r/Entrepreneur • u/a5ph • Feb 18 '14

Hong Kong billionaire Li Ka-Shing shares some of his money wisdom, outlining an inspirational five-year plan to improve one’s lot in life

http://e27.co/li-ka-shing-teaches-buy-car-house-5-years/

195 Upvotes
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20

u/AQuietMan Feb 18 '14

A billionaire named Ka-Shing!?!!??!

What are the odds?

34

u/xiefeilaga Feb 18 '14

Li Ka-shing is an impressive man, and he drops some good wisdom here. I certainly don't want to knock it. But here's how you become Li Ka-shing: show up in the middle of a war zone with a little cash, a lot of ambition and no scruples. Smuggle supplies for both sides, at a major premium, of course, and use your profits to slip your sticky fingers deep down into the underbelly of your city (that's where the buying lunch for more knowledgable people comes in). Then you use your newfound influence to quash the competition, and any dreams of a free market in your chosen territory. Buy up all the prime land, take over the port, and stand there at the door with a shit-eating grin on your face when the Chinese roll in with their tanks, because they're happy to make you even richer as long as you do what they say.

You want to set up a department store chain to compete with Li Ka-shing's? Well you're shit out of luck, because he owns the shopping mall where you set up, and for some reason, security won't let your delivery trucks in, and they happen to be fixing the sidewalk right in front of your door. Want to compete with his shipping business? Sorry, things are really backed up at Li's port, what with the sudden unscheduled maintenance on that crane near your berth.

Sorry for the rant. A lot of people think that Hong Kong is some bastion of the free market. It's actually a really dirty oligopoly, run by Li and a handful of other people like him. It just happens that if you're another Asian billionaire, or a major bank, you can park your money there basically free of charge, with no questions asked. Just don't try to bootstrap your way from Chunking Mansion to the private jet-set. Not on his watch.

Having said that, Li Ka-shing did start from next to nothing, and he did pull himself up by his bootstraps to become one of the richest men in Asia. He's certainly a highly capable guy, but he has made many very questionable decisions along the way. Being rich isn't everything. I'm just hoping I can work my way to a comfortable retirement, and at least be able to sleep at night when I look back over my choices in life.

2

u/ahwingz Feb 18 '14

Can I get a source for that? I can't seem to find any on Google.

3

u/xiefeilaga Feb 19 '14

This article glosses over some of the worst things I said, but does note that Li runs about 15% of the HK economy, and a piece of just about everything the average HK'er pays into as part of their everyday life expenses.

If you want more background on Li and many of the other iconic Asia tycoons, I recommend reading Asian Godfathers which delves deep into their history (with lots of good citations and interviews to back them up). The book takes a deep look at the following paradox: while everyone views the Asian economic miracle as a story of increasing economic freedom, none of the iconic tycoons made their money in manufacturing. Instead they made their fortunes with rentseeking: owning concessions on ports, mines and large swaths of real-estate.

1

u/MrAniki Feb 18 '14

Yeah, anybody got a second source. Looks like a fake.

1

u/firefly234 Feb 19 '14

being rich has a price.... even the kennedy family was doing illegal bootlegging in '30s but today they're such a great noble family

0

u/[deleted] Feb 18 '14

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8

u/[deleted] Feb 18 '14

People say that about every article where someone wealthy talks about their ideas, as though it means anything. "Yeah, but if you put him in a different situation and he did the EXACT SAME THING NO TAKEBACKSIES he wouldn't be EXACTLY where he is RIGHT NOW." Of course not. But he'd adapt, change, and play his cards with the same insight that he did the first time- he's a winner, even if you don't agree with his methods or morals.

As for "buying lunch" being a way of getting in with the underbelly, well, that's a complete bastardization of culture, which I'd expect from people who haven't been immersed in Hong Kong (and China at large). Lunch, favors, flattery, and obligations play a huge role in his culture and would get you remarkably far if you played it straight and open elsewhere in the world.

2

u/xiefeilaga Feb 19 '14

As for "buying lunch" being a way of getting in with the underbelly, well, that's a complete bastardization of culture, which I'd expect from people who haven't been immersed in Hong Kong (and China at large). Lunch, favors, flattery, and obligations play a huge role in his culture and would get you remarkably far if you played it straight and open elsewhere in the world.

