China Adding to $1 Trillion of U.S. Debt Caps Rise in Rates

By Susanne Walker and Wes Goodman

International buyers hold 90% of US notes and bonds

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March 7 (Bloomberg) -- Investors outside the U.S. have boosted their holdings of longer-maturity Treasuries to the highest level since the credit markets froze in 2008, helping curb rising yields amid concern inflation is accelerating.

International buyers held 90 percent of their $4.44 trillion of U.S. government debt in notes and bonds as of December, the same as in September 2008 when Lehman Brothers Holdings Inc. collapsed, Treasury data released last week show. The ratio fell to 83 percent in October 2009 as investors sought the safety of Treasury bills with the U.S. economic recovery still in question.

The shift toward long-term debt shows bond buyers outside the U.S. agree with Federal Reserve Chairman Ben S. Bernanke’s assessment that inflation will be contained even as global food and energy prices soar. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., warned last week that yields on Treasuries are too low with inflation accelerating and the central bank planning to complete $600 billion in asset purchases in June.

“Inflation in the U.S. isn’t a big problem,” said Zeal Yin, who buys Treasuries for Shin Kong Life Insurance Co. in Taipei, Taiwan’s second-largest life insurer with the equivalent of $50.6 billion in assets. Yin said he purchased U.S. government debt last week. “I’m bullish.”

Stocks Beat Bonds

The yield on the benchmark 3.625 percent note due February 2021 rose eight basis points, or 0.08 percentage point, to 3.49 percent last week, and climbed two basis points to 3.51 percent at 11 a.m. in New York, according to BGCantor Market Data.

Ten-year yields increased in each of the past six months, the longest stretch since the period ended June 2006, according to data compiled by Bloomberg. U.S. government securities have lost 0.4 percent this year, according to Bank of America Merrill Lynch’s U.S. Treasury Master index. The Standard & Poor’s 500 Index has climbed 5.1 percent during the same period as confidence in the economic recovery grows.

“We increased the portion of foreign-currency- denominated bonds, mainly Treasuries, because of the higher interest rates,” said Satoshi Okumoto, a general manager in Tokyo at Fukoku Mutual Life Insurance Co., which has the equivalent of $67.1 billion in assets. “When we need to increase our foreign-currency bonds significantly, the U.S. is the only place to put the money because of the liquidity.”

China’s Shift

The amount of marketable U.S. debt outstanding surpassed $9 trillion last month. Retaining demand from international buyers, who own half of the Treasury debt outstanding, is key to keeping borrowing costs from surging as the Obama administration seeks to finance cumulative budget deficits that the White House estimates will exceed $4 trillion through 2015.

Interest expense will rise to 3.1 percent of gross domestic product by 2016, from 1.3 percent in 2010, according to administration estimates. While yields on the benchmark 10-year note are up, they remain below the average of 4.13 percent over the past decade.

The Treasury will sell $66 billion of three-, 10- and 30-year securities over three days beginning tomorrow. Last month, indirect bidders, the class of buyers that includes foreign central banks, bought a record 71 percent, or $17 billion of the $24 billion in 10-year notes offered at the auction.

China, the largest investor in U.S. government debt after the Fed, increased longer-term notes and bonds by 39 percent to $1.145 trillion in December from a year earlier, while its stake in bills declined 78 percent to $15.4 billion, the most recent Treasury data show.

‘Extremely Supportive’

The nation bought more U.S. bonds even as its leaders criticized Bernanke’s plan for the Fed to buy $600 billion of Treasuries by June. Jesse Wang, executive vice president of China Investment Corp., the country’s $300 billion sovereign wealth fund, said Jan. 15 that devoting too much of its reserves to U.S. assets such as Treasuries was too risky.

“They remain extremely supportive for the Treasury market,” said Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch in New York, one of the 20 primary dealers that trade with the Fed.

Japan, the second largest holder of Treasury debt, increased its investment to a revised $882.3 billion, the highest ever, from $765.7 billion a year earlier.

Longer-term U.S. bonds offer the highest yields relative to short-maturity debt of any Group of Seven nation, data compiled by Bloomberg show.

Yield Curve

The yield curve showing the difference between rates on two- and 10-year notes was 2.81 percentage points, after reaching a near record 2.93 percentage points at the start of February. The gap in Germany is 1.51 percentage points, 2.23 in the U.K. and 1.06 in Japan.

The curve will narrow to 2.63 percentage points by year-end and to 2.26 points by mid-2012, based on the median estimate of more than 40 economists and strategists surveyed by Bloomberg.

