Hong Kong’s richest man reveals secrets
Lessons include reading books and properly managing cash flow
Li Ka-shing, the world’s wealthiest 87-year old, has accumulated many lessons over the past seven decades as he built a plastic-flower maker into an $80-billion empire. Below is the advice the chairman of CK Hutchison Holdings Ltd. shared during an interview.
“Always be industrious and the virtuous welcome onerous duties.”
Li says the phrase, plucked out of the millenniums-old Confucian manual I Ching, or the “Book of Changes,” is his life motto. Simply put, it means one should work hard without sacrificing righteousness. Li works hard — given he works 16-17 hours a day, he’s said he’s effectively more than 100 years old. Li’s also a big philanthropist, estimating he’s given away a third of his assets to his charity to help build schools, hospitals and places of worship.
“Even if I don’t get enough sleep, I’ll spare an hour to read every evening.”
The son of a primary school
principal, Li quit school as a youth to escape Japanese invaders — but he never stopped reading. During wartime, he bought a collection of teaching manuals to learn because books were so cheap they were being sold as firewood. When he started out making plastics as a young man, he’ d religiously read a monthly U.S. trade publication called “Modern Plastics” to learn about the industry. Now he reads books related to his life and businesses.
“With artificial intelligence, there are so many things that can be automated.”
Li is among Asia’s top angel investors. He says he’s invested in nearly 60 companies in the field of new technologies and he’s always on the prowl for disrupters who could shake up industries or even the world. He invested in Facebook Inc., Siri before it was acquired by Apple Inc., and Spotify Ltd. Though he wouldn’t disclose what his next investments would be, he brought up artificial intelligence three times during the interview.
“I’m always very careful with my cash flow. That will ensure I have extra capital to get into another industry whenever I want to.”
Forget gross merchandise volume, return on equity or debt-to-equity ratios. The most important metric in business is cash flow, Li says. The tycoon says he’s been keeping an eye on cash flow since he became an entrepreneur more than six decades ago. One needs to generate good cash flow before expanding into other industries and to store up as insurance for a rainy day, he said. Rainy days are coming for Li, one of the U.K.’s biggest investors, after Britain voted to leave the European Union. Though Morgan Stanley cut its stock-investment rating on Li’s flagship CK Hutchison this week because of Brexit headwinds, the broker lauded the company’s ability to generate positive free cash flow across all its businesses.
Hong Kong’s chief executive “has to understand Hong Kong and have the ability to fill Hong Kong with hope.”
As Hong Kong’s wealthiest resident, Li has much at stake in the selection of the city’s chief executive in March. When Li was in the chief executive selection committee in 2012, he supported former Chief Secretary Henry Tang, who lost out to Leung Chun-ying. Leung went on to serve as chief executive during the student-led 2014 prodemocracy protests that paralyzed the city and his approval rating fell to a record in May. Though Li didn’t mention Leung in the interview, he said Hong Kong is in the worst shape he’s seen in the past 20 years.