Sunday, October 27, 2013

Understanding the psychology, behavior & values of the rich & would-be rich

By Wilson Lee Flores

Understanding the psychology, behavior and values of the rich & would-be rich

I'd like to live as a poor man with lots of money.  --- Pablo Picasso

            The following is a condensed version of my two-hours speech at the 2nd Financial Advisors Congress on October 24, 2013 at the Carlos P. Romulo Auditorium, RCBC Plaza, Makati City:

Image below is from a mobile phone picture taken by Krisell Pedro and which she posted on Facebook, photo below showed the event host introducing me before my speech:

Almost everyone wants to be rich or daydream to be rich, but not all think, behave and act to be rich. I believe we are what we repeatedly think, what we repeatedly believe and  what we repeatedly dare to dream to become.

Differences between the rich and not rich, kinds of rich people

Novelist F. Scott Fitzgerald said: "Let me tell you about the very rich. They are different from you and me.” True! That is why we should all aspire to be rich.

Remember this---The world isn’t fair, life is not fair. In our Philippine society, if you are rich you are “petite”, but if poor you are “bansot”. If you are rich you have “scoliosis”, if poor you are “kuba”. If you are rich, you suffered a "nervous breakdown" due to "tension and stress", but if poor you are "sira ang ulo". If rich you are eccentric", if poor you are labelled as "may toyo sa ulo", "may topak" or "may sayad". If you are rich and not making good grades in school, you are described as a “slow learner”, but if poor you are “bobo” or “gunggong”!

For those who claim that “money cannot buy happiness”, the model Bo Derek once said: "Whoever said money can't buy happiness simply didn't know where to go shopping."

            Seriously, before I discuss the mindset, behavior and values of the rich, let me first define the different kinds of rich people. The late Enrique Zobel of the Ayala Group and Bank of the Philippine Islands in the 1970s era of student demonstrations, he said in a speech that he could categorize the rich in the Philippines then into three groups – the “profligate rich, the idle rich and the working rich”.

            In this speech, I am tackling only those who are in the “working rich” category, including those who are the investing rich, the entrepreneurial rich and also those people already on the way to becoming rich.

Whether as financial planners, wealth managers, insurance brokers, branch managers, private bankers, trust officers, securities brokers, investment solicitors, and other professionals who offer financial advice and sell financial products, plus me who is a business columnist, all of us are missionaries about the gospel of wealth.

Image below of Tao Zhugong, the first taipan 2,500 years ago, image sourced from

            Based on my extensive interviews and studies of the rich, including my personal experiences as an SME entrepreneur who started from scratch because our side of the family wasn’t given our share of the inheritance, here are some ideas on the rich and would-be rich:

  1. Focus on wellsprings or sources of cash flow, not just on assets--- Many people think that being rich is about owning lots of assets, I think it is better to own many wellsprings or sources of cash flow to be truly rich. This was a principle of my self-made paternal great-great-grandfather Dy Han Kia who became rich in 19th century Manila by establishing five lumber and furniture-making companies.

  1. Have an investing mindset. --- It is not enough to have huge incomes, what is key to wealth is to have an investing mindset. 
  1. A small fortune comes from frugality and hard work, a big fortune is from the heavens.---My late educator mother Mary Young Siu-Tin told me this old Chinese proverb. What it means for us is this: by sheer hard work and non-stop thrift, we can attain a minimum level of wealth in our lifetime.

  1. Smart people know how to utilize loan, or other people’s money, to grow wealth---My former Ateneo accounting class professor, the banker Maurice Lim said this to our class before and he is right. 

  1. Easy money is often easily lost.--- John Gokongwei, Jr. once told me this in passing, years ago before the rise of Napoles and her extravagant daughter. Moral lesson? Don’t go for short-cuts, don’t go for get-rich-quick schemes.

  1. Take care of your shinyong or creditworthiness---Pay loans on time, safeguard your integrity among bankers, creditors and your suppliers. Many of the rich flourished even without capital, their capital was their shinyong.

  1. Think of debt or loan as an obligation, not as a windfall or income. --- We shouldn’t also be addicted to too much and unnecessary debts. Mad magazine once said, which can apply to many of us too: “The only reason a great many American families don't own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments.”

  1. Do not be afraid of discomfort for yourself or your family members, this advice is true even for self-made entrepreneurs who are raising children thinking they don’t want the kids “to suffer like they did before”. Don’t forget: hardships, discomfort, injustices and struggles are part of the character-building process for many of the self-made rich people in the world.

