18 Rules To Creating Long-Term Wealth

Billionaire Michael Lee-Chin’s 18 Rules To Creating Long-Term Wealth

Special to Financial Post | Daina Lawrence  Thu, October 10, 2024

Billionaire Michael Lee-Chin has 18 principles he has stuck to in order to build his wealth, he says.

The Jamaican-Canadian chairman and chief executive officer of Burlington, Ont.-based private investment firm Portland Holdings Inc., says it is possible for other investors to follow these principles and build wealth, especially younger ones who have time and compounding on their side.

With Warren Buffet as his role model since the 1970s, Lee-Chin has used his prescriptive framework to predict, and invest in, future trends, such as wealth management for a growing baby boomer cohort.

Lee-Chin came to Canada in 1970 and studied engineering on a scholarship, then graduate business studies, eventually becoming a financial advisor. In the 1980s, he borrowed money to invest first in Mackenzie Financial Corp., then in what became AIC Ltd. and set up financial services entity Berkshire group of companies, with billions of dollars in assets under management, selling to Manulife Financial in 2009.

Forbes pegged Lee-Chin’s wealth at $1.4 billion in 2023.

What follows is a condensed and edited interview with Lee-Chin, where he shares his investment rules, including the 3 Ps and the 3 Ts, and his predictions on sectors that address an aging baby boomer cohort, as well as world’s energy and carbon challenges.

FP: Is The Investment Environment Of Today Different To When You First Started Investing?

Michael Lee-Chin: It has always been complex.

When I first started as an advisor, I was looking around for a methodology that made sense to me, that I could practise consistently, and that really, if I adhered to the methodology, to the frameworks, the only outcome would be wealth.

A framework that has guided me throughout my life is if you want to be successful at any endeavour, this three-step formula will always work: 1. Identify a role model and choose the most eminent person in that field; 2. Get the recipe; 3. Don’t change the recipe.

Back in the late 70s to early 80s I identified Warren Buffett as my role model. Starting in 1982 I would attend his annual general meetings and I got the recipe.

It doesn’t matter what the investing environment is doing, all of those external factors in the long run mean nothing.

FP: What Advice Would You Have For Young Investors Today?

MLC: When you invest, you have to have some framework that guides you so that you have consistent behaviour. It’s not just arbitrary.

I’m going to tell you the eight characteristics of great investors — those that created their wealth (the first three are what we call the three Ps):

Predict: These people made a prediction about the future;

Plan: They planned for their prediction;

Persevere: They persevered with their plan;

These people also own a few high quality businesses;

They understand their businesses;

They ensure these businesses are in long-term growth industries;

They use other people’s money prudently;

They also hold on to these businesses for the long run.

Whether you’re a beginner, you manage a family office, you’re a professional investor — those eight characteristics are the essence of investing … and of creating wealth. Anything else is speculation.

This brings me to the ten qualities of high quality businesses. These are laws if you want to create wealth. This is our religion. This is our value system.

TO READ MORE:  https://www.yahoo.com/finance/news/billionaire-michael-lee-chin-18-110053318.html