Li Ka-shing’s journey is one of the most compelling tales of rags-to-riches in the business world. Born in 1928 in Chaozhou, China, Li lost his father at a young age and had to drop out of school to work and support his family. By his early 30s, he had already founded Cheung Kong Industries which would go on to become one of Asia’s largest and most influential conglomerates.
Today, Li Ka-shing is widely considered to be one of the most successful self-made billionaires of all time, with a diversified investment portfolio that spans real estate, infrastructure, retail, technology, and energy. But beyond his business empire, his personal philosophy has timeless wisdom that can help any investor, whether you have $100 or $100 million.
In this post, we will examine some of Li Ka-shing’s most valuable investing advice and how you can apply them to your portfolio, based on his speeches, interviews, and actual business decisions.
Always Keep a Big Cash Buffer
“Above all, make sure that you always have liquidity.”
Li Ka-shing is known for his caution when it comes to liquidity. While most investors want to “put every dollar to work”, Li prefers to keep a significant amount of cash on hand at all times.
During market downturns, this gives his companies an opportunity to buy high-quality assets at a steep discount. For example, during the 2008 Global Financial Crisis, Li’s Cheung Kong and Hutchison Whampoa bought distressed assets from other firms that were scrambling to raise cash.
Retail investors can adopt a similar approach by:
- Always having at least 6–12 months of living expenses in cash or cash equivalents like short-term bonds or money market funds.
- Allocating a portion of your portfolio to liquid assets which you can put to work when the market dips.
Diversify Across Asset Classes and Geographies
Li Ka-shing’s investments are truly global, spanning over 50 countries in a range of industries from ports and telecommunications to retail and biotechnology. Diversification is key to his investment strategy.
He doesn’t put all his eggs in one basket, believing it’s far safer to spread risk across multiple sectors and geographies.
For retail investors, this means:
- Building a portfolio of diverse asset classes (stocks, bonds, REITs, private equity, etc.)
- Allocating investments across different countries and currencies
- Avoiding excessive concentration in a single industry, no matter how attractive it might seem
Think Decades, Not Weeks or Months
Li Ka-shing is the ultimate example of patient capital. Instead of trying to time the market or seeking speculative short-term gains, he prefers to invest in stable, income-generating assets and businesses that can compound over the long haul.
He once famously said:
“I invest for the long term, no less than five years, no more than 50.”
Take for example his acquisition of Hutchison Whampoa in 1979 which became the holding company for much of Li’s business empire. He held it for decades, earning returns from the long-term growth of its ports, energy, and telecommunications businesses.
As a retail investor, you can:
- Choose investments that you are willing to hold for at least 5–10 years or more.
- Don’t get spooked by short-term market fluctuations.
- Focus on companies with durable competitive advantages which can compound wealth over decades.
Never Stop Learning and Adapting
Li is well-known for his thirst for knowledge and humility despite his vast success. He continues to read voraciously, meet with young entrepreneurs, and explore opportunities in new industries well into his 80s and 90s.
In a 2022 interview, he said:
“The future belongs to those who prepare for it.”
For example, Li was an early investor in technology startups via his venture capital arm Horizons Ventures which has stakes in Facebook, Zoom, Spotify, Tesla, and Beyond Meat among others.
A retail investor can apply this by:
- Continuously educating themselves on current industry trends and emerging sectors.
- Be open to adapting their portfolio as new information and opportunities become available.
- Acknowledge that you never have all the answers and must always be willing to learn.
Relationships Are as Important as Money
Trust and integrity are key themes in many of Li’s speeches and interviews. He attributes much of his success to building long-standing relationships and partnerships with people he can trust.
He regularly counsels young entrepreneurs and investors to “guard your reputation like your eye,” because “a good name is better than a good contract.”
For retail investors, this may translate to:
- Working with reputable brokers, advisors and business partners.
- Networking can open doors to private investment opportunities not available to the general public.
- Avoid shady investment schemes and look for partners you can trust.
- Protecting your integrity and reputation compounds like money.
“Three Buckets” Rule For Personal Finances
Li has shared his personal philosophy for managing money which involves splitting it into three “buckets”:
- Daily expenses – live modestly no matter how much you earn.
- Investment fund – this is the money you put to work in the market to build your wealth.
- Learning fund – spend on building your own skills and knowledge.
Li’s personal financial discipline of living below his means is the foundation of his investing success. He still lives simply and avoids ostentatious displays of wealth even as a billionaire.
Invest in Education and Knowledge
Invest in yourself, your family, and your community through education.
Li has donated billions to education, medical research, and social causes over his lifetime. He views wealth as a privilege and responsibility and giving back is essential to both society and one’s own sense of fulfillment.
Retail investors can give back in similar ways by:
- Philanthropy: Support causes you believe in.
- Community investing: Use your investment gains to improve your local community.
- Legacy: Think about what you want your wealth to accomplish in the long-term.
Final Thoughts: Li Ka-shing’s Lasting Investing Advice
Li Ka-shing’s wealth is the result of his deal-making prowess, yes, but also his discipline, patience, integrity, and long-term focus. His most valuable lessons remind us that building and preserving wealth is as much about managing risk and our own behavior as it is about finding the right investment opportunities.
If you are a retail investor with the goal of building long-term wealth:
- Keep some cash on hand for opportunities.
- Diversify across industries and countries.
- Be thinking in decades, not days or weeks.
- Never stop learning.
- Guard your reputation.
In a world obsessed with the next big stock, Li Ka-shing’s advice is a classic example of wealth begetting more wealth by acting wisely and thinking for the long-term.
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