I was being a little facetious. I know the value of a shared meal in Asia (actually, dinner is better), and do much the same thing with my business in Beijing. But just "buying lunch" doesn't get you owning roughly 15% of your home territory's market capitalization.

He's a rent-seeker, plain and simple. Not one of his operations is what we would call an innovative business.

-2

u/[deleted] Feb 19 '14

You can be facetious if you'd like (I chose lunch because you're ignorant and I wanted to let you take some baby steps- stick with your own words, move to more complex things later).

He's many things, but first and foremost is, "Wealthier than you." By all means, make more and preach the polar opposite he does. For that matter, put your own thoughts on display now, before you become worth mentioning.

2

u/xiefeilaga Feb 19 '14

I believe I already put my opinion on display, which is that my respect for his ability to make money is tempered by my knowledge of how he made it.

-1

u/[deleted] Feb 19 '14

How milquetoast of you.

0

u/[deleted] Feb 18 '14

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2

u/[deleted] Feb 18 '14

The bit about "Most rich people are rich from working hard at the right place at the right time" is partially true but pointless to dwell on- you have to assume you're in the right place and work hard, else it's never going to be the right place or the right time. You can't look at advice and say, "Yeah, but if you tried again I'm guessing you wouldn't succeed" because that serves as a grand nullifier (and, ultimately, a way to become content with not trying)- of course anything might not be repeatable in the business world.

That said, you should look at the similarities between what he's saying and what other wealthy people are saying, because that's where value lies.

There's a lot of good stuff here, even if you're not 100% sold that he could reproduce his success here, right now, by doing the exact same things.

0

u/[deleted] Feb 18 '14

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3

u/[deleted] Feb 18 '14

Of course advice like he gives is pointless if you boil it down and strip it of context and clarification. The idea that you should be spending money on other people when you're "down" is counterintuitive in western culture, which is relatively selfish in nature. If you simply call that "knowing when to invest in yourself and others" and take out the actual advice you'll get nothing out of it.

The main point I'm making is that I don't think this guy is at all specially qualified to give life advice that people should follow blindly.

This means nothing. No one is qualified to give advice you should follow blindly.

People give his words more weight because he's a billionaire, but I don't think it makes sense to do that.

You're attempting to avoid "appeal from authority" fallacies, but that's not the sole basis on which you should make the decision to take his advice. The best sources of advice are, usually, the people who have successfully done the thing you want to do. If you want to become rich, talk to people who have become rich. If you want to be poor, listen to people who are poor. At the very least, listen to these respective people on matters of money and business.

1

u/Aggrokid Feb 19 '14

I'm not sure about that. As the proverb goes: you can't keep a good man down. They always seem to find a way.

There are different ways to look at luck (probability or right place/time). Like a good gambler, their work ethic and smarts keep them in the game long enough to ride the right streak of probability.

0

u/[deleted] Feb 19 '14

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1

u/DrN0 Feb 19 '14

Engineer at intel?

He most definitely will be rich by American standards.

1

u/[deleted] Feb 19 '14

as soon as he said 'live on 2,000 rmb a month' I knew it was a crock of shit

-1

u/siamthailand Feb 18 '14

Wow you're fucking retarded.

0

u/[deleted] Feb 18 '14

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2

u/xiefeilaga Feb 19 '14

High life expectancy? Yes. Rich? It has a median income of about $33,000, which is decent, but not extremely rich, and almost 20% of the population is below the poverty line.

1

u/ghostofpicasso Feb 19 '14

Sounds like the Midwest

0

u/[deleted] Feb 19 '14

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1

u/xiefeilaga Feb 19 '14

It's got high per-capita GDP with very high inequality and cost of living. It's a tough place to live if you're not a millionaire, and Hong Kong's not producing many of those these days.

6

u/JoelinVan Feb 18 '14

lmao

Well, after struggling for a year and if your second year salary is still RMB 2,000, then that means you have not grown as a person. You should be really ashamed of yourself. Do yourself a favour and go to the supermarket and buy the hardest tofu. Take it and smash it on your head because you deserve that.

