Written by Mr. Huang Peiyuan from Taiwan, this book’s greatest strength lies in its departure from traditional thinking. It uses clear and easy-to-understand language to teach correct wealth management methods. The book outlines thirteen ironclad rules for effortless wealth management, guiding readers on how to establish a correct view of financial management. Many people strive to make money but don’t know how. Many possess the conditions for wealth but miss opportunities due to a lack of financial literacy. Even worse, some lose everything due to investment mistakes. The author draws on practical experience and extensive academic research, exploring these thirteen ironclad rules to help you “enjoy wealth management, achieve wealth with ease,” and confidently join the ranks of millionaires.
About the Author
Huang Peiyuan, Ph.D. in Business Administration from the University of California, Berkeley, General Manager of Sancai Construction and Real Estate Co., Ltd. Former Director of the Institute of Business Administration, Tunghai University, Deputy Director of the Project Business Department, China Development Trust Company, Vice President of East-West Securities, USA, Investment Manager at Merrill Lynch, USA, and financial advisor to numerous companies.
Learning Wealth Management from the Lien Chan Family#
The people of Taiwan are not only surprised by the enormous wealth of the Lien Chan family, the former chairman of the Kuomintang, but also harbor doubts. How could two generations of civil servants, with their meager salaries, accumulate wealth comparable to that of tycoon families?
This suspicion is deeply ingrained, but the Lien family is a prominent political family in Taiwan, and no one wants to antagonize them by probing too deeply.
As a journalist, the Lien family’s wealth has always been a puzzle to me. I even made a determined effort to uncover the truth, but to no avail. Six months ago, Professor Huang Peiyuan, then director of the Institute of Business Administration at Tunghai University, spoke about his desire to combine theory and practice and publish a “Personal Investment Bible.” After reading Professor Huang’s manuscript, the mystery of the Lien family’s wealth became clear to me. The Lien family is a perfect example of the principles in this “Personal Investment Bible.” Perhaps Lien Ya-tang, in his early years, wrote not only the renowned “General History of Taiwan,” but also a “Wealth Management Manual” passed down only within the family.
According to Professor Huang’s (his title at the time; now he is in business) “Personal Investment Bible,” the first rule is “Don’t keep your money in the bank.” The second is that if you want to get rich, invest in stocks and real estate. This gives you the opportunity, with the income of an average office worker, to become a multimillionaire after 40 years of wealth management.
By this standard, the Lien family is indeed the most faithful follower of the “Personal Investment Bible.” When they had little wealth, Lien’s mother (Lien Chan’s mother) invested solely in stocks and real estate. Over the past few decades, the Lien family remained steadfast, waiting for the appreciation of their stocks and real estate, which naturally led to the vast wealth that now arouses public suspicion.
Several decades ago, there were many business people who possessed similar wealth to the Lien family. These individuals also worked hard to manage their businesses and accumulate more wealth. However, compared to the Lien family now, most of them lament their inferiority in terms of wealth. The Lien family’s role as pure investors fully demonstrates that “as long as the concepts and methods are correct, wealth will naturally follow.”
In fact, the theories and methods in the “Personal Investment Bible” have been discussed by countless scholars and experts in mature Western societies, but not many have truly adhered to them and become millionaires as a result. The reason lies not in the inadequacy of the theories and methods, but in the lack of confidence and patience of those who apply them, leading them to give up halfway.
Therefore, I advise all readers of this book to truly believe in the theories presented, have long-term patience, and adhere to them unwaveringly in order to succeed.
We wish all readers the ability to enjoy a happy retirement with sufficient financial resources, which is perhaps the greatest contribution of the “Personal Investment Bible” to the public! (This article is written by the president of Business Weekly Taiwan)
The Joy of Wealth Management, Achieving Wealth with Ease#
When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is.
— Oscar Wilde, British playwright
This book is written for those who are determined to become wealthy and strive for financial independence. If you have tried every possible way to get rich and your home is filled with investment books, but you still can’t figure out how to achieve wealth in your lifetime, congratulations! You have found the book you need. The investment and financial management concepts and methods described in this book are absolutely understandable and achievable for everyone. As long as you put them into practice, becoming a millionaire is not difficult.
