Hong Kong’s affluent become millionaires at 33 on average
HONG KONG: The Special Administrative Region’s affluent become Hong Kong dollar millionaires at the age of 33 on average and are expected to build HK$10mil in liquid assets by an average age of 62, the latest HSBC Premier 2023 Affluent Survey finds. According to the survey, 61% of respondents bank on savings from their salary to reach their first HK$1mil, rather than on income from other sources, such as investment profits.
But, when it comes to reaching the next milestone of accumulating HK$10mil, only one-third of them count mainly on savings, while a majority of them gain from trading investment products and fixed assets – at 21% and 14%, respectively.
The survey shows that one out of 17 respondents, or 6%, have already hit the HK$10mil mark by an average age of 45.
These respondents put 70% of their cash into financial assets, suggesting a more aggressive investment approach. In comparison, their counterparts who have not achieved their goal keep over 40% of their cash in risk-free deposits.
“The first local-currency million is an important milestone that many in Hong Kong feel comfortable achieving,” said Sami Abouzahr, head of investments and wealth solutions, wealth and personal banking at HSBC Hong Kong.
“Building net worth that caters for greater life ambitions is a bigger challenge. There are no proven formulas for building wealth but our experience with clients shows the tried and tested way is through early planning, regular saving, disciplined investing and diversification,” he said.
Nearly 60% of respondents cited a sluggish macroeconomic and investment environment as the predominant challenge they face when striving to meet the target of HK$10mil.
Other major impediments include the wrong investment decisions, unexpected expenses and career or salary bottlenecks.
Though real estate is still regarded as an indispensable tool for wealth-building and legacy planning, fewer people see property investment as an elixir to wealth preservation given the lacklustre housing market. Only half of the respondents endorsed the wealth protection power of property, down 23 percentage points from last year’s survey.
The survey also found that affluent individuals are focusing more on the needs of their family members and succession planning as part of their overall wealth journey.
Up to 44% of surveyed parents will financially support their children in home purchasing, with plans to subsidise them reaching an average of HK$1.93mil.
Additionally, property is just behind cash as the most popular asset for wealth transfer to spouses, children and grandchildren. On average, surveyed parents intend to leave behind 1.3 properties for each of their children. — China Daily/ANN
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