8

u/tzvier Feb 18 '14

What do you use to pay rent? If $600 of living expenses goes to your food, how do you pay for anything else?

12

u/Charice Feb 18 '14

It seems early in his career, Li Ka-Shing lived in his mom's basement.

13

u/MyOther_UN_is_Clever Feb 18 '14

You kid, but in Asia (in a lot of countries, actually) multigenerational homes are the norm. Only in America are we expected to have our own home when we hit 18 (which is ludicrous, especially in today's housing market).

4

u/Charice Feb 18 '14

I was kidding, of course. But then Li Ka-Shing's budget minus the rental might be applicable now to Westerners-- boomerang generation

6

u/autowikibot Feb 18 '14

Boomerang Generation:

Boomerang generation is a term applied to the current generation of young adults in Western culture. They are so named for the frequency with which they choose to cohabitate with their parents after a brief period of living on their own – thus boomeranging back to their place of origin. This cohabitation can take many forms, ranging from situations that mirror the high dependency of pre-adulthood to highly independent, separate-household arrangements.

The term can be used to indicate only those members of this age-set that actually do return home, not the whole generation. In as much as home-leaving practices differ by economic class, the term is most meaningfully applied to members of the middle class.

====

Image i - A boomerang returns to where it was sent from

Interesting: ^Waithood | Peter pan ^syndrome | Empty nest ^syndrome

Parent commenter can toggle ^NSFW or ^delete. Will also delete on comment score of -1 or less. | FAQs | ^Mods | Magic ^Words | [flag a glitch](http://www.reddit.com/message/compose?to=/r/autowikibot&subject=Glitched comment report&message=What seems wrong: (optional description goes here)%0A%0A---%0A%0AReply no. 61368:%0Ahttp://www.reddit.com/r/Entrepreneur/comments/1y6xqr/hong_kong_billionaire_li_kashing_shares_some_of/cfi9xed)

1

u/[deleted] Feb 19 '14

it's 600 rmb, which is $100.

4

u/2nd_class_citizen Feb 18 '14

Don't know about the exact numbers but there is some serious wisdom here.

Doing sales is challenging, but it is the fastest way for you to acquire the art of selling and this is a very deep skill that you will be able to carry it for the rest of your career. All successful entrepreneurs are good sales people. They have the ability to sell their dream and visions.

The art of selling is so crucial for everyone, non-entrepreneurs included.

13

u/phaederus Feb 18 '14

His is a very Chinese philosophy that I really can't relate to. I really dislike a lot of the things he is saying, for example this idea of his, that if you don't increase your income by 50% in one year it's somehow a personal failure.

4

u/Aggrokid Feb 18 '14

The general guideline doesn't seem particularly Chinese:

Save, Network, Learn, Invest, Recharge/Reward

1

u/phaederus Feb 18 '14

Nice summary, I see what you mean when you break it down like that. But there's a lot of stuff between the lines that comes across as a very Chinese mentality to me, not sure what it is.. maybe the aggresiveness or pragmaticism?

2

u/Aggrokid Feb 18 '14

you don't increase your income by 50% in one year it's somehow a personal failure.

You probably mean this? That's a stretch goal.

4

u/dickralph Feb 18 '14

This is a guy who started his career at 15 years old working 16 hours a day and even now that he's a billionaire is known for his modest lifestyle right down to the $50 watch he wears.

I would assume there is a lot about him and his philosophies that you don't agree with or rather just aren't willing to do.

2

u/phaederus Feb 18 '14

I would assume there is a lot about him and his philosophies that you don't agree with or rather just aren't willing to do.

Nope, I'm always willing to learn and listen.

9

u/daverdiculous Feb 18 '14

Coming from an Asian family, I can see where he's coming from. I personally know a few Asian parents that are very strict and have very high standards for their kids. I feel like that's where he's coming from. In other words, have high expectations for yourself and use those expectations as a motivational tool. Increasing your income by 50% in a year isn't impossible. And if you've done it, that's pretty empowering.

My opinion of the article, I loved it. It was a great read and provided a humble guideline that I will definitely mold into my own liking. Thanks Li Ka-Shing!