I see many people working tirelessly to make money, hoping to improve their own and their families’ financial situation, but they can’t find the right way. Many people clearly have the conditions to become rich through financial management, but they don’t know how to manage their finances, resulting in missed opportunities. Others know that investment and financial management can lead to wealth, but the problem is that what they know is not true, leading them astray and suffering from financial mismanagement. The author sees these phenomena and often feels sorry for them.
The biggest problem in Taiwan at present is the serious lack of financial education. The public lacks a correct concept of financial management. They either don’t know how to manage their finances and neglect it, or they use the wrong methods. As a result, some people not only fail to achieve wealth through financial management, but even fail to achieve basic financial independence. Insufficient or incorrect financial concepts are harmful not only to one’s own financial situation, but also to the public. This is the main motivation for the author to write this book, and what this book offers readers is the correct basic concept of investment and financial management.
As a scholar and a practitioner of financial management, I feel obligated to share my years of investment research results and practical experience in financial management with everyone, helping the public to easily manage their finances and achieve wealth through investment. The message this book wants to convey is: Financial management is actually very simple. Not only can everyone do it easily, but almost all young people have the conditions to achieve wealth through financial management.
This book is based on 20 years of practical financial management experience in the United States and Taiwan, 6 years of investment research at Tunghai University, and 15 years of experience as a financial advisor. In fact, the concepts and practices in this book were developed 3 years ago. For the past 3 years, the author has given lectures on this topic in various places and received tremendous feedback. Many listeners have continuously requested that I compile these concepts and action guidelines into a book. I personally also feel that these financial management concepts and action guidelines are indeed beneficial to the public and there is indeed a need to publish a book.
However, putting these concepts into words is a difficult task for me, so I have procrastinated for 3 years. Recently, thanks to the repeated urging of Mr. He, President of Business Weekly Cultural Enterprise, and Ms. Sun Meiqing, and the examples and suggestions provided by Ms. Shen Wenci, and especially the efforts of Mr. Yang Weikai, who spent several months helping me revise and proofread, this book has finally been completed. I express my sincere gratitude here.
If this book can be read by the general public, and if they can accept the concepts and financial management methods described in the book, then all the author’s efforts will have been truly worthwhile. Good ideas should be shared with everyone. I hope everyone can benefit from them and easily become millionaires through financial management.
Finally, I dedicate this book to my parents, Mr. Huang Minting and Ms. Huang Juzhi, who raised and nurtured me.
Preface#
In recent years, Taiwan’s economy has grown rapidly. While continuous economic growth is certainly gratifying, the problem of uneven wealth distribution has become increasingly serious. Some blame inappropriate government policies, while others believe it’s due to speculation, which has caused stock and housing prices to rise, widening the gap between rich and poor. The author believes that these factors are not the main cause. The real reason for the widening wealth gap is the significant disparity in financial literacy among the public.
Starting in 1986, Taiwan officially entered an era of abundant capital and a focus on wealth management. The New Taiwan dollar slowly appreciated from 40 to 27 against the US dollar, and during this period, a large amount of foreign exchange flowed into Taiwan, creating a situation where “money overflowed in Taiwan.”
Due to the excess capital, people began to shift their money towards investing in stocks and real estate. The huge influx of funds into the stock and housing markets caused stock and housing prices to soar. Between 1986 and 1989, housing prices increased by an average of two to four times, and the weighted stock market index rose from over 700 points in early 1986 to 12,680 points in February 1990, an increase of 18 times. Investing in stocks and participating in the capital market is inherently meaningful, and rising stock prices are a natural consequence of economic growth. Unfortunately, most investors adopted the wrong approach, believing that to profit in the stock market, they must buy low and sell high, earning the difference. In reality, short-term trading is not only time-consuming and laborious but also incurs huge transaction costs, resulting in most investors losing money. The stock market is almost equated with a casino.
The purpose of this book is to enlighten the public’s financial mindset by providing new perspectives, concepts, and methods to cope with the important yet complex investment environment. The author sincerely hopes that after reading this book, readers will develop a new financial mentality and adopt correct financial management methods.
“Getting rich” is almost everyone’s desire, and most people think that their monthly income is not much, and the amount they can save is even less. At this rate of wealth accumulation, it seems impossible to get rich. But in fact, with enough time and proper financial management, becoming a millionaire is not impossible. Wealth accumulation through financial management requires only three basic conditions: regular savings, the pursuit of high returns, and long-term waiting.
