The Ultimate Guide to Wealth Management: Earning Money Requires a Goal#
Money is merely a means; improving the quality of life is the ultimate goal. Success is getting what you want, then enjoying what you have.
Don’t Be a Miser#
A miser sold all his possessions, deposited the money in a bank, and took great satisfaction in calculating his daily interest earnings. His unscrupulous son, noticing his father’s secretive behavior, discovered the large bank deposit. He stole the passbook and seal, withdrew all the money, and replaced the original with a forgery. The miser, unaware of the deception, continued to calculate his imaginary wealth and interest.
Not Spending Money Is Like Having No Money
Months later, a sudden urge led the miser to the bank, where he discovered his account was empty. Devastated, he returned home, where his son consoled him: “Don’t be so upset. Just pretend the passbook is real. It serves the same purpose. You can still calculate your wealth daily. Money sitting unused in a bank is the same as having no money.” This parable satirizes the miser to emphasize the true meaning of wealth. Hoarding money without utilizing it is no different from having none. Wealth, in any form, has no inherent meaning. Its value comes from what we ascribe to it and how we use it to live the life we want.
“My philosophy is to live a simple life, be humble, and what significance does money hold for me?” Li Ka-shing, despite his immense wealth, focuses on making more money and training his successors – his two sons, Victor and Richard.
Wealthy Taiwanese tycoons seem to follow a similar pattern, leaving all their wealth to the next generation, even surpassing Li Ka-shing in their simple lifestyles. Tsai Wan-lin, once Taiwan’s richest man, drove a Yulon car and ate nutritionally balanced but bland meals prepared by doctors. Even in his 70s, he went to work every day, saying, “The thought of paying NT$20 million in salaries every day compels me to come to the office.”
Taiwan has many such “miserly” tycoons. Wang Yung-ching, the founder of Formosa Plastics Group, was known for his frugality, even combining leftover soap scraps. He said, “Food needs only to be nutritious, not necessarily luxurious. Simple meals are good. Constant luxury makes one forget what happiness is.”
“I can live like an emperor or a commoner,” said Huang Shih-hui, chairman of the Chinfon Group and a consistent top taxpayer in Taiwan. “Even if I lost a third, or even half of my wealth, I could still live well.” Ranked Taiwan’s sixth richest man by Fortune magazine, Huang ate NT$50 lunches and drove an ordinary car. He said, “How much can I wear? How much can I eat? Excessive desire will kill you!” For these wealthy individuals, the meaning of earning so much lies in the sense of accomplishment, not enjoyment.
Be the Master of Your Money
If you don’t master your money, your money will master you.
If asked, “What’s the next step after earning money?” most people would instinctively answer, “Spending it!” They’re wrong. Those who answer this way usually haven’t earned much. Most self-made millionaires continue to earn after becoming wealthy.
Some might say, “It’s foolish to have money and not spend it!” True, but such misers are not uncommon. Studies show that at least 90% of people continue to accumulate wealth, becoming slaves to money.
By now, you should realize that achieving financial wealth is relatively easy. Avoid keeping all your money in the bank, invest most of it in stocks or real estate, and be patient. However, teaching you to become a billionaire only to become a miserly hoarder is not my intention. Therefore, it’s crucial to discuss the meaning of wealth and the reasons for pursuing it.
Undeniably, with today’s opportunities and living standards, hard work can ensure a comfortable life. This book demonstrates that with proper financial management, wealth is attainable. However, without prior reflection on the meaning of wealth, you may become complacent, give up, or, even worse, become wealthy but not know how to use your money. This benefits no one. Before embarking on the path to riches, ask yourself what wealth means to you, then determine the steps to achieve it.
1. Don’t be a miser. Learn to spend wisely after earning. 2. Before pursuing wealth, understand your values regarding it.
Money, a double-edged sword, has corrupted countless souls throughout history. Poverty, a solitary grave, has buried countless heroes and talents.
