewer winners of 21st century life from the many more (whom we might refer to as) also-rans.
The defining trait that separates today's economic winners and losers, regardless of whether they have lots or only a few zeroes in their net worths, is whether they can generate — throughout their economic lives — a Magic Margin.
MAGIC MARGIN
So, what's a Magic Margin?
Merely a straightforward cash flow surplus. You see, each time we spend more money than we earn, our cash flow position goes negative and thus generates a deficit. That's bad.
But each time we spend less than we earn, our positive cash flow pattern yields a surplus. The generation or creation of each such precious cash flow surplus produces what every one of us might call our personal Magic Margin.
The concept is simple to grasp:
If we spend less than we earn, and save and invest the difference for a long, long time, we will succeed financially. And in this day and age, succeeding financially goes a long way toward permitting us to leave our unique, self-defined marks of success upon our world.
Three such — admittedly non-exhaustive — marks of material success are:
1. Living well — bounty
2. Giving well — philanthropy
3. Providing well — legacy
Just as Sidney Rosenthal's Magic Marker, which I used as a boy, had the delightful ability to leave colour on most surfaces, our adult-generated Magic Margins allow us to savour the bounty of a multi-hued life in the here-and-now. To experience the full spectrum of philanthropy today and tomorrow; and, rather crucially, bequeath a rainbow of nurturing legacies when we fade away to eventually cross to the "other" side.
© 2024 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 rajen@RajenDevadason.com. You may also follow him on Twitter @Rajen Devadason and on YouTube (Rajen Devadason).