Young people need reality check: JPMorgan Asset Management

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Buy now, pay later. A survey by JPMorgan Asset Management of Hong Kong people aged 20-29 found that many had unrealistic financial goals, with many living from payday to payday and spending money on luxury goods, rather than putting some money aside for their old age. Photo: AFP

Published: 2:15pm, 9 Oct 2012Updated: 3:07pm, 14 Oct 2012

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.