Highly recommended.
Autobiographical life story of an ethnically Chinese Indonesian banking and real estate billionaire, written at 87.
Autobiographical life story of an ethnically Chinese Indonesian banking and real estate billionaire, written at 87.
What did I learn?
1. Let's start with the controversial. If you think Jews run business in America, boy oh boy, do you gotta see how Chinese people run Indonesia. The entire book is about how every bank, business, real estate firm, etc. are run by Chinese immigrants from Fujian
1. Let's start with the controversial. If you think Jews run business in America, boy oh boy, do you gotta see how Chinese people run Indonesia. The entire book is about how every bank, business, real estate firm, etc. are run by Chinese immigrants from Fujian
2. While he never explicitly says it, Indonesia definitely seems like a crony capitalist country. Mochtar Riady, real name Li Wenzheng (all Chinese adopt Indonesian names there), at many times had the relatives of the rulers of Indonesia as shareholders and stuff like that.
3. I basically learned a lot about how banking works, it was kind of mind-blowing. If only 20% of deposited funds are withdrawn at any time, $100 in deposits means $80 worth of loans. If 50% of loaned money is withdrawn, and you require those $80 to be with your bank you can
further loan out an additional $40. This is not without irsk of course.
4. The defining characteristic of any bank is what he calls "credit" (which is kind of short for creditworthiness). Irrespective of the quality of its operations and its reserve capitals, rumors can kill a
4. The defining characteristic of any bank is what he calls "credit" (which is kind of short for creditworthiness). Irrespective of the quality of its operations and its reserve capitals, rumors can kill a
bank. Basically, if people think a bank doesn't have credit, they'll pull out their money and if everyone does that the bank dies, no matter what the bank does. Strange business!
5. Riady pulled off a super interesting pivot in or around 1998. Sick and tired of bank runs and with tons of foreclosed upon formerly collateralized real estate, he switches over to real estate development, saying that has less annoying regulations.
https://twitter.com/Molson_Hart/status/1312270281424211968
6. After he gets into real estate, he starts doing all manners of businesses (probably because after building these malls he needed to find tenants and Indonesia isn't full of operational capacity in various fields) like hospitals, hypermarkets, cinemas, shopping malls.
He places a lot of emphasis on finding a smart capable and well connected person to guide you through these new ventures, be it in a new industry or country. He calls this "to catch a horse you must ride a horse."
https://twitter.com/Molson_Hart/status/1310812288752988161
7. Back to banking. He talks about how wonderful it is for the US to have all oil transactions to be settled in USD. When China buys oil from Saudi, the transaction is settled in USD via US banks and the money deposited remains with a US institution. The bank can lend that money!
8. He has a really interesting life story, which starts out a bit weird and slow but really picks up steam as he gets older. Indonesia's roads are so bad that he runs a shipping business moving stuff from one part of the island over to Jakarta only to switch to banking because
basically, he thought it was cool. He does business in China, Hong Kong, and Singapore and ends up getting pretty close with some Arkansas i-banker named Jack Stephens. It's interesting.
9. One of the greatest things about this book, besides it being super readable, is that it was written at his age of 87, so you can see how his perspective changes and becomes more oriented towards family, love, and passing things on to the next generation. Powerful wisdom.
He implies that if you want to have a family firm you need to have a lot of kids because not all the kids will be suitable for the business (not everyone is talented or interested).
10. Finally, there's this weird dynamic throughout the book where it seems pretty clear that in
10. Finally, there's this weird dynamic throughout the book where it seems pretty clear that in
order for him to keep his status he needs to form a lot of public-private partnerships with the government. So he's building schools and hospitals and universities all over Indonesia. By the end of the book, there's a lot of implying that while Indonesia
en.wikipedia.org/wiki/May_1998_…
en.wikipedia.org/wiki/May_1998_…
is his home and he's attached to it, the future is Singapore and that's the spot to be.
Good book for people who don't know anything about banking, interested in chinese culture or Indonesia, or just anyone wanting to learn about an interesting and different man's life story!
Good book for people who don't know anything about banking, interested in chinese culture or Indonesia, or just anyone wanting to learn about an interesting and different man's life story!
11. He also converted to Christianity in his 50s and the story made me weirdly attracted to Jesus despite being raised without any religion. Book really picks up steam as it goes on.
@gsvigruha thoughts?
Forgot this and it’s super important. Throughout the entire book he emphasizes the importance of writing down and then analyzing workflows for waste. These four points are dense but powerful.
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