Li Ka-Shing is one of Asia’s richest people and the 18th richest person in the world.
He has an incredible rags-to-riches story. He was forced to drop out of school as a child to support his family.
I really enjoyed Li Ka-Shing’s wisdom on money- his Five-Year Plan (Apologies in advance for the long read, but it’s sure as hell worth your time):
Whatever your monthly income is, divide it into five sets of funds. Roughly into 30%, 20%, 15%, 10%, and 25%.
First set of funds are for living expenses. Live simple. Eat a basic breakfast. Eat a basic lunch. Eat a basic dinner. While you are young, you are still strong and adaptable- your body will not suffer too much with a basic diet.
Second set of funds are for making friends and expanding your interpersonal circle. Budget your phone bill to a minimum. But every month, take 2 people out to lunch/dinner and pay for them. What kind of people? Those who are wiser than you, richer than you, or have helped you along in your career. Make sure you buy lunches/dinners for people who work harder and have bigger dreams than you. Do this every month and after a year and your circle of influence would have grown tremendously; it will pay dividends in the future. Your influence and reputation will spread.
Third set of funds is to learn. Every month spend some money to buy books. Since money is still scarce, you want to learn as much as you can. Whenever you buy a book, completely consume the lessons/strategies that the books offers. After finishing the book, make sure you try to teach someone else the lessons in your own words. Studies have shown that it helps you learn the lessons better. In addition, try to save up money to attend a training course- many successful people have attended training courses. For example, Warren Buffet once attended Dale Carnegie’s Public Speaking Course. Not only do you gain knowledge, but you also meet like-minded friends
Fourth set of funds are for traveling- especially overseas. Treat yourself to traveling at least once a year. Traveling will expose you to the world and increase your experience of life. After a few years, you would have been to many countries, met many different people, and underwent many different experiences. It will change your perspective on life and help you grow as a person. You have those experiences to continually recharge yourself – sharpening the saw, so to speak.
Fifth set of funds are for investing. Continually try to save money in your bank account. Use this money for initial startup capital- such as a small business. Small business are relatively safe since you won’t lose too much money: even if you lose money, you will not lose too much. However, when you do start earning money, it will boost your confidence/courage. After a few years, you can start saving for long-term security. It will be your war chest for bad times and will ensure stability in your quality of life.
After grinding for a year and your salary has not improved, well, you haven’t improved as a person and should be quite 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.”
Even if your monthly income increases, you must still continue to grind. You should try to find a part-time job- preferably in sales. Why? Sales is challenging, but it is a crucial skill to have for the rest of your life. You will have the ability to sell people your dreams, ideas, and visions. You will also connect with many people who will be extremely valuable to your life. You will also develop the sense of what sells and doesn’t, what might be a success and what won’t be.
Try to help out businesses – there are businessmen everywhere who need help. Put yourself out there and offer to do part-time gigs. This will not only help you hone your skills, but help you become more elegant.
Despite what your income is, always divide it into five parts proportionately. Always try to show your value and be useful. Expand your network. Increase your self-worth by investing in yourself. As you become more valuable, people will begin to notice and your income will rise as well. Always invest in learning, self-confidence, traveling, experiences, and your future.
After a few years, you should begin to have a surplus – a bigger war chest. Your body will begin to get stronger as you have better nutrition and care. You will have an abundance of friends and connections. You will have better training and have the opportunity for bigger projects and opportunities. Soon, you would be on your way to your dreams and have the surplus to buy your house, car, and education for your childrens’ future.
Advice on “The Art of Living”:
- There is a famous theory from Harvard: A person’s fate is decided by how he/she spends his/her free time between 10:00 PM to 12:00 AM. Use these two hours to learn, think, and participate in meaningful discussions. If you persist for several years, success will come knocking on your doors.
- There is nothing wrong with being young. You do not need to be afraid of being poor. You need to always invest in yourself – always increase your wisdom and stature. You need to be able to distinguish between what is important and worth investing in. You need to realize what is worth spending your money on. This is the essence of discipline. Try to avoid spending too much money of clothes. Try to eat out less.
- Don’t overspend on clothes, shoes, or material goods. You can buy as much of these as you’d like whenever you become rich. Save your money and buy gifts for your loved ones. Explain to them why you are thrifty and tell them about your goals, dreams, and plan.
- When you are poor, be good to others. Don’t count favors.
- When you are poor, spend money so that people can see it. When you are rich, do not show off. When you are poor, you must be generous. When you are rich, you must not be seen as a spendthrift. Your life has now has come full circle. This is the end goal. You will find peace at this stage.
- Once your livelihood is no longer an issue, use the remainder of your money to pursue your dreams. Spread your wings and dare to dream! Make sure you live an extraordinary life!
- Whatever happened in the past is in the past. Do not dwell on past mistakes. There’s no point crying over spilt milk. Everybody makes mistakes. It’s what you learn from the mistakes that counts. When you miss opportunities, don’t fret – not every opportunity is for you.
- The ability to smile when you are misunderstood is rare – a sign of a good upbringing. When you are wronged and you smile calmly, it is a sign of generosity. When someone has taken advantage of you and you smile, it is a sign of open-mindedness. When you are helpless and you smile, it is a sign of calmness. When you are looked down upon and you smile, it is a sign of confidence.
- Life can be designed. Careers can be planned. Happiness can be prepared. You should start planning now. When you are poor, spend less time at home and more time outside. When you are rich, do the exact opposite. When you are poor, spend money on others. When you’re rich, spend money on yourself.