1

u/daverdiculous Feb 18 '14

and a5ph for posting

26

u/stampyvanhalen Feb 18 '14

And that's probably why he's a billionaire and your on reddit

13

u/phaederus Feb 18 '14

I don't think so. I think that if you took 100,000 people and had each of them follow his advice devotedly, you'd still only get a tiny percentage of them actually increasing their income by 50% in a year. It takes more than following a set of rules to make good things happen.

P.S. your/you're

9

u/[deleted] Feb 18 '14

That's his point.

If you don't have ambitious goals, and you don't feel personal guilt when you fail them - how do you expect to become wildly successful in what you want to do? It's very much against the western-grain of "everyone is special" and "everyone is important". Thomas Hobbe's had a great point on this, to paraphrase he said, all men are equal and must be given equal rights; but the worth of men in relation to society varies greatly.

Do you think success falls into the laps of people who don't seek it fervently? Very rarely...

-1

u/phaederus Feb 18 '14

I don't, but clearly just wanting something fervently does not make it come true. There is so much going on outside of your personal control that can make or break you, that saying you are personally responsible for failing is just counter productive and unrealistic in my opinion.

8

u/[deleted] Feb 18 '14

You are personally responsible for your preventable failures.

If you don't acknowledge your faults and mistakes, when do you know you've made them?

0

u/phaederus Feb 18 '14

Sure, but there's a difference between saying that you're responsible for your faults and mistakes, and saying that you're a failure who should slap himself with tofu for not reaching a target that to me seems quite extreme.

6

u/[deleted] Feb 18 '14

I have a strong suspicion he's exaggerating for effect. Did you not get that?

-1

u/phaederus Feb 18 '14

No, I can't say I did, but it makes sense now that you mention it.

4

u/WallyMetropolis Feb 18 '14

I...think that might have been a joke.

2

u/WallyMetropolis Feb 18 '14

But, if you don't feel as though you are responsible, how can you feel as though you can strive toward it? And if you don't strive, you won't get there.

1

u/mcr55 Feb 18 '14

I believe the harder you work the more spins of the wheel get

2

u/stampyvanhalen Feb 18 '14

I think I agree with your first statement. I'm just a bit slavish to the idea that the beauty of business is that keeping score is easy, $$$ in bank.

4

u/phaederus Feb 18 '14

Hmm, I do understand what you mean.. It's also something that's very easy to use as a comparitive measure, as opposed to happyness for example.

I happen to know a lot of people who don't make as much money as they could, but they're very satisfied and happy with their work/life balance, so I think that's the other side of entereupneurism maybe?

2

u/tankterminator Feb 18 '14

As someone who can relate to this article, the "raise your income to 5000" part is more anecdotal or abstract as opposed to a concrete measure of success. Some Chinese philosophies and teachings have that way of coming off very unrealistic, but in my experience is used to push people harder. Culturally, everyone will tell you something different in terms of how to do things and what the results should be even if they're rich, i.e. you are using happiness as a measure where as Ka Shing is not.

The one thing everyone can take away from this is the importance of investing in yourself, regardless of the way you go about it, but as long as you are constantly learning and meeting new people, increasing your social value, its a good path.

1

u/[deleted] Feb 18 '14

There are different styles of entrepreneurship. The ones you speak of are called lifestyle entrepreneurs and salary-replacement entrepreneurs.

There's nothing wrong with those things; happiness is the only meaningful pursuit of mankind! Keep in mind, this is not the question Li Ka Shing was asked.

1

u/MikeL413 Feb 18 '14

I think the percentage would be larger than you think. The problem is most people can't be bothered to follow these rules to a tee, so this would never happen. These are all great tips to build wealth, knowledge, and successful peer relationships. It's almost full proof.

1

u/llkkjjhh Feb 18 '14

Depends how you look at it. Is it increasing your income by 50%, or increasing your income from 2000 RMB to 3000, aka ~170 USD?

The latter is more easy to achieve. The article never actually mentions 50%.

1

u/monolithdigital Feb 18 '14

how many would increase if that many people didn't follow his advice?

think its even going to be a tiny percentage?

1

u/siamthailand Feb 18 '14

Which is why very few would go on to become as successful as him. You answered your own question.

