8 Money Lessons We Can Learn from Chinese
Henry Sy, John Gokongwei Jr., Lucio Tan, Tony Tan Caktiong. These are names that you can see on Forbes’ The Top 50 Riches In the Philippines. These people came from the same decent — Chinese. How is it possible that the Chinese made so much fortune? What are their attitudes towards money? Here are 8 money lessons that we can learn from Chinese.
Save as much as you can
You’ve probably come across these advices from financial blogs: “pay yourself first” and “80-20 rule” wherein 20% should go to savings and the rest would go to expenses. But long before financial blogs harped on that topic, the Chinese have been practicing it and even saving a part of their income at a bigger percentage. Some would go as far as putting away 50% – 60% of what they earn because of the delayed gratification concept.
The Chinese way to save boils down to their long term vision. They know that they need to have an access to huge funds at one point although they don’t specifically know when. So they save up as much as possible even before their need arises.
Pay in cash
Credit cards are a rarity in China and most people pay in cash. Cash or straight payments have a high chance of getting discounts and the Chinese takes advantage of it. Then, those discounts they got from their suppliers will be passed on to their customers. Therefore, more customers mean more profits.
The classic Chinese text Dao De Jing states that the three greatest treasures that one can have in this world are love, frugality and generosity. It’s a concept that’s been taught for thousands of years. Frugality is really an integral part of Chinese culture.
Create multiple income streams
The Chinese know how to create multiple sources of income which is their key to earn more. Having more than one source of income means more savings and more savings mean more money to invest. The Chinese are realists. They know that business will not fare well all the time so as early as possible, they create another income stream that will bring more revenue for them.
Only have good debt
The Chinese people are wary in being in debt that’s why most of them are always paying in cash. However, that doesn’t mean that they do not have debt at all. What they have is a good debt or an investment that will grow in value or generate long-term income. A good debt is usually what they leverage when they need business expansion. Also, if Chinese people were to borrow money, they keep it to a minimum.
Haggling is a way of life.
It pays to know well if the real value of a certain object is higher or lower than the price indicated on the price tag. Also, practicing the art of fairly negotiating with a seller goes a long way. Combining these two is a must when buying things.
It’s healthy to talk about money
Discussing money under a positive light is a rarity among Filipinos. However, the odds are different in China. Most of the time, this is the Chinese way of getting to know another person. Once you speak to people and find out how much money they make, they will tell you more on how they live. In Chinese culture, it is never rude or bad to talk about money.
Cash gifts work best
Chinese children usually get cash gifts every Chinese New Year or birthdays which they end up saving. Ang Pao or red envelopes are the standard gift for any celebration and are also considered the best gifts because the receiver can do anything with the money.
Our financial situation is a reflection of our saving and spending habits. While it is great to learn through your own mistakes, getting wisdom about proper money handling from the Chinese also helps to achieve financial success and everyone should learn from them.