The easiest way to achieve wealth through financial management is to learn from those who have done so. What are their methods? The secret of most successful wealth managers is not that they are smarter, harder working, or luckier than others, but that they have the habits and practices of wealth creation.
In the past, family financial management was rarely mentioned in school education. Perhaps this is because investment and financial management involve money, and most people think that making money with money has a connotation of getting something for nothing. In formal school education, teachers avoid mentioning it, believing that talking about money in education may corrupt people’s minds, especially making money with money, which doesn’t seem noble. However, long-term avoidance of this issue has only exacerbated the problem.
The people of Taiwan, through years of joint efforts, have created an economic miracle and accumulated a large amount of wealth. However, most individuals and families only know how to make money but not how to manage it, let alone how to use it wisely. After acquiring wealth, individuals, families, and even the entire society have suffered rather than benefited. For example, in recent years, money games have been prevalent. Many people are busy speculating in stocks and real estate, and various forms of gambling such as the Mark Six lottery, futures, and foreign exchange margin trading are still popular and becoming increasingly rampant. Many people are obsessed with money games, all for the purpose of making money and improving their family’s financial situation. However, if we calmly review the investment results of the past few years, it is not difficult to find that in the end, few have profited, many have lost, and even more have gone bankrupt. Everyone has worked in vain, and the result is only a rapid redistribution of wealth and a prevalence of unhealthy speculation in society. The wealth of individuals and society as a whole does not increase. This is all due to the public’s lack of clear understanding of financial management concepts.
The consequence of poor financial literacy is not only personal loss and family misfortune but also a waste of overall social resources. Let’s face this issue that is crucial to individuals, families, and the entire society: family financial management.
As the saying goes, “When a couple is poor, everything is sad.” This shows that if a family’s financial situation cannot meet the needs of family life, or if finances are not managed properly, happiness is hard to come by. Of course, there are many factors that contribute to a happy family, and wealth is only one of them, as many family problems cannot be solved with money. There is a saying: “Money is not everything, but without money, you can do nothing.” Although money is not the center of a family, in our real society, most good things require money. Wealthy families are not necessarily happy, but families without money are usually even less so. To make ourselves and our families happier, investment and financial management are indeed imperative. Investment and financial management can not only improve the financial situation of an individual or a family, but it is also a good way to accumulate wealth. Using financial management to achieve wealth is achievable for everyone, and it is something everyone should do.
Future wealth depends on the future investment environment, and the biggest characteristic of the investment environment, in a word, is change. The entire financial environment is ever-changing and unpredictable. This has been true in the past and will be even more so in the future. In the world of investment and financial management, there is constant change. It can be said that “the only constant is change.” It is foreseeable that the changes in the next 10 years will exceed those of the previous 50 years. Changes are not only becoming faster, but also more complex, diversified, and international. Whether we like it or not, we are already in a rapidly changing environment.
Facing change, you can remain calm, adapt, and adopt the appropriate mental attitude. However, if you know how change will affect you, you may not dare to take it lightly. Because the natural consequence of any change is redistribution, including wealth, power, markets, personnel… In terms of wealth, any change in the investment environment will naturally affect the flow of money at all levels. Indeed, in financial markets, capital markets, commodity markets, spot or futures markets worldwide, billions of dollars are traded every day, and wealth is constantly being redistributed. Your wealth may increase significantly during the redistribution process, or it may shrink rapidly. After long-term redistribution, you may become a billionaire, or you may become penniless, depending on how you face and deal with the changes.
Any change and the resulting redistribution poses a “crisis” to your wealth to a greater or lesser extent. The Chinese characters for “crisis” are profound and often quoted in foreign books because they contain both danger and opportunity. “Wei” represents the threat to wealth, and “Ji” represents the opportunity for wealth creation.
We can wait for changes and redistribution to determine our future wealth level, or we can make good use of the opportunities brought about by change and try to reduce its destructive power. In this era of accelerating change, cultivating the ability to manage and respond to change is essential to controlling our own future.
Looking ahead, changes in business, economy, finance, politics, society, and other aspects will accelerate. The overall financial environment will become more complex and unpredictable, and it is foreseeable that future wealth redistribution will inevitably accelerate. Therefore, for ourselves, our families, and society, everyone should play the role of a financial manager.