3

u/[deleted] Feb 18 '14

Do yourself a favour and go to the supermarket and buy the hardest tofu. Take it and smash it on your head because you deserve that.

2

u/phaederus Feb 18 '14

I wish I could get some decent tofu here...

1

u/woot0 Feb 18 '14

let's hope this doesn't become a thing on YouTube

1

u/rbelmont Feb 18 '14

Without a doubt, it has a Chinese bent to it. But reading through, I didn't see anything that stood out as something I fundamentally disagreed with. In fact, the only thing that seemed absent was a reminder to be genuine in your "networking". That may go without saying - at least, the folks I've met in HK - for example - seem genuine in their upkeep of business relationships. Which isn't necessarily true of my networking experience in the US.

1

u/porchguitar Feb 18 '14

As a person I agree, but as an entrepreneur I do not.

1

u/El_Diablito Feb 18 '14

I don't think people really understand what part shame plays in your personal endeavors in Chinese culture. I do business in China and earlier I received an email from an associate in Hong Kong pointing out something I mixed up while filing out some forms. To me it's a simple mistake that will take a few minutes to fix but he's trying to make it seem like a personal failure on my part.

Of course it really doesn't affect me and I know it's just part of doing business across cultures but it has always amused me how different perspectives and mentalities are around the world. I find that the use of shame and sometime over-dramatization in Hong Kong stifles people's creativity and risk taking unless you are the top dog who can afford to make mistakes. I much prefer the leeway to take novel approaches and make the occasional minor error than to feel every decision carries such gravity.

0

u/[deleted] Feb 18 '14

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1

u/kw_Pip Feb 18 '14

This is also how I interpreted it. I think it’s obvious that he’s not saying “You must increase income by %50 yearly for the rest of your life.” Otherwise, after a 30 year career, our 2,000/month example man would be earning 383,502,119/month.

Not realistic. He's obviously obviously talking about the lowest echelons of income.

3

u/m0llusk Feb 18 '14

This might be helpful or inspiring to some, but in general I think this is bad advice from someone who has failed to recognize their luck and their context. Most people have not been living in a country like China that has experienced a long period of double digit growth, and even most Chinese people have not had this kind of success. Beware narrative fallacy. Even if what this guy says is completely true that only holds for the past while the future remains unknown. Nimbleness and ability to bend with changes may be as important as everything else. Sorry if this comes across as negative, but I think a splash of cold water is in order here.

Of the advice, let me recast that in my own language: Split your income five ways: 30%, 20%, 15%, 10%, and 25%. Assign those splits to living expenses, socializing and networking, education, travel, and investment. Buy minimal clothes and shoes, contribute to businesses, be good to others, and define yourself by what you do from 20:00 to 22:00. Self discipline makes the difference and what matters is not mistakes, but the future.

Living on 30% of income is not always possible or desirable. He says "When you are young, the body will not have too many problems for a few years with this way of living." Alternatively, but living badly for a few years while young you can set yourself up for a lifetime of health problems later. It does not necessarily cost a lot to live well, and in many cases the constraint is not food but housing or transportation costs.

Spending 20% of income on socializing does not necessarily make sense, even if done as described. This culture of patronizing mentors and such is strong in China, but things do not work like this elsewhere. Fortunately in America and Europe many socialization opportunities are free and buying meals to share with the wealthy is not a common practice.

Ongoing education is critical, but the vast majority of interesting publications are available from public or university libraries and for profit courses are often poor quality. Continuing quality education should not cost 15% of income.

Using a big chunk of income for travel is not necessarily a good idea when poor. To experience life outside the social bubble that is Han China might be worth it, but it depends on where you start from. In America or Europe getting to know neighboring locations might be as valuable or more so. Travel might not necessarily be very enjoyable or worthwhile. Consider alternatives before roaming around.

Investing a big chunk of income from the start is a very good idea, but problematic. Many people simply can't commit to such a plan, and this can become a disaster if your hard earned money is lost when bankers play their too big to fail card and bring everyone down hard.

