The ugly truth on how to become wealthy

“Asian Godfathers: Money and Power in Hong Kong and Southeast Asia” by Joe Studwell

What makes a billionaire? When I was a teenager I voraciously read endless business and personal finance books from ‘Rich Dad Poor Dad’ Series and ‘Think and Grow Rich’, to the psychology of millionaires, to the big-ass reference ‘Business: the ultimate resource’, while closely following Forbes billionaire list. I was obsessed on learning what they’re doing to earn a place in that list, read their biographies extensively and dreamt that someday somehow I too could make it into the list.

Among those on the list, at one hand there’s a group of billionaires that Donald Trump called “the lucky sperm club”, those who were born into an already wealthy dynasty like the billionaire children of Wall-Mart founder Sam Walton. On the other hand there are those extra ordinary people who build their businesses from their dorm room or garage like Bill Gates and Michael Dell, or stories of ordinary professionals that left their day job to build Coffee Republic and The Body Shop, among others, or those who started their business only after they got fired from their job like Michael Bloomberg.

And of course there’s the ultimate entrepreneur Richard Branson, who has built around 350 diverse companies under one brand name Virgin. Branson and others got me convinced that getting the right idea at the right time and place, combined with all the right entrepreneurial zest are the only recipe for success. But what these business books didn’t tell us is what the book ‘Fooled by Randomness’ describe as “survivorship bias”, where numerous failed attempts in the same narrow field by many other people are left unexposed, hence these stories only biased towards the survivors of the game.

That might partly explain why these billionaires are so extra ordinary. But what makes them really different from the rest of the herd? Given the same time, space, education and opportunity would anyone be as successful as them? Could anyone copy what these billionaires do in another countries? As I grew older the answer became clearer: not really.

And then reality check kicks in. As an Asian, watching the news about the “untouchable” moguls-turn-politicians and reading about the insanely rich conglomerates with a relatively unknown company(ies) before they became wealthy, are all just an everyday routine. It doesn’t add up, it doesn’t make sense. Until I read ‘Asian Godfathers.’

So what makes a billionaire? The book explains how far political and economic landscape of a country can be pushed to the limit, to play a highly significant factor in shaping a “friendly business environment”, though “friendly” is subject to whom enjoy it the most.

This is the ugly truth of most of the so-called Godfathers’ wealth in South East Asia. Most get a monopoly in certain business fields by their close and personal links in political power, some even get a position in politics, and it’s not uncommon for these Godfathers to pay for certain regulations to be designed for their huge benefit.

The book exquisitely describes the socio-political landscape of the South East Asian countries, through a detailed historical account. How these countries operate during colonial times, the political and economic structures during their independence and how it is gradually changed and shaped into the countries we know now, one regulation change at a time.

The book also briefly describes the socio-political landscape of Europe and the US for a relative comparison, which rings a bell to my ear with the book ‘Death of the Banker’ – the stories of the wealthy financial dynasties of the Morgans, the Rothschilds, and the like, who are wealthy beyond measure at their time – with a conclusion that they, just like the Asian Godfathers, also generate their wealth through their political and economic leverage.

In the end, having the right idea at the right time and place, with the right entrepreneurial zest are still crucially important. But the business environment in which we conduct business in plays a huge factor on becoming a billionaire, especially when the rules, regulations, taxes and tariffs are all in favour to boost your business and/or kill your competitions.

Read this book if you want to know the history of South East Asian countries in a more practical way, the complicated political stories, the ugly truth about its business environment and why these countries developed to become the way they are now. Simply impressive.