By MAVERICK LIN
July 26, 2017
“Li Ka-Shing’s wisdom on money through his Five-Year Plan, is incredibly enlightening”
Li Ka-Shing is one of Asia’s richest people and the 18th richest person in the world, and he has an incredible rags-to-riches story. He was forced to drop out of school as a child to support his family.
Li Ka-Shing’s wisdom on money through his Five-Year Plan, is incredibly enlightening:
Divide your monthly income into five sets of funds. Roughly into 30%, 20%, 15%, 10%, and 25%.
30% 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.
20% 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 that 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.
15% 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 offer. 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
10% 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 those experiences to continually recharge yourself- sharpening the saw, so to speak.
25% 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 businesses 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.
Even if your monthly income increases, you must still continue to grind. You should try to find a part-time job- preferably in sales.
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.
Even go as far as to trying to help out other 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.
So basically: 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 abundant 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 children’s future.