Save More Money!

Even people in the wealthy class aren't leaving enough money for loved ones

As if Hong Kong people don't have enough to save up for -- mortgage or rent, children, education, transportation, retirement, and investments -- and now apparently they aren't leaving enough money behind for loved ones in case they die unexpectedly.

According to a survey by Citibank in December of 1,224 affluent residents who have between HK$300,000 and HK$1 million in investment assets, there is a big gap between people's incomes and what they bequeath to loved ones.

The elderly have more money to leave for their children

For example, singles who are still working have a shortfall as high as HK$2 million, while for retirees it's HK$1.05 million. However when it comes to married couples with children, the shortfall is the widest at HK$4.65 million, while for childless couples it's HK$2.11 million.

"Those families with children need to prepare for their education, so they would need to prepare more" financially in the case of unexpected deaths, says Gordon Tsui Luen-on, managing director of Hantec Pacific in Hong Kong.

The study shows even those in the affluent bracket are struggling to make ends meet, while a record 1.37 million people, or 20 percent of the population live below the poverty line.

Kenrick Chung, chief commercial officer of Charter Management Group, said Hongkongers can voluntarily increase their contributions to the mandatory provident fund (MPF), or invest in annuity to prepare for retirement needs.

Families with children need to save even more money

The MPF has been so badly run and mismanaged with very little returns that most people only contribute the minimum amount and invest elsewhere. To even suggest contributing more to MPF is ridiculous.

So what are we supposed to do? When the stock market is stagnant, interest rates are still low and there are limitations on investing in the property market, how are people supposed to grow their money?