If you look at the world’s billionaire names – you will see people from around the world and all of them likely have or should have a book about them. To earn a billion dollars is a major accomplishment and makes an interesting story. One of the billionaires on the list is Li Ka-shing whose made his first billion in Hong Kong and now makes it around the world, A book about Li Ka-shing was written by Anthony B. Chan, Macmillian Canada, 1996

A lesson to be learned from Li is about debt. When Li first went into business he made plastic flowers (the type you see in the dollar store), when he received a large order it was time to move to a larger premise. Li did not like debt and moving allowed him not to be a tenant but an owner. Over time the value of the property went up and Li started doing real estate where he found his niche and soon was making more money in real estate than producing plastic flowers. In time emerging as one of the largest real estate players in Hong Kong, Li began to diversify for as everyone knows property values go up and down. Li needed something else with consistent cash flows, this lead to buying an electric company – Hong Kong Electric. The reason why he could buy the company was the previous owner was in large debt burden and had to sell. Li had done his homework and was ready to buy when the opportunity came along.

Linking to dividend paying stocks – in both business and personal lives debt can be your best friend and worst enemy. Debt can be friendly to help you buy your property, but take on too much debt or property values fall, those nice institutions which lent you money will only want their money back. If you own dividend paying stocks which has a consistent cash flow when others get into debt, you can purchase assets at a reduced cost. If you have a long term outlook for the assets, the assets will tend to rise in the future and you will be wealthier. To do such a thing means you have to do your homework first and be prepared to take advantage of the ebbs and flows of the market.

There are more questions than answers, till the next time – to raising questions