Li ka Shing's Secret of Manging and Wealth Accumulation

This is a condensed version of a article I read recently. It has wisdom that worth taking note.

"Li Ka Shing was born in a poor family in China. After half a century of hard work and struggle, he became a household name in the business community(a "Who's Who" in Forbes and Fortune Magazine). He attributes his extraordinary success, to hard work and diligence. But here he shares his secrets of managing and accumulating wealth.

Li Ka Shing believes that before a person reaches the age of 20, all his money should come from working hard using his own two hands. Between the age of 20 to 30 is the time to work hard earning money and simultaneously saving money. After the age of 30, the importance of investing and managing money is greatly increased. After middle age, how much you earn is less important; it is how to manage your money that becomes important.

The importance of continued patience - If a person can start saving HK$14,000 a year, and invest all the accumulation into stock and real estate investment, obtaining 20% average annual rate of return, after 40 years his wealth will accumulate to HK$102,810,000 and become a 100X millionaire(yi-wan-fu-weng). Many people who attend Li Ka Shing's talk comment, "If it takes 40 years to become a "yi-wan-fu-weng", it takes too long."

Li Ka Shing answers "Managing and accumulating wealth take a long time". You will not be able to see any results within a short time. Any person who wish to use any method of managing wealth to get-rich-quick, his wish is totally hopeless and destined to fail. Based on Li Ka Shing's method, after working hard for 10 years, a person can only accumulate enough to buy a car, very far from the objective of becoming a yi-wan-fu-weng. Therefore, a wealth-accumulator needs to realize that the activities of managing wealth is a "marathon run", not a "100 meter dash". What you need is stamina, and not explosive sprint. To invest, manage and accumulate wealth, you need a long period of waiting time to see the results.

At first it seems difficult, later it becomes easy. If a person can save HK$14,000 and obtain an average annual rate of return of 20%, after 20 years, the accumulated wealth is only HK$2,610,000- far behind the objective of HK$100 million.

Only after continuing the wealth accumulation plan for 40 years, can a person reach the platform of yi-wan-fu-weng, accumulating HK$102,810,000. In conclusion, Li Ka Shing also confesses that, "It's easier to earn the second 10 million than the first one million."