A Sure Way to Get Wealthy

I recently visited a good college friend in Thailand.  It was great to catch up with him, as I had not seen him for a few years.

My friend grew up in a small city called Phatthalung in southern Thailand, not too far away from Malaysia.  He was very nice to show me around the city, and we hiked at some of the cave temples nearby.  We also had a chance to visit his parents' store.  His parents run their own business, which distributes bedding products as an exclusive regional wholesaler for one of the largest bedding sheet companies in Thailand.

I could immediately tell this was a very well-managed business.  His parents' store is really a warehouse with various bedding product inventories.  I have some experience of doing on-site visits of companies and factories for my work as an investor.  My friend's parents' warehouse is not very big, as it is a local business.  Comparatively, the companies I visit for my work are usually large, publicly-traded companies.  However, I have never seen a warehouse or a factory this clean and organized.  You are not allowed to wear shoes inside the warehouse, and the employees mop the floor clean every morning.  The floor tiles were shinier than the ones at my hotel.  I did not see a single inventory lying around on the floor or misplaced.  The employees had smiles on their face and seemed genuinely happy.

What impressed me even more was the fact his parents owned so many properties throughout the Phatthalung town.  We drove through the town and my friend pointed me to some of the lands or buildings his parents owned.  They all seemed like great properties to me, as they were usually located at or near the center of the busy part of the town.  I could tell his parents were doing pretty well with their business, but I have to admit that I was surprised to see how much wealth his parents have accumulated because the relatively small size of the business did not seem big enough to justify the wealth.

My friend told me this advice his dad gave him:

"Always buy and never sell.  Don't use debt for buying.  You sell only when you have something better to buy and you are sure of it.  You will eventually build your wealth upon what you accumulate over the years."

This simple advice must be a sure way to get wealthy.  In fact, all the really wealthy people I can think of have built their wealth by buying/investing in good assets and holding onto them for a long time.

This formula to wealth really gets me to focus on the long-term picture.  If I only buy and never sell, my investment holding period is really forever.  My main focus then is to invest in only durable, high-quality assets that I know will still be good assets many decades from today.

I am thankful to my friend and his parents for the wisdom.