  1. Take care of the small change, not just the big amounts. "A penny saved is a penny earned," said Benjamin Franklin.

  1. Do not gamble, except calculated risks in business. Nobody wins in gambling except the casinos. Do not follow example of my great-great-grandfather’s nephew and successor Dy Chau Si, nicknamed “Lau Ah-Si” who gambled and lost 18 commercial shops in one evening in 19th century Manila.

  1. Become rich by helping enrich others.--- “Never forget: the secret of creating riches for oneself is to create them for others,” said Sir John Templeton. We enrich ourselves if we can help enrich not only our clients, our business associates, investors and suppliers, but also our employees. China Bank has one of the best corporate slogans: “Your success is our business”

  1. Don’t forget the ability to demand payment or collect. --- Lucio Tan years ago told me this one principle from Tao Zhugong (722-476 BC), whose former name was Fan Li. He was a statesman who became a tycoon 2,500 years ago in ancient China through business and his wife Xi Shi was also one of the world’s most beautiful women. Generating a lot of sales is not enough or is nothing, if we do not collect well. Tao Zhugong’s 24 business principles are studied by many overseas Chinese entrepreneurs worldwide.

  1. Be fair to people in business dealings. Andrew Gotianun and his wife Mercedes Tan Gotianun of Filinvest Group and East West Bank told me this phrase, which they said has guided the way they do business for decades. I also learned this from my realty client before the late Jane Mallare, wife of ethnic Chinese lawyer and World News publisher Atty. Florencio Mallare.  

  1. Low profit margins and big sales volumes. --- This is an old Chinese business strategy, look at SM stores of Henry Sy family, the Cebu Pacific Air and the former Sun Cellular of John Gokongwei, Jr.

  1. Invest in people to reap riches --- “If you want one year of prosperity, grow grain. If you want ten years of prosperity, grow trees. If you want one hundred years of prosperity, grow people, ” said an old Chinese proverb.

  1. Be an iconoclast, think differently from the crowd---  “Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing,” said J. Paul Getty, who was named by the 1966 Guinness Book of Records as the world's richest private citizen, worth an estimated $1.2 billion (approximately $8.6 billion in 2012).  “Be fearful when others are greedy and greedy when others are fearful,” advised Warren Buffet, today the world’s richest investor.
Warren Buffet image below, sourced from

  1. Customer is king, customer service is important--- “Customers are jade; merchandise is grass,” said a Chinese proverb

  1. Riches and big companies start from small --- “The loftiest towers rise from the ground,” this is an old Chinese proverb quoted by pre-war Iloilo’s immigrant tycoon Pedro Marquez Lim to his grandson John L. Gokongwei, Jr. when the latter was a little boy walking in Calle Rosario (now Quintin Paredes Street), Binondo, Manila and marvelling at the buildings. Let us patiently build up riches from small beginnings and persevere.

  1. Delayed self-gratification is key to riches & success---Save and think for the long-term, if necessary, self-sacrifice for the future generations. The Hollywood actor Will Smith hit the bull’s eye, when he said: "Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like."

  1. Non-stop education is source of riches and success. Primacy of education is rooted in the moral teachings of the philosopher Confucius. I am not referring to just the act of collecting school diplomas, but of non-stop learning, reading, asking. Brian Tracy said: “Today the greatest single source of wealth is between your ears.”

  1. The goal is not money itself, but excellence, productivity and fulfilment. Money is only a scorecard.  Why do many of the so-called “working rich” keep on working still up to now, it is not about the money, it’s the thrill, the sense of adventure and fulfilment in creating and making the world a better place through one’s business and vocation. The great philosopher Confucius said: “Find a job you love and you’ll never work a day in your life.”

  1. Success is our birthright and destiny, we just have to struggle to claim it. Every crisis, failure or obstacles are only temporary setbacks or aberrations, because we’ll soon flourish! Don’t forget: The poorest man on earth is not the person without money, but those without a dream.

  1. Giving is real wealth--- Not only do I personally believe that being generous to others is the best way to spend and truly enjoy riches, I also believe generosity also brings us so much unexpected blessings and more wealth too.

Erich Fromm said: “Not he who has much is rich, but he who gives much.” The self-made tycoon Andrew Carnegie said: “Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.” I’m not religious, but the Bible also said in Acts 20: 35: “The Lord Jesus himself said: ‘It is more blessed to give than to receive.’ ”

Immigrant tycoon & philanthropist Andrew Carnegie, image below from


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