The first time I went to a Shangri-La Hotel was in 2007.
At the time, I was living in Shanghai. I first visited China in 1998, but because I was convinced China would become the superpower of the 21st century, I went back after finishing high school to study Mandarin.
I spent a year in China – one of the best of my life (I liked it so much in fact, that I moved back to Asia in 2011).
While I lived in Shanghai, I would receive occasional visits from my father – who was doing business in the region.
The first time he visited, we went for dinner in the hotel he was staying at – the Shangri La.
Now, before my time in China, I had been lucky to already have traveled the world extensively – and stayed in some of the best hotels.
But the Shangri-La was something else. Its flagship restaurant, the Yi Café, was like Disneyland for food lovers. It was a buffet with some of the best foods from around the world.
There was the sushi buffet – and it was good. There was Peking duck, homemade Italian, lobster and even a real steakhouse buffet. Hell, there was even a candy buffet – where you could pack dozens of different candies in a box and take them home with you (my fridge was filled these boxes for weeks after).
I had never seen anything like it in my life. The entire hotel was marvelous, the decoration was outstanding, and the service was second to none.
I’m telling you this because, during the confinement we’ve been in over the last month, I had to chance to devour the autobiography of Robert Kuok, the wealthiest man in Malaysia – founder and owner of the Shangri-La hotel chain.
His life story is fascinating. In the 1970s, Robert Kuok was a successful commodities trader based in Singapore. He was making tens of millions of dollars per year – which back then, was even more money than it is today.
He was so successful trading sugar that he became known as The Sugar King.
But as he recounts it himself, the commodities business is highly volatile and very risky. He would place large bets on the direction of commodities prices, and if he got any of them too wrong – he could be wiped out, bankrupt.
In his own words… “There is no joy in getting too big in commodities trading. If you reach too high, you are in danger of going bust. I am reminded of the previous Sugar King... he got it badly wrong in the volatile year of 1963 – and it left him penniless.”
With that in mind, Robert Kuok sought a way to diversify out of the risky commodities business and into something more stable, with long-term cash-flow.
That’s how he got into the hotel business.
As a way to diversify his wealth away from his first venture, Robert Kuok built the Shangri-La Group of hotels.
He ultimately ended up building dozens of hotels in Malaysia, Singapore, Hong Kong China, and today, the Shangri-La group of hotels owns over 100 hotels on all continents.
In 2018, the group earned $1 billion in profit.
Robert Kuok went much further in diversifying his wealth. Today, his $13 billion net worth is divided among a laundry list of businesses from ports, to oil, agriculture, publishing, freight and many more.
But the underlying principle of Robert’s move into hotels is the cornerstone of what we teach at Beyond Entrepreneurs: taking part of what you earn in your primary business and investing it into more stable businesses that produce cash flow.
Robert Kuok understood the importance of doing this, and today, his other ventures bring in billions of dollars in free cash flow for him, every year.
Not diversifying their wealth is one of the primary reasons so many entrepreneurs go bankrupt – or are left with nothing if their ventures fail.
The reality is that if you are an entrepreneur, you will fail sometimes.
So many entrepreneurs refuse to entertain the idea that their businesses won’t work. But failure is part of success if you can learn from it – and it’s nothing to fear.
The key, however, is to make sure the failures don’t hit you so hard you can’t get back up again.
When you invest everything you have (and borrow even more) into just one venture or idea, you’re making yourself massively vulnerable to financial ruin.
Billionaire entrepreneurs like Robert Kuok know this.
Instead, by making calculated investments using a portion of your wealth, and then scaling up your businesses with retained earnings or outside capital – you can create long-term, sustainable, indestructible wealth.
And that’s what we want for you.
Tomorrow you'll receive a free blueprint we put together to help you thrive and prosper during these difficult times. We hope you find it valuable.
Happy Easter everyone.
PS: If you enjoy biographies, Robert Kuok’s is one of the best I have ever read. He’s a notoriously private man, and this is a fascinating look into his world and way of thinking. And if you can’t get the Peking duck out of your imagination, here’s a snippet of the Yi Café.