Young people need reality check: JPMorgan Asset Management
Young Hong Kong adults in their 20s and early 30s have their heads in the clouds building castles in the air, according to JP Morgan Asset Management.
Its study focused on Hong Kong people aged from 20 to 29, and found that many were simply unrealistic about achieving their financial goals.
While they aimed to save, on average, HK$6 million before they retire, up to 51 per cent could only save less than HK$5,000 per month, the survey found. Given Hong Kong’s low interest rate environment, it would take nearly a century for this group to retire, based on their current saving rate.
Worse still, up to 12 per cent of those polled belonged to the “moonlight clan”, who lived beyond their means, surviving from monthly pay cheque to pay cheque or even borrowing to tide them over.
“For young people in this city there’s a gulf between their saving goals and reality,” said Leo Cheung, executive director and head of direct business at JP Morgan Asset Management.
According to the survey, most people born in the post-80s wish to accumulate a HK$1 million pot of gold, by the age of 33 and retire at 55.
That is far more aggressive than older Hong Kong people, according to JP Morgan, which said people aged between 30 and 39 aimed to become Hong Kong dollar millionaires by 43 and to retire at 57.
“Some of them are just too optimistic,” Cheung said, referring to the 20-somethings polled by JP Morgan.
While buying an apartment is a key goal for 58 per cent of the post-80s when they start investing, they also liked spending on entertainment or other treats, the survey found.
For example, up to 42 per cent of those surveyed saved money so they could travel, and 30 per cent saved money to spend on luxury goods and other consumables.
Half of the 20 to 29 year-olds polled had less than HK$50,000 in total investments, according to the survey.
Hong Kong’s situation is not rare.
In China, a survey of 15 to 35 year-olds in Guangzhou last year showed that up to 35 per cent were part of the so called “moonlight clan”, according to a China Daily report.
And seven per cent of the respondents were dubbed as “NEETs” -- denoting people “not in education, employment or training”.