Why Earn So Much?#
Everyone desires wealth. Isn’t that why you bought and are reading this book? Yet, not everyone prioritizes wealth. We often hear sentiments like: “You can’t take it with you,” “Wealth is fleeting,” or “One can only eat three meals a day, wear one outfit, and one pair of shoes. Why earn so much?”
If you say, “Why bother with financial management if you don’t want wealth?” I have nothing more to say. This book is explicitly for those seeking financial independence and wealth.
The desire for wealth is a personal choice, determined by one’s values and perspective on money. Some see it as a tool, content with enough to meet their needs; others view it as the root of all evil, associating the pursuit of wealth with something ignoble. Undeniably, the single-minded pursuit of money is wrong. Life offers many other valuable pursuits: health, knowledge, family, love, friendship – all precious.
Money isn’t everything. We often hear, “If money can solve it, it’s a simple problem.” While not the most important thing in life, its importance is undeniable. As the saying goes, “Money isn’t everything, but without it, you can do nothing.” A good life requires money, as does education, a higher quality of life, improving family life, and even philanthropy. The New England Journal of Medicine points out that the wealthy live longer, healthier lives than the poor.
Many aspire to a happy life and giving back to society. Both require money. Thus, money is a necessary means to achieve life goals. You can disdain money, but you can’t deny its utility in today’s society.
One’s status and worth are often judged by wealth. It’s unfair, but true. Despite the absence of social classes, money divides people into “rich” and “poor.” Greater wealth translates to greater ability to acquire desired possessions, status, and lifestyles.
Money undoubtedly buys the best healthcare, food, clothing, and housing. It provides security and freedom from fear, improving the quality of life and making it more vibrant. The poor have limited options, while the rich enjoy a wider range of experiences.
Money Can Ruin the Next Generation
The easiest way to ruin your children? Leave them a fortune. The saying “Wealth doesn’t last three generations” reflects this truth.
Many educators and I share a common experience: the most challenging students lack motivation, often stemming from wealthy backgrounds. These children, wanting for nothing, don’t understand the need for hard work or ambition.
I recall a case during my tenure as director of the Graduate Institute of Business Administration at Tunghai University. A student, admitted after fierce competition, struggled academically and seemed listless. During counseling, I inquired about learning difficulties.
His response: “My engineering background makes these courses easy. I don’t understand why I need to learn this.” I explained that business school teaches profit maximization. He replied, “What’s the point of making money?” Shocked, I learned that his family’s wealth had shielded him from financial concerns, leaving him without a drive to earn. I then emphasized the value of business management for future employment. His response: “My father owns a factory waiting for me, but I don’t want it.” He didn’t appreciate what he already had. I asked about his apparent preoccupation. Reluctantly, he confessed his biggest worry: “Why can humans kill animals, but not the other way around?” I truly didn’t understand the mindset of the wealthy’s offspring. It reminded me of the Taiwanese saying: “Some complain of hunger after a full meal.”
We should be grateful if our parents didn’t leave us a fortune that robbed us of our drive. This book shows how financial management can lead to wealth. However, I caution against leaving excessive wealth to your children.
Ideally, set a financial goal and stop actively pursuing wealth after reaching it. Avoid becoming a lifelong slave to money, and don’t ruin your children’s future.
Warren Buffett’s Perspective on Money
Billionaire Warren Buffett has arranged his estate to be managed by a trust controlled by wise individuals with absolute authority and no restrictions. He avoids preconditions, hoping to prevent it from becoming a bureaucratic, traditional fund. He said, “If they create a lofty palace and become conservative and closed-minded, my ghost will not let them rest.”
Buffett left his children $3 million each, and they now live happily as farmers. I admire his perspective: “True happiness isn’t living in a palace but adding a room to your house each year, because happiness is a process, not a result.”
Buffett’s estate planning is unique. As America’s richest man, his financial decisions draw attention. Some criticize his perceived stinginess towards philanthropy. He countered, “When I die, societal problems will remain. Society will benefit more from my wealth then than now.” He remains steadfast despite public opinion.
Buffett essentially ensures that his wealth, acquired from society, returns to it upon his death – a remarkably detached approach compared to many Eastern tycoons.
