Li Ka-Shing Secret Formula to Wealth

Li Ka-Shing Secret Formula to Wealth

I was watching ANC “On the Money” for which I was featured almost two years ago and Li Ka-Shing’s formula in wealth accumulation was the featured topic of the show in a segment. Li Ka-Shing is the richest person in Asia and the 20th billionaire in the world with a net worth of USD 28.8 billion as of last year, according to Bloomberg Billionaire Index.

I am a fan of self-made millionaires and billionaires and their stories are truly inspiring to everyone who seeks financial independence. From humble beginnings to the challenges and struggles faced, to the hard work that were put in, all are simply a proof of determination to achieve success.

We have known the Pareto’s Principle of 80/20 of which when applied to savings, at least 20% of our income should be put into savings and eventually to investment before we spend the rest for our day-to-day expenses and monthly bills. That is paying yourself first.

However, Li Ka-Shing has a different strategy which is a secret formula that led him from a school drop-out to one of the wealthiest person in the world. The good news is that this strategy can also be applied to most of us. No matter how much you earn, divide your money in 5 different funds for 5 very different purposes.

Li Ka Shing quotes

30% – Living Expenses

Strict budgeting plays an important role in this. Eat simply. Prioritize your needs and lessen your wants. If you can, you can also downsize your needs. For minimum-wage earners, this is surely a big challenge. To keep within this formula, you may need to work harder to increase your income. Earn more and desire less.

Earn more by transferring to a higher-paying job or have a multiple sources of income. Desire less by strictly complying to a specified budget. Live way below your means.

20% – Expanding Network

As Jim Rohn said: “You are the average of the five people you spend the most time with.” Network yourself with people who are more knowledgeable, richer or people who have helped you in your career. Do a favor for them once in a while like treating them in lunch or dinner or work for them for free. The valuable lessons you will learn from them will serve as life’s lessons that will be useful in your self-improvement.

15% – Learning

Set aside also to improve yourself by buying and reading books and attending seminars. 5% of that should be allotted in buying books. Read them carefully, learn, and internalize the lessons and strategies thought. Materialize those lessons into your own actions and share them to others. The remaining 10% should be used to attend trainings and seminars. Aside from improving your skills, meeting people in these seminars are also part of the investment.

10% – Travel

Set aside 10% for travel at least once a year. Traveling need not to be expensive. Stay in simple hotels or dorm-type hostels to save costs. Look for airline promos and book early for cheap airline tickets at least three months ahead of your flight. Use those experiences to recharge yourself so that you’ll continually have passion in your work.

25% – Investing

Use it for investments like mutual funds, UITFs, bonds, stock market, real estate, etc. Remember that as you earn more, invest more so that you will not run out of money and quality of life will not drastically go down.

Continuous self-improvement is a vital recipe of one’s success. Li Ka-Shing said: “After struggling for years and your salary is the same, that means you have not grown as a person. You should be really ashamed of yourself. Do yourself a favor and go to the supermarket and buy the hardest tofu. Take it and smash it on your head because you deserve that!”

Once you achieved wealth, Li Ka Shing said: “When you are rich, stay at home more and less outside. Spend money on yourself. Don’t let people make use of you. Don’t show off. Just silently spend the money on yourself. Many people are doing the opposite.”

Tyrone is a passionate financial literacy advocate. He started this blog on November 2008 when he watched The Secret which talked about Law of Attraction because he wanted to become a millionaire and wanted to know how a millionaire acts. At the age of 26, he achieved his first million. To find out more about him, click here or follow him at Instagram

4 responses on “Li Ka-Shing Secret Formula to Wealth

  1. I must say one of the most interesting blogs I have come across. I have read the ways of saving, investing, et al. But I’ve never read anything related to so detailed in planning for entire life. For success, business networking or simply networking plays an important part in a successful man’s life. However, we hardly create any space, time, or even spend money on this. That’s where this article is unique. Thanks for the profound knowledge shared through this blog post.

  2. very inspiring and challenging at the same time. this is extreme but i think its really worth the effort and determination. thumbs up for this!

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