Strategists say the expectations show investors see little chance of inflation accelerating anytime soon. Returns on 30-year Treasuries, the most vulnerable to rising consumer prices because they have the longest maturity, gained last month for the first time since August, returning 1.51 percent, compared with an average loss of 0.09 percent for all Treasuries, Bank of America Merrill Lynch indexes show.

“The yield curve dynamics will change dramatically” in the U.S. as the gap narrows, John Richards, head of North American Strategy at RBS Securities Inc., said at a forum in Tokyo on March 3. “I call this the beginning of the great compression of short-term and long-term rates.”

Inflation Experience

Oil costing more than $100 a barrel and record high food prices probably won’t cause a permanent increase in inflation and borrowing costs are likely to stay low, Bernanke said March 1 in his semi-annual monetary policy testimony before Congress.

Experience with such price gains in recent decades, along with currently stable labor costs, suggest a “temporary and relatively modest increase in U.S. consumer price inflation,” Bernanke said in Washington.

While the consumer-price index jumped 0.4 percent in January, the core measure, which excludes food and energy, rose 0.2 percent in January, in line with the average monthly gain of 0.16 percent over the past 10 years, figures from the Labor Department showed Feb. 17.

“Bernanke tends to think this doesn’t matter -- at least in terms of headline versus the core -- we do,” Gross said in a March 4 interview on “Bloomberg Surveillance” with Tom Keene.

Cutting Treasuries

Gross cut holdings of U.S. government and related debt in Pimco’s $237 billion Total Return Fund to 12 percent in January, the least in two years. He recommends higher-returning assets such as emerging- market debt and corporate bonds.

The difference in yields between 10-year notes and Treasury Inflation Protected Securities, or TIPS, was 2.50 percentage points on March 4, the highest since July 2008. The spread, which reflects the outlook among traders for consumer prices over the life of the bonds, averaged 2.43 points in the five years before the credit crisis.

“We would not be a buyer of Treasuries at these levels,” said Andy Richman, who oversees $10 billion as a director of fixed-income at SunTrust Bank’s Wealth and Investment Management in Palm Beach, Florida. “Inflation is becoming more of a problem than it has been. The truck of inflation moving down the road is getting closer and closer.”

Treasury yields have also risen on confidence that President Barack Obama’s $858 billion tax compromise in December and the Fed’s monetary policies have put the economy on a more stable path to recovery.

Job Gains

The U.S. added 192,000 jobs in February, a report from the Labor Department showed March 4, up from a revised 63,000 in January. Economists in a Bloomberg News survey had forecast the economy would add 196,000 jobs. The unemployment rate dropped to 8.9 percent, the lowest level since April 2009.

While Bernanke said inflation remains subdued in the U.S., European Central Bank President Jean-Claude Trichet said March 3 the ECB may raise interest rates next month for the first time in almost three years to fight mounting inflation pressures.

The European Union’s central bank boosted its inflation and growth forecasts, saying consumer price gains will average 2.3 percent this year, up from a December forecast of 1.8 percent and exceeding the ECB’s 2 percent limit.

--With assistance from Daniel Kruger in New York, Ronnie Harui in Singapore and 野沢茂樹 and Yumi Ikeda in Tokyo. Editors: Dave Liedtka, Robert Burgess

Recognise talent and help others to soar

Monday Starters - By Soo Ewe Jin


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A FRIEND recently retired from an organisation which he has headed for the past 14 years. I remember those early days when he decided to leave the corporate world to venture into social work.

It was not easy fitting in initially, as he tried to bring in some semblance of order in an environment where the staff worked with passion despite the low salaries and still considered it a bonus to get a “nice warm feeling” at the end of the year.

One of his “achievements”, for want of better word, was the fact that he had 14 PAs working for him during his tenure.

So the immediate reaction must be, “what a horrible boss he must be to have so many changes of PAs.”

The fact of the matter is that all these PAs were groomed and then released to take on different positions within the organisation. He recognised talent and was not afraid to let them go.

Which was why they had plenty of good things to say about him at the farewell party.

As I reflect on this story, it dawns on me that there are many people in the working world who are often stuck in routine jobs who never seem to get a chance to break out and soar to greater heights.

Sometimes they may not have the confidence to tell their immediate superiors about their abilities. Sometimes it may be because their superiors simply will not let them go for fear that they may outshine them.