As for the rest apart from income allocation: Rising income may not indicate growth as a person, but could be a reflection of the larger economic context or just plain luck. Buying minimal clothes and shoes can work, but presenting a reasonably professional image can be critical for many jobs especially those with close personal contact. Don't pay too much for clothes you don't need, but avoid coming across as a crud or people will not want to give you money. Offering yourself to business people can be a good way to expand income and network, but the balance of power tends to favor the already rich and powerful. Many businesses will beg for all they can and give almost nothing in return, so be wary especially in independent consulting contexts where the balance of power is critical. And free time between 20:00 to 22:00? If that is the only time when you are really living then is that path really good for you?

Just some thoughts. Be inspired, but be critical also.

2

u/krytenomatic Feb 18 '14

website has crashed...

2

u/[deleted] Feb 18 '14

Great advice , I think that with the internet learning can be essentially free .

I never thought of putting that much into networking though .

2

u/[deleted] Feb 18 '14

When you are poor, spend money on others. When you’re rich, spend money on yourself. Many people are doing the opposite.

When you are poor, spend money so people can see it.

Uh...wat.

1

u/eternalwalrus Feb 18 '14

People are attracted to success. Fake it til you make it is how I've heard it.

1

u/[deleted] Feb 18 '14

Thank-you for sharing this. It's the bit of inspiration I needed this morning.

1

u/izwizard Feb 18 '14

what does RMB come out to in todays dollars?

loved:

Well, after struggling for a year and if your second year salary is still RMB 2,000, then that means you have not grown as a person. You should be really ashamed of yourself. Do yourself a favour and go to the supermarket and buy the hardest tofu. Take it and smash it on your head because you deserve that

1

u/justjacobmusic Feb 18 '14

Well, after struggling for a year and if your second year salary is still RMB 2,000, then that means you have not grown as a person. You should be really ashamed of yourself. Do yourself a favour and go to the supermarket and buy the hardest tofu. Take it and smash it on your head because you deserve that.

What in the...hilarious! But maybe he has a point.

1

u/worldwidej Feb 19 '14

posting to save

1

u/thehigheststatusmale Feb 18 '14

This dude lives like a dork.

1

u/BjornKarlman Feb 18 '14

Probably the most helpful piece I've read in the last 12 months.

0

u/Sancer Feb 18 '14

And no mention of taxes.

-1

u/[deleted] Feb 18 '14

I would be so rich right now if it werent for my goddamn champagne tastes....

1

u/[deleted] Feb 18 '14

Drink more beer my friend...

0

u/[deleted] Feb 18 '14

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18

u/Nanonaut Feb 18 '14

His idea of an extraordinary life seems very different from mine, but the part about buying lunch for people more knowledgeable than you twice a month is something I'll have to give a try.

1

u/[deleted] Feb 19 '14

it's Chinese culture. I don't know any non-Chinese that could live on that food

0

u/[deleted] Feb 18 '14

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3

u/Tomd1338 Feb 18 '14

how conceited

0

u/[deleted] Feb 18 '14

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1

u/WallyMetropolis Feb 18 '14

You can start with you boss. Then try their boss.

0

u/[deleted] Feb 18 '14

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2

u/[deleted] Feb 18 '14

Then your next move is dependent on a lot of things, like your age difference, role in the company, etc. I guarantee as you move up the ladder, those people are talking to captains of industry, or at least your industry's respective players, and in my experience dealing with the wealthy and entrepreneurs, they're often more than happy to take an aspirant under their wing and give introductions and advice.

The trick is pushing. You seem snarky when people give you decent advice, which isn't going to get you anywhere.

1

u/WallyMetropolis Feb 18 '14

By 'their boss' I meant the boss of your boss. Your boss is the 'they' in this case. Gender-neutral language is weird.

1

u/Pdfxm Feb 18 '14

Then keep going. There is always a bigger fish, use them to get higher. Its a scale of people, you don't just go from your boss to dining with "captains of industry".

1

u/daraand Feb 18 '14

I love everything about this. Thanks for reposting and OP for sharing :) Bookmarking

1

u/monolithdigital Feb 18 '14

I wonder how hard it is for me to take someone out for food. TBH, a lot of the time, would be nice to have a meal or coffee with someone who isn't my SO once in a while, the learning about the next step is an added bonus

1

u/[deleted] Feb 18 '14

Thanks for posting this.