This is an era of rapid change and abundant wealth, and it is also an era that forces us to manage our finances. Everyone desires to become rich and improve their living standards or achieve their life goals. There are many ways to get rich, but the concept the author wants to elaborate on in this book is: Investment and financial management is one of the effective methods to achieve wealth. As long as you have the correct financial management concepts and put them into practice, whether you are rich or poor now, over time, you may become a millionaire through investment and financial management.
In this critical era related to our future wealth, you can no longer remain indifferent to financial management or ignorant of investment. You must adopt the correct financial concepts as early as possible, constantly acquire new knowledge, and avoid mistakes in order to win in the process of wealth redistribution.
The Story of the Mailman Who Got Rich
My brother-in-law has a friend in Taichung, a middle-aged man with a dark complexion and an occasional shy smile. My first impression of him wasn’t memorable until he drove away in a new BMW. The second time we met, he arrived in a Mercedes-Benz, which made me admire him. I realized that appearances can be deceiving and quickly asked him what kind of big business he was in. He said he wasn’t a businessman, just an ordinary office worker. I pressed him further, asking which big company he worked for. He said he worked at the post office. I thought he must be a senior executive to be so prestigious and own two luxury cars. The answer, however, was surprising. He replied, “I’m a mailman. I deliver mail by motorcycle in the morning, with a monthly salary of NT$30,000-40,000.” I secretly speculated that he must specialize in delivering registered mail and was pocketing some of the contents. He then told me his story. His previous generation were poor farmers who left behind some land, which he had always regarded as ancestral property and kept without selling. No one expected that recent land consolidation would increase the value of his land by dozens of times. Now, just by renting out houses, he earns NT$500,000 in rent every month. This 48-year-old mailman didn’t rely on increasing income and reducing expenditure, but simply by putting his assets in the right place, he now has assets of more than NT$300 million. This is one of the examples of wealth accumulation through financial management in Taiwanese society.
Similar stories seem to happen frequently around us. Before I taught at the university, I worked for an investment company. Once, during the election of directors and supervisors at a shareholders’ meeting, I discovered that a major shareholder holding more than NT$200 million worth of shares was actually a clerk in the company’s personnel department. It turned out that 35 years ago, when she joined the company as an employee, her salary was very low and her life was insecure, so she saved her meager salary. When company employees had fractional shares to transfer, she would buy them. After many years, this woman in her 50s, although unremarkable and not looking like a rich woman, now has a net worth of more than NT$200 million, enough to enjoy her retirement. In fact, there are countless examples of such ordinary office workers who have become wealthy through investment and financial management. Many people say that office workers cannot become rich, but in reality, wealthy office workers mostly don’t like to show off, so the way to get rich through investment and financial management is often overlooked.
What Differentiates the Rich from the Poor?
Many hardworking office workers who toil daily for money have had the common experience of watching rich people in expensive clothes, living in luxurious villas, and driving by in luxury cars, looking impressive and enviable. While admiring them, you may have wondered: “What makes them rich, but not me?”
Many people attribute the wealth of these rich people directly to their being born rich, their successful entrepreneurial ventures, their being smarter, harder working, or luckier than others. However, family background, entrepreneurship, intelligence, hard work, and luck cannot explain all the reasons for wealth accumulation. We have all encountered many rich people, such as “nouveau riche” or “landowners.” They were not born into wealthy families, nor are they businessmen. They are not necessarily very smart, haven’t received much higher education, and are not more frugal than us. Some of them even idle around all day. The only thing they seem to be better at than you is that they are rich.
What special skills do these rich people possess that are lacking in those office workers who diligently save money and work hard every day? How can they accumulate such enormous wealth in their lifetime? This is the question the author has been eager to explore for many years. I have tried to explain their wealth with factors such as family background, entrepreneurship, occupation, education, IQ, and effort, but all seem to have failed. After years of observation, induction, and academic research, I have discovered a very important factor that is often overlooked by most people: the ability to invest and manage finances. At the same time, I have also discovered the following three facts:
1. One of the important factors that distinguishes the rich from the poor is: the ability to invest and manage finances.
2. Everyone can achieve wealth through investment and financial management.
3. The first thing to do to improve your financial situation is: to understand the basic concepts of investment and financial management. content_copy Use code with caution.