Sometime back, I stumbled across a young blogger who discuss about “Advice on Spending Your Money in Your 20s-30s”. What captivates me in the article is about how Li Ka Shing advises the splitting of our salary into 5 sets of funds.
For more details, also refer to yahoo news “Li Ka-Shing teaches you how to buy a car & house in 5 years.”
The general idea is to split your income into 5 sets of funds.
Assuming a monthly income of $2,000;
1st set: 30% ($600) - Living expenses. Eat simple but healthy.
2nd set: 20% ($400) - Expand social circle and build relationships. Buy lunch for people who are more knowledgeable, richer and who have helped you in your career.
3rd set: 15% ($300) - Continuous learning. Buy books and attend courses.
4th set: 10% ($200) - Use it for holiday overseas or leisure to recharge.
5th set: 25% ($500) - Save and invest to increase capital. Later can use for starting a small business.
LKS’s Ideology of Poor Vs Rich
“Life can be designed. Career 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, stay at home more and less outside. This is the art of living.
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, be good to others. Don’t be calculative. When you are rich, you must learn to let others be good to you. You have to learn to be good to yourself better.
When you are poor, you have to throw yourself out in the open and let people make good use of you. When you are rich, you have to conserve yourself well and don’t let people easily make use of you. These are the intricate ways of life that many people don’t understand.
When you are poor, spend money so that people can see it. When you are rich, do not show off. Just silently spend the money on yourself.
When you are poor, you must be generous. When you are rich, you must not be seen as a spendthrift. Your life would have come full circle and reach its basics. There will be tranquility at this stage.”
It is without a shadow of doubt that the advices of the 87 year old Hong Kong richest man are exquisite. While I agree with most of the points, I do not subscribe to it entirely. But maybe what he meant only apply to our career.
Li’s advices strike resemblance to the average lifestyles in Hong Kong and the current Chinese major cities, where the chasing of material wealth somewhat carries more weight than anything else in life for many.
Little was said on PASSION and LIFE in general! Moreover the opportunity cost of wealth creation is often time. Time for your family, friends, relatives, and more importantly for yourself also.
Lest we forget, money correlates with work life balance but does not directly create it.
You may have sensed by now, that while I admired LKS’s ability to build wealth and also contributed greatly to the society, I am not entirely a fan of him. Not to be mistaken, LKS is a great man, but he is just not my cup of tea who can inspire me.
Stay tuned to Part 2 on Rolf’s 5 sets of Priorities in Life.