Futu finds HKD$10M a hot pick for threshold of financial freedom in Hong Kong, taking 111 years of savings to achieve Savvy investors aim higher

(Hong Kong – March 15, 2023)

Futu Securities International (Hong Kong) Limited ("Futu") has launched "Futu Investor Report - Investment Preferences and Financial Freedom" ("Report") unveiling Hong Kong people's expectations for wealth. It reveals that HKD$10 million is the hot pick for the threshold level of financial freedom, taking 111 years for non-investors to achieve. That said, the wealth can only be achieved through inheritance to the next generation. The report also shows that people looking at HKD$10 million should invest at least 40% of their income to be financially free. However, the investment ratio of over 50% of respondents is under 20%, leaving a massive gap between the current investment level and their target. 


Nearly 30% of Hong Kongers invest for “Getting Rich”; savvier investors aim higher for wealth
The report tells that Hong Kong people are eager to make a fortune through investing instead of just to fulfill basic living expenses. Additionally, experienced investors have a higher expectation of wealth. Among six investment goals, a majority of Hong Kong respondents opted for “Getting rich” (27%) as their investment goal; “Retirement” (21%) comes next. “Housing”, a prevalent dream of Hong Kong people ranks third. Making a considerable lift to their wealth level to fulfill different life goals and live an ideal life is what investors want to achieve most through investment.

Among different age groups, investors with more experience would have higher expectations of wealth. 67% of people with over five years of investment experience invest for this goal, which is higher than that of other respondents.


Taking 111 years of savings to reach financial freedom at HKD$10 million
"Financial freedom" has become a dream for many Hong Kong people. The report by Futu highlighted that about 41% of respondents defined HKD$10 million as a threshold of becoming financially free. For example, if one was to take 30% (about HKD$7,500) as the median monthly savings level, it would take more than 111 years to achieve financial freedom. 

In general, Hong Kong people are big savers. Most of the surveyed saves 20% to 40% of their income. One in every five people saves 40-60%. On the other hand, a majority of respondents invest rather conservatively, mostly within 10-20% of their income; while over half of the interviewees' investment ratio are under 20%.
"Certainly, it's unrealistic to reach financial freedom through 111 years of saving. The simplest way to realize your goal in advance is to start investing earlier and invest harder, while finding more sources of income at the same time. Let's use the HK$10 million goal as an example. If investors lift their investment-to-income ratio to 40%, i.e., invest HK$10,000 a month, given the 8% annual return (MSCI World's annualized return in the past 10 years was about 9.6%), they can see their dream come true in 26 years. However, over half of investors merely invest less than 20% of their income. And not a few are unaware of inflation's impact on purchasing power, which potentially pushes them further away from their goal. We see a significant room for people's investment-to-income ratio to go up." said Dickson Kwong, Senior Investment Consultant for Futu Securities. 


More than 40% of investors are confident about consumption recovery in the post-epidemic era
The report finds that 41% of respondents are confident about the market recovery in the post-pandemic era. Also, about 24% believe the United States Federal Reserve will slow down hiking interest rates. Though the market was shrouded in shadow last year, some respondents secured high returns on Futu's trading platform. Those who had a return of over 30% are predominantly from the high-income group. Among these successful investors' preferred sectors this year, information technology won the highest number of votes (20%); next to it are consumer staples (15%) and utilities (9%). 


More than 70% of Futu users made profits from fund investment last year
With anticipating a new investment landscape in 2023, investors appear rather active in choosing investment tools, as the survey finds. Stocks are the most popular choice to seize investment opportunities, while funds is another option being spotted. According to data from Futu's platform, more than 70% of fund investors last year received positive returns. By dividing them into different groups, investors with more experience tend to hold funds for a long time. The survey also shows that more experienced investors better recognize the importance of fund investment in achieving diversified asset allocation and mitigating risk in a volatile market. Moreover, they believe that funds are run by professional fund managers who would better navigate different market conditions by adjusting investment strategies in a timely matter.

Meanwhile, there are different kinds of factors that could affect investors' behavior while investing funds. The survey tells that fees are the biggest concern (20%) of fund investors, representing a major worry about the end returns being cannibalized. The fund's past performance (19%) and rating (15%) follow as a factor to consider a fund. Also, many investors tend to look at how a fund's strategy matches its investment goals as well as the level of convenience of fund subscription. 

“Investors tend to correlate investment with “Getting rich”, uncovering a fact that expectation for wealth is made higher through investment. Financial freedom cannot be reached with ease, nonetheless creating a wealth management plan is still a lifetime business to run to fulfill various financial goals. As the first step to start investing, choosing a one-stop trading and investment platform with comprehensive functions and easy operation is very important. As the largest fintech broker in Hong Kong, Futu is committed to exploring different fields and facets of investment opportunity, and is aiming to provide the most up-to-date news within markets. Futu will continually aspire to grow with all Hong Kong people along their journey towards achieving financial freedom.” said Mr. Leaf Li, the founder of Futu Securities. 


The contents of this document are for informational purposes only, and are not and should not be construed as an offer or recommendation by Futu Securities International (Hong Kong) Limited(hereinafter referred to as "Futu Securities"), nor should they be construed as professional advice or investment advice. Before making any investment decision, you should fully understand the risks and benefits and consult a professional advisor if necessary. Futu Securities strives to be objective and fair in the information and quoted data in this document, but cannot guarantee its accuracy, completeness, and reliability. Neither Futu Securities nor its affiliates will be liable for any loss arising from any reliance on or use of the contents of this document. This document is intended for users in the Hong Kong Special Administrative Region only, and non-Hong Kong investors are responsible for complying with all applicable laws and regulations in their relevant jurisdictions.