In the movie What Women Want (its Chinese remake recently released, starring Gong Li and Andy Lau) we have Erin the file girl played by Judy Greer who basically walks around carrying files from one person to another. Despite her talent, and her desire to apply for some internal positions that will make full use of her abilities, she is basically ignored.

Does this sound familiar?

I am sure you would also know of someone who feels unfulfilled in his job and has the potential to do so much if he was only given the chance. Do you just brush the request aside or are you prepared to listen to his dreams and help him along?

Another friend works in a company where anyone who is appointed to a senior position must have his designated successor within three months. It is a good way to force the person to quickly identify the talents under him and realise that in the real world, no one is really indispensible. I reckon a healthy dose of humility is good for the corporate soul.

In one of my earlier articles for this column I wrote about how in the various places I have worked, I have grown to appreciate the fact that the silent office clerk could well be a Lat in the making. Or that the person much maligned at the workplace would be so well loved as an angel by friends and neighbours.

I know of many workers who give of their time and their talent to worthy causes although this is often not reflected in their company records.

Any CEO should be proud of such staff, for they truly are the real ambassadors of the company.

Maybe it is good for those of us who have some form of managerial positions to look around and see if we can play a small part in making some people's dreams come true. For when they soar like eagles, we can truly be part of the ride.

Deputy executive editor Soo Ewe Jin would like to quote leadership guru Max De Pree who says, “We need to give each other the space to grow, to be ourselves, to exercise our diversity. We need to give each other space so that we may both give and receive such beautiful things as ideas, openness, dignity, joy, healing, and inclusion.”

Rewards of working hard

TEACHER TALK By NITHYA SIDHHU

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It is only through hard work that one is able to deal with challenges and attain success.

FROM the time I was a child, I’ve worked hard. My siblings and I were not the only ones required to study hard, but we had to complete all chores, big and small, by the end of each day.

This trait was so ingrained in me that even in university, friends were amazed at how I could go dating every night and yet do extremely well in all my exams!

My then boyfriend, who is now my husband, used to joke with girls who queried him, “If you want to know the secret of her success, date me.”

Working hard was second nature to me. In fact, on my first posting, I was made the school’s Science Panel head. And while I was still wet behind the ears, I was assigned Form Five examination classes to teach.

I remember that I did not baulk. Despite some internal trepidation, I just got cracking and soon mastered the art of juggling my heavy responsibilities at school with the demands of my young marriage.

Many of my colleagues in similar positions then worked as hard as I did. We shared stories of how we could go home from a hectic day at school to cook, clean and raise our children.

Hard work underlined my teaching life. Woon*, a teacher friend of mine told me of how it took her 26 long years of working in a primary school, obtaining her degree part-time, moving on to a secondary school, suffering at the hands of several unfair practices and bearing up with a myriad of responsibilities, before she was finally recognised as a Guru Cemerlang (excellent teacher) last year!

I take my hat off to teachers like her who were brought up, not only to work hard, but to continue doing so despite the adverse and challenging times.

Interestingly enough, Malcolm Gladwell’s book, Outliers – The Story of Success, agrees completely with what I’ve just said about the virtue of working hard.

Gladwell talks about the culture of hard work among Asians and ascribes this quality to the success enjoyed by many of them in America.

“In any Western College campus,” he writes, “Asian students have the reputation of being in the library long after everyone else has left”.

In the case of Chinese students, he traces this legacy to the peasant farmers in Southern China who didn’t sleep through the winter like their Western counterparts, but kept on working instead - repairing dikes, selling baskets, making tofu, doing many side tasks and then, when the winter was over – were “back in the fields at dawn!”

According to Gladwell, being willing to work hard on tasks that others would have long given up, is one of the traits of a successful person.

Thanks to Yale University Law Professor, Amy Chua’s book Battle Hymn of the Tiger Mother, “putting children through a gruelling schedule tailor-made for success” has now become a hot issue for worldwide debate.

Yet, how many of us teachers and parents can deny the fact that we ourselves often exhort our young to not only study hard, but study really hard?

The Asian perspective is clear - there is no short cut to success, only hard work.

I personally advocate balance. The work-reward cycle is what I believe in – and I tell my students so. I urge them to intersperse stints of hard work with doing activities they enjoy – like dancing, playing basketball or listening to music. But, I do motivate them to work hard.

I know that not all of them do so. Some just don’t or won’t put in the required work. I have accepted the fact that, after all has been said and done by a dedicated teacher, the choice a student makes ‘to be or not to be’ hardworking is sometimes out of the teacher’s hands.

