Li Ka-Shing teaches you how to buy a car and house in five years.

When the richest Asia’s businessman with a net worth of $36.9 billion gives advice on how to progress in making money, it’s worth listening to him. Especially when he lays out a simple, manageable plan detailing how to achieve this.

Li Ka-Shing proposes to divide a monthly income of, say, $2000 into five five sets of funds: $600, $400, $300, $200 and $500. Sure, you can live well by spending the money as you wish, but if you want to earn more starting already from the next year, you’d better see what the wise man offers.

The first set of funds ($600) should be used to cover living expenses, including food. No luxury at this point, only simple, preferrably own-cooked, meals.

The second set of funds ($400) should be used to expand your interpersonal circle. These expenses cover phone bills, tickets and two-three lunches a month for friends. However, you have to remember that you must buy lunch for people who are more knowledgeable than you, richer than you or who have helped you in your career.

Make sure you invite such people every month because your expanding circle of friends will eventually generate tremendous value for you. It works for your reputation, speaks about your generosity and will soon show added value.

The third set of funds ($300) must be used to learn. Spend about $50-100 per month to buy books to read them carefully and to apply the strategies described there. You should also save up to $200 per month to attend a training course where you not only obtain necessary skills and knowledge, but also meet like-minded people with whom you share the same goals and interests.

The fourth set of funds ($200) should be saved monthly for overseas holidays at least once a year. An annual vacation abroad is not only a reward for your hard work but also a unique source of gaining varied experience. You can stay in youth hostels or camping sites to save costs, but you need to see the world to broaden your outlook. Use your travel experience to recharge yourself so that you have enough strength and inspiration to do your work during the year.

Finally, the fifth set of funds ($500) must be invested. As soon as you save a substantial sum of money in your bank account, you can use it as initial startup capital to do a small business. Small business is safe, you just need to go to wholesalers and look for products to sell. Even if you lose money, you will not lose too much, but your earnings will boost your confidence and courage and you will have a whole new learning experience of running a small business.

The more you will earn, the more you will be able to invest in longer-term investment plans. Don’t forget to obtain long-term security to protect your family in case things go temporarily wrong. You must always ensure that you have adequate funds for the quality of life not to decline.

So, what lies at the heart of Li Ka-Shing’s strategy?

He believes that if after struggling for a year your second year salary is still $2,000, then you have not grown as a person. Ideally, your income must increase alongside your learning and expanding friends’ circle – otherwise you have learnt nothing from all those books and courses.

Li Ka-Shing suggests that even if your monthly income increases to $3,000 you still have to work very hard. You must try to find a part-time job, maybe in sales as it is the fastest way for you to acquire the art of selling – the most important skill in your career.

All successful entrepreneurs are good sales people: they have the ability to sell their dreams and visions to the audience. Once you’re in sales, you will also learn what sells and what not and why. You will use this knowledge of market sentiments in your own business later.

As to savings, try to be thrifty and explain your business plans and financial goals to your family and friends. They are sure to support you in your efforts and dreams.

Keep in mind that by the second year, your income should increase to at least $3,000, or you won’t be able to keep up with inflation. And, again, if your earnings haven’t increased, it means that you haven’t done your homework properly and that you have gained nothing from your investment in yourself.

No matter how much you earn, always remember to divide your income into five parts proportionately. Increase your investment in networking all the time – when you increase your social investment and expand your network of contacts, your income tends to grow proportionately. Valuable connections and participation in very high-end training will lead to bigger projects, bigger opportunities.

Li Ka-Shing believes that investment in learning and wider experience will strengthen your self-confidence, while increased investment in holidays will expand your horizons.  In his view, increased investment in the future will ultimately increase your income. Maintain this balance and you will gradually begin to have a lot of surplus. Soon, you will be able to realise all your dreams: buy your own car and house, and prepare an education fund for your child’s future. This is a virtuous circle of life plans.

Life can be designed. Career can be planned. Happiness can be prepared. You should start planning now.

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