We are living in interesting and yet challenging times. These are commonly summarised as Vuca moments which are characterised by volatility, uncertainty, complexity and ambiguity.

These Vuca moments are prevalent in politics, economics, climate change as well as investment circles. Such an environment affects confidence, creates risks and increases emotional trauma.

Anyway, this is no time to panic or fret. Let me demonstrate that there can be financial success in these tumultuous times. I will argue against the common prevailing notion that financial success is completely out of reach for most people.

What does financial success mean?

Financial success is unique and differs from one individual to the next. To some, financial success might mean freedom from debt. To others, it might mean full financial independence.

How do you measure your financial shape? It really depends on what your individual goals are. One prudent measure is to determine your net worth.

If you add up the value of all of the property that you own and subtract from it all of your debts, what's that number?

Ideally, that number should be higher than it was a year ago. If it's higher, then you are achieving financial success. If it's not, more especially if this pattern keeps going up, then you are making some missteps and not achieving financial success.

That level of financial success is obtainable for virtually every South African. There is almost no one out there in a situation where they could not improve their net worth over a year, if they chose to act.

Assuming that there's no change in a person's spending or professional income and assuming that they are spending less than they earn and doing something productive with it, then over a period of time that person's net worth should start to accelerate.

As that person pays off debt, he or she will be able to devote more and more money each month to paying off the balance of debts and less and less to paying off interest. Eventually that debt is gone and that money goes towards savings and investments, which will start growing on their own as the returns on investments are compounded.

What is hindering our financial success?

The problem is that most of the people are defining success in terms of other people. The only fair way to judge success is by using yourself as a measuring stick.

Have you taken steps to put yourself in a better situation than you were in before? That's all that matters.

It is unrealistic to compare your financial state to someone else's who was given a huge inheritance, for example. The only race worth running is against your prior behaviour.

When you strip away the advantages (and disadvantages) that other people have, you're left with nothing but yourself.

Can you do better than you did yesterday? I am, therefore, a proponent of defining financial success by having improved your net worth relative to prior year(s).

It is prudent not to judge your own success by the circumstances of someone else's life. It will either make you frustrated or make you complacent. Instead, use your own past as the metric for success.

Final thought

Effort is the single key ingredient in financial success, or any kind of success. If you work hard and do not find success, you either need to look more carefully at where your effort is going or else reconsider your definition of success despite the economic or financial turmoil.

- Sekese is a certified financial planner professional and member of the Financial Planning Institute (www.fpi.co.za)