To the administrative team in any school, it is more irksome to deal with teachers who don’t pull their weight. There is now an undeniable and growing divide between teachers who work hard as a matter of course (due to their cultural/familial upbringing, personal beliefs or attitude) and those who don’t.

Khatijah*, who has been an academic senior assistant for the past eight years laments the fact that when deadlines loom at school, it is the teachers who don’t meet targets and deadlines, that aggravate her the most.
To her and many in her position, this culture of desultory work and laziness among some teachers is what seriously affects the performance levels of the school.

She confides to me, “Some say it is the young teachers of today and their attitude towards work that are mostly to blame but seriously, I beg to differ. I’ve seen many a young teacher doing an admirable job while an older one remains tardy.”

Mohd Azmi*, who has been a school principal for 15 years, puts it very bluntly, “If we want to get school programmes up and running, let’s get some things straight. Work is work and it must be done. The sooner everyone understands this, the faster we achieve success.”

By the way, have you read about the dabbawalas of Mumbai – that fleet of mostly illiterate men donning white caps, who use bicycles and trains in the most efficient way possible to deliver hot lunches from homes to offices all over the Indian city?

Their work culture is so impressive that Harvard Business School has studied it as part of its MBA curriculum. The name of the case study? The Dabbawala System: On-Time Delivery, Every Time!
Gladwell says, “Working really hard is what successful people do.”

He’s right. The dabbawalas in Mumbai are successful because they work really hard. Not only that – they respect their work and are grateful for it; work is worship and a means to serve God, and finally, they work not because their boss is watching them do it, but because it is the right thing to do.

Listen. If you’re a laggard at work, pull up your socks my friend, pull them up!

*Names have been changed.

Spreading their wealth & giving back quietly, a pledge from the heart!

By RASHVINJEET S.BEDI  rashvin@thestar.com.my

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Some of Malaysia’s richest individuals have been quietly supporting philanthrophic causes. 
 
HOW much are our super-rich worth? And are they giving back to society?

According to Forbes Asia, which released its 2011 rich list on Thursday, Malaysia’s top 40 richest individuals increased their wealth by 22% over the 2010 list. Their total fortune? A staggering US$62.1bil or RM188,320,000,000!

The number of digits alone is enough to make us ordinary folks sit up and take note. While many Malaysians still dream of making that first million or are still struggling for our bread and butter, our super-rich have zoomed far ahead.

Generous gesture: The Giving Pledge campaign initiated by Bill and Melinda Gates (above) and Warren Buffet has so far signed up 59 billionaires in the United States. – AP

Last week, Berjaya Corporation Bhd founder Tan Sri Vincent Tan pledged to donate at least half his wealth to charity through the “The Giving Pledge” campaign that was initiated by Microsoft founder Bill Gates, his wife Melinda and investor Warren Buffett.

Tan, a self-made entrepreneur who made it to the ninth spot on Malaysia’s rich list with a fortune estimated at US1.25bil (RM3.8bil), may well be the first billionaire outside America to openly make the pledge. (see story on Page 20)
So far, 59 billionaires in the United States have officially signed the pledge, an effort to invite the wealthiest individuals and families to commit to giving the bulk of their wealth to philanthropic causes and charitable organisations of their choice either during their lifetime or after their death.

The world’s youngest billionaire and Facebook founder Mark Zuckerberg, who is said to be worth US$6.9bil, signed the pledge last year. The 26-year-old entrepreneur believes it is a mistake to wait “when there is so much to be done.”

Others who have made pledges include New York Mayor Michael Bloomberg, Oracle founder Larry Ellison, Star Wars director George Lucas and CNN media mogul Ted Turner.

While not all our billionaires have openly pledged to give away their fortunes, a number of them have been quietly involved in philanthropic causes, some for decades.

Philanthropy is generally seen as a private matter in the Asian context, says Dr Yeah Kim Leng, chief economist of Rating Agency of Malaysia (RAM).

He believes that in Malaysia, some wealthy individuals have contributed substantially to philanthropic causes but kept a low profile.

A simple Google search shows that most of those on the Forbes list have channelled substantial sums to charity organisations or set up foundations for the poor or needy students.

“They are publicity shy because in Asian culture, contributions must be seen to come from the heart. I think it’s a personal choice we should respect,” says Yeah.

And with all philanthropists, it’s always the case of “giving back” to society. While each country has different needs, Malaysian philanthropists tend to focus on education and related causes of improving oneself. Tan himself set up The Better Foundation Malaysia in 1997.