Acquiring wealth is difficult. Maintaining wealth is harder. Utilizing wealth is the hardest.
The Three Keys to Wealth Management: Earning, Managing, and Utilizing#
Wealth management comprises three levels: earning, managing, and utilizing money. Technically, earning is the hardest, followed by managing, then utilizing. However, my experience as a financial advisor suggests that teaching people how to earn is difficult, teaching them to manage is harder, and teaching them to utilize is the hardest.
Few Spend Wisely
Some challenge this: “Spending is easy! Give me your money, and I’ll spend it all quickly.” True, spending other people’s money is easy; spending your life’s earnings is not. Many wealthy individuals struggle to use their money meaningfully.
Many lifelong savers find it incredibly difficult to change their habits and spend appropriately, even after becoming wealthy. When asked, “What are you saving for?” they often reply, “I don’t know.”
Many people tirelessly pursue wealth without clarifying their goals. They blindly follow the mantra “Money is important.” No one takes their wealth to the grave. Many become so consumed with earning that they forget their initial purpose, mistaking the means for the end. They fail to use their wealth for greater happiness, joy, or societal good, becoming slaves to money. Their wealth becomes meaningless, bringing more harm than benefit.
1. Money is a means to achieve life goals. Don’t mistake the means for the end and blindly chase money. 2. Learn to utilize your money to become a truly happy and wealthy individual. 3. Save when young, manage wisely in middle age, and spend thoughtfully in old age.
The Wealth Journey of Chen Ding-chuan, Chairman of Everlight Chemical
“Before seeking wealth, cultivate the ability to manage money and control yourself.” Chen Ding-chuan believes that those who don’t understand how to use money become its slaves, losing themselves in the pursuit. Those who master the art of utilizing money become its masters, prioritizing self-growth and attracting wealth naturally.
Chen founded Everlight Chemical at 40, transforming it from a producer of basic dyes to a supplier of advanced specialty chemicals and pharmaceutical ingredients. By 1995, the company’s revenue reached over NT$2.4 billion. A devout Christian and former director of the International Foundation Taiwan, Chen holds a unique perspective on money. He believes earning is easy, but spending wisely is not. He’s witnessed countless wealthy individuals squander their fortunes and lose themselves, while others hoard their wealth, living like paupers and inflicting misery on those around them. He believes most people don’t understand how to use money.
Deeply religious, Chen dedicates himself to God and spreading the Gospel. Despite his success, he’s traveled a difficult path. He left school after elementary to work, studying diligently at night school for seven years, never missing a class except due to illness. While others took on extra jobs, he prioritized education, graduating with a degree in international trade at 35. Who would have predicted his future as a billionaire?
Who Paid the Highest Estate Tax?
“Who paid the highest estate tax in Taiwan’s history?” I often ask this during lectures. Few know the correct answer: Chen De-shen.
“Chen De-shen? Who is he?” Audiences always murmur after the reveal. It’s a shame that someone who paid nearly NT$2 billion in estate tax remains relatively unknown. How? The only explanation is that Chen mastered earning and managing money, but not utilizing it.
Chen died in 1991, leaving an estate valued at NT$10 billion, resulting in a record NT$1.9 billion estate tax bill. He lived a remarkably frugal life, using public transportation, sleeping on a cot, and living in his office to avoid buying a house. His sister recounted how he even refused to replace worn-out underwear.
Unmarried and childless, his vast fortune went to his siblings, sparking a highly publicized inheritance dispute. He exemplifies the saying, “Those enslaved by wealth are pitiable even in their riches.”
I often wonder, had he allocated a portion of his wealth to establish a “De-shen College” or “De-shen Hospital,” or donated even 1% (NT$100 million) to Tunghai University’s business school, his name would be remembered for generations. Such philanthropy would have benefited society and avoided family conflict.
Stanford University, a prestigious institution nestled between San Francisco and Silicon Valley, owes its existence to a generous donation from the Stanford family a century ago. What a profound and lasting impact! We marvel at the wisdom and foresight behind such giving.