Futu Survey Finds Hong Kong People Must Reserve 111 Years for Choosing 10 Million as a Threshold of Wealth Freedom

Futu Securities International (Hong Kong) Limited (“Futu”)Announcing the Futu Investment Preferences and Wealth Freedom Report (the “Report”), the survey revealed that the maximum number of Hong Kong respondents took HK$10 million as a financial freedom threshold and no investment is expected to last 111 years, which means that only generations can enjoy. The report estimates that to reach the target early, the population has to invest at least 40% of the income, while the overall over 50 per cent of the respondents still have less than 20% of their investment income.

The report shows that Hong Kong people are more eager to “get rich” by investing than real spending on living, and the more investment experience, the higher the expectation on wealth. Among the six investment targets, the most Hong Kong people choose to “get rich” (27%), followed by “retirement” (21%). Although many Hong Kong people have a dream, they only ranked third in the survey. Many Hong Kong investors see that investing can greatly enhance their overall wealth and achieve different life goals.

Among the different people, the more experienced investors have higher expectations of wealth, and nearly 70% (67%) of investors with more than 5 years of experience choose to “get rich” as the target, higher than other respondents.

Financial freedom has become the dream of many Hong Kong people in recent years. More than 40% (41 per cent) of respondents have defined 10 million as the threshold of financial freedom. In terms of the population's main monthly income (HK$2-3 million) and the median of savings (20%-40%), it takes more than 111 years alone to reach financial freedom.

Overall, according to the survey, Hong Kong respondents still prefer to save more than 20 to 40%. One in 5 people prefer a savings income ratio of 40%-60%. The investment side is more conservative. The main focus is to invest 10% -20 percent of income, and more than half of those with less than 20% of the total investment income.

Mr Kwong Chi-kit, Senior Investment Advisor of Futu Securities, said“It is obviously unrealistic to achieve financial freedom with a savings period of 111 years. If Hong Kong people want to achieve financial freedom as early as possible, the easiest and most straightforward way to do so is to increase their investment ratio and increase their income stream. With an example of HK$10 million and a monthly income of HK$20,000 to HK$30,000, investors can try to increase their investment share to 40%, or invest 10,000 a month, with an annual return of about 8% (MSCI World's annualized return of about 9.6% over the past 10 years) to meet its financial freedom target for 26 years. However, over 50 per cent of investors still have less than 20% of their investment income. While many of them neglect the purchasing power of inflation, the real financial gap may be greater, and there is still a huge room for improvement in general investment income.”

Asked about the market views, the report pointed out that 41% of respondents were bullish on market consumption recovery after the pandemic, leaving the second expectation of a slowdown of the Fed rate hike (24%). Despite the turmoil in 2022, there were still many high-return investors last year, of which higher than 30% were mostly high-income individuals. The survey showed that they were most bullish on “information technology” (20%), “consumer necessity” (15%) and “utilities” sectors (9%) this year.

A new situation may be welcomed in 2023. Investors are relatively active in choosing investment vehicles, and in addition to equities, fund products have also become a hot choice for investors. According to Futu Securities Platform, more than 70% of fund investors profit from fund investments last year. Experienced investors tend to hold funds for a long time. The survey also found that experienced investors agree with the importance of investing in funds, including diversification and managed by professional fund managers. They can make investment decisions and adjust to market conditions and various factors to combat market turmoil and relatively stable.

When selecting funds, fund fees became the most important factor for investors, accounting for 20%, followed by the fund's “past performance” (19%) and “fund rating” (15%), indicating that investors are more concerned about the cost of fund fees will nibble on the return of the fund. At the same time, the survey also showed that many investors would consider how fund investment strategies can achieve their investment objectives and whether the fund buying process is convenient.

Mr. Li Hua, Founder of Futu Securities, said: “The survey shows that many Hong Kong people connect their investment with wealth, showing that investing broadens people's imagination of wealth. Although it is not easy to achieve financial freedom, it is essential to establish an investment plan to achieve different life goals. To take the first step, it is important to choose a one-stop trading and investment platform that is fully functional and user-friendly. As the largest technology broker in Hong Kong, Futu has been keeping pace with Hong Kong people, developing different investment sectors, providing updates on market trends and wealth appreciation. Futu is willing to accompany everyone in Hong Kong to grow with technology to enhance their investment experience and accompany investors to embark on the path of wealth freedom.”