Vincent Chin, the partner and managing director of the Boston Consulting Group (BCG) Malaysia says that in America, the tradition of giving back to society goes back to the days of oil magnate John Rockefeller.

“There is great understanding that society has given you a lot and you have the responsibility to give it back,” says Chin who is also BCG’s regional leader of philanthropy work in the Asia-Pacific region.

Datuk Ruby Khong, President of Kechara Soup Kitchen (KSK), however believes there is a tendency for many wealthy people to keep their fortunes within their families because of traditional and cultural beliefs.

“Our forefathers left their homeland to earn a living and they believed that every single cent is important. Tan’s gesture sets a precedent which hopefully, others will follow. People need someone they can relate to and emulate,” she points out.

Khong also hopes that people will look at Tan’s pledge in a positive light instead of questioning his motive.
Whatever the case, there is definitely a need for funds, says Josie Fernandez, director of Philanthropy Asia.
She points out that there are many overcrowded orphanages and homes which have to rely on the services of volunteers instead of full-time staff.

“The need for philanthropy will be greater in future with escalating prices,” she notes.

In other parts of the world, philanthropic activities centre on the greatest needs of that society as well as the passion of the giver, says Chin.

For instance in poorer countries, philanthropic contributions are often directed towards providing shelter, food and clothing whereas in richer economies, causes like the welfare of animals, the arts and culture gain attention. But at the end of the day, it doesn’t matter how the money is utilised as long as it is channelled to the needy.

Chinese businessman Chen Guangbiao, 42, for instance has pledged to donate his entire fortune to charity when he passes on and leave nothing for his descendants. Worth RM2.35bil, the father of two has donated RM635mil so far.

For Chen, wealth is like water.

“If you have a glass of water, you drink it yourself. If you have a bucket of water, you keep it in your house, but when you have a river, you have to learn to share it,” he said in an interview with StarBiz last year.

Billionaire Quotes

Passing down fortunes from generation to generation can do irreparable harm. In addition, there is no way to spend a fortune. How many residences, automobiles, airplanes and other luxury items can one acquire and use? Herb and Marion Sandler, former Co-CEOs of Golden West Financial Corporation and World Savings Bank

“People wait until late in their career to give back. But why wait when there is so much to be done?”
Facebook founder Mark Zuckerberg
 
Ridiculous yachts and private planes and big limousines won’t make people enjoy life more, and it sends out terrible messages to the people who work for them. It would be so much better if that money was spent in Africa – and it’s about getting a balance. 
British entreprenuer Richard Branson

Is the rich world aware of how four billion of the six billion live? If we were aware, we would want to help out, we’d want to get involved.
 Microsoft founder Bill Gates

“If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.”
American industrialist Warren Buffet

My father used to say, ‘You can spend a lot of time making money. The tough time comes when you have to give it away properly.’ How to give something back, that’s the tough part in life.
Lee Iacocca, former president and CEO of Chrysler Corporation

Giving back quietly

Many of those who made the rich list have been quietly supporting philanthrophic causes. Among them are:

>Tan Sri Robert Kuok Hock Nien, 87, has again made it to the top of Malaysia’s rich list, with a fortune estimated at US$12.5bil (RM38bil). He has held pole position since 2006 when Forbes Asia began ranking the 40 richest Malaysians. Unknown to many, the Kuok Foundation was set up in 1970 and has disbursed RM157mil in study loans, grants and scholarships from 1970 to 2009. As at end of 2009, more than 7,500 awardees have completed their studies.

>Telecommunications magnate Tan Sri Ananda Krishnan, 72, ranked number two on the list, is another publicity-shy billionaire. According to Forbes, he helped the 1985 Live Aid rock concert project that raised US$240mil around the world for African famine relief. Ananda, who is worth US$9.5bil (RM28.83bil), has donated millions to education, the arts, sports and humanitarian causes in Malaysia through his privately-owned holding company, Usaha Tegas, and its three main listed subsidiaries: Maxis; satellite TV company Astro and Tanjong. In 2003, Usaha Tegas pledged RM160mil to various education funds in the country.

>At number three spot is Puan Sri Lee Kim Hua, 81, the widow of casino magnate Tan Sri Lim Goh Tong whose family’s net worth is estimated at US$6.6bil (RM20.03bil). In 1978, Lim set up Yayasan Lim, a family foundation that donates regularly to educational and medical institutions, old folk’s homes, various organisations for the physically handicapped and other charitable causes. In 2009, the Group contributed to Women’s Aid Organisation, Malaysian Paediatric Foundation, Hospis Malaysia, Alzheimer Disease Foundation, Malaysian Liver Foundation, Tunku Azizah Fertility Foundation, Gujerati Association Federal Territory and Selangor, Divine Life Society and others.

