Have you wondered why “the rich get richer?”
Li Ka-Shing; a Hong Kong billionaire business magnate, investor, and philanthropist with a total networth of US$37.7 billion(July 2023) and is often referred to as Asia’s Warren Buffet. His vast knowledge and expertise have helped raise the next generation of entrepreneurs.
From starting a job at a plastic trading company to starting his plastic manufacturing to leading a real estate investment company in Hong Kong that was listed on the Hong Kong Stock Exchange in 1972.
Top 5 Reason the Rich Get Richer
With decades of business experience, Mr Li shares 5 important reasons why understanding capital is why the rich get richer.
1. Taking Calculated Risks While Raising Capital
Apart from his habit of dressing simply, Li Ka Shing has been an advocate for leading a simple lifestyle. He is well-known for sharing his advice on how to save enough money for a house and car within five years.
While money is important, Li emphasizes that raising capital is the true measure of an entrepreneur. Banks can only offer a limited amount of debt to businesses, so understanding how to raise capital through equity shares is far more advantageous.
Mr Li wouldn’t have become a billionaire without going public and attracting public investors. Mastering the art of securing funds from the capital market is a crucial step in the journey of entrepreneurship.
2. Acquisitions and Market Positioning
The fastest way to acquire talent and expand market positioning is through business acquisitions.
Li's acquisition of Hutchison Whampoa in 1979 illustrates how wealth facilitates further wealth generation. Li understood the importance of Hutchison Whampoa's diverse ports, telecommunications, and retail holdings which provided a broad platform to increase his wealth through strategic investments and market dominance.
The use of IPOs was able to help raise capital for Cheung Kong and later for CK Hutchison Holdings and CK Asset Holdings highlighting how public listings can significantly amplify wealth.
3. Finding A+ Talent
“In a small business — a family business you’ve got to do everything personally. But when the company is big, you need to give your staff a sense of belonging and make them feel at ease. That’s vital.”
“The secret of management is simply identifying and making use of talent. But you must in principle make them feel they belong and like you first.”
With only just 24 hours a day on our side, entrepreneurs need to be able to hire the best talent while incentivizing them to stay. Creating a sense of belonging is not just about financial incentives; it’s also about cultivating a supportive and inclusive work environment. This sense of belonging is often forged during challenging times, where mutual support and shared purpose become the glue that holds teams together.
By hiring different pools of talent, capital entrepreneurs would be able to spend more time raising capital. Employers must focus on recognizing and nurturing talent while also fostering a workplace culture where employees feel valued and part of something bigger than themselves. By doing so, companies can build a loyal, motivated workforce that drives sustained success.
4. Learning to Give Back
While generous, Li Ka-shing's extensive philanthropic efforts through the Li Ka Shing Foundation also reinforce his influence and legacy. Significant donations to education and healthcare provide social benefits and enhance his reputation and network, which can indirectly support his business interests.
To date, Mr Li Ka-shing has invested over HK$30 billion in projects covering education, medical services, charity and anti-poverty programmes, with about 80% of the projects in Mainland China and Hong Kong.
True entrepreneurship comes from a deep understanding of the capital market. His journey from modest beginnings to becoming one of the world's richest individuals showcases how initial capital, strategic investments, and the leveraging of public markets can create a self-reinforcing cycle of wealth accumulation.
5. Luck Has No Part to Play
“Today I can be frank. When I started my business, I almost certainly did not rely on luck. I relied on work, hard work and ability to make money.”
Believing that Li Ka Shing's personal items could bring them good fortune, some enthusiasts went all out to bid for his belongings at an auction, where all proceeds were donated to charity. Their admiration for him was not based on luck but on his remarkable ability to develop and grow businesses.
Every entrepreneur's success is directly tied to the amount of hard work they invest. As the saying goes, "Luck is what happens when preparation meets opportunity."
How to Be A Capital Entrepreneur
The rich get richer because they understand the importance of using OPM (Other People’s Money) and OPP (Other People’s Profit) to build wealth. Sadly, most entrepreneur only understand the pleasure of running a company but missing out the importance of raising capital.
At PIF Capital, we fast-track investors, SMEs, and business owners with the power to earn higher profits through IPO (initial public offering). With over 12,000+ SME community members, we help bridge other entrepreneurs together to form long-lasting relationships towards IPO.
If you are interested in understanding more about how to make your business sexy, bankable, and destructive, then be sure to reach out to us at PIF Capital and attend our weekly IPO3 event that's happening every Tuesday from 9am to 12pm.
Register to secure your seat via this link:
https://www.pifcapital.com/event/ipo3-english-11-june-2024-142/register
Whatsapp to 82227413 for further enquiries.