> Tan Sri Syed Mokhtar AlBukhary, 59, who ranks No. 8 on the rich list and has an estimated worth of US$2.5bil (RM7.6bil), set up the AlBukhary Foundation which funds the AlBukhary International University AIU) in Kedah.The Foundation also does extensive work beyond Malaysian borders as well – it has done work in Afghanistan, Australia, Bosnia, Indonesia, Iran, Nepal and Pakistan among others.


A pledge from the heart

By RASHVINJEET S. BEDI  rashvin@thestar.com.my

Saying it’s no publicity stunt, Tan Sri Vincent Tan explains why he made the pledge to give away half his fortune. 
 
TO all the doubting Thomases out there who think his pledge to donate half his fortune is just a publicity stunt, tycoon Tan Sri Vincent Tan Chee Yioun, 59, has one request – to give him the benefit of the doubt.
“People shouldn’t pre-judge me but look at my actions over the next couple of years,” he tells Sunday Star.

Tycoon on a mission: Tan sharing a light moment with children from the Nurul Iman Welfare Society For the Children of People Living with HIV/AIDS, Malaysia. He hopes to help as many organisations as he can.

“If more wealthy people give half their wealth away, the world will be a much better place. I do not want to put pressure on anyone but just motivate more to contribute (to society),” he says, while acknowledging that a number of fellow billionaires are already donating to charity and education foundations quietly.

Tan adds that he will leave enough for his children so they are “comfortable”, but not to the extent that they don’t have to work. His 11 children, he stresses, have been supportive of his decision.

“They say it’s my money and I can make the decisions. They know I didn’t inherit it and that I started with nothing,” says the Berjaya Corporation chairman, adding that his inspiration to pledge half his wealth came from the Giving Pledge, an initiative by US philanthropists Bill Gates, Melinda Gates and Warren Buffet.

Tan adds modestly that even if he is worth RM1bil, half of it would mean RM500mil.
“That’s still a lot of money,” he points out.
Forbes Asia’s list of Malaysia’s top 40 richest individuals released on Thursday placed Tan on the ninth spot with a fortune of US$1.25bil (RM3.8bil). His Berjaya Group has diverse interests in food and beverage, financial services, telecommunications, property, resorts and gaming. Many are familiar names like Digi, Sports Toto, McDonald’s, Starbucks and 7-Eleven.

While all causes are deserving, Tan says he admires Mercy Malaysia, the Tzu Chi Society Buddhist organisation and World Vision for their work.

“These are organisations that I would like to work with,” he says, adding that contact had been established with them.

But, he says, he is not closing doors on other causes because he wants to be as diversified in his philanthropic work as he is in his business endeavours.

“We want to touch more lives,” says Tan whose Better Malaysia Foundation already supports a number of charities.

Tan, who has pledged RM20mil to charity this year, explains that he would not be able to give everything immediately but will do so gradually as he needs to divest some businesses and personal investments to bring in the cash for charity.

“With divine blessings, I can live to 80. That’s another 21 years. If I can give an average of RM50mil a year, that would be RM1bil,” he says.

So will it be difficult to part with all that cash?

“It doesn’t really affect my lifestyle, so it’s not difficult. We are only custodians of wealth. The public supports our businesses, so it is only right to give some of it back to society.”

For those who aspire to join the Billionaires’ Club, Tan says hard work is essential to achieve success. But he believes luck plays a major role too. In his case, he was lucky to get the franchise for McDonald’s in 1982, he adds, revealing that he wrote hundreds of letters over a seven-year period before McDonald’s responded to him. The rest, as they say, is history.

“I was persistent. You have to be hardworking but many hardworking people never had luck,” he grins.
Tan, who only studied until Form Five, also believes it is important to have a good command of English.

“It is important to understand and be able to speak English because it is the language of progress. If I didn’t have a good command of English, do you think McDonald’s would have chosen me as their partner?”

One of his dream projects is to set up free or subsidised tuition classes for English throughout the country to help the young generation improve their grasp of the language.

Asked if he would consider pledging 99% of his wealth just like Buffet and Gates, Tan replies that the percentage pledged depends on one’s wealth. He points out that Gates and Buffett have tremendous wealth that will last generations even after giving them away.

“I think 50% is a good start. If I were much more wealthy, perhaps I would give more,” he quips.