How HK's affluent build their wealth

Aiden He

Hong Kong's affluent become millionaires at the age of 33 on average and expect to build HK$10 million in liquidity assets by 62, a survey by the Hong Kong and Shanghai Banking Corp shows.

More than 60 percent of the respondents count on savings from salary to accumulate their first HK$1 million rather than other income sources such as profit from investments, the HSBC Premier 2023 Affluent Survey also finds.

The survey conducted from September 1-10 covered a sample of 1,098 respondents aged between 24 and 64 with liquid assets of HK$1 million or above.

While the millionaires hope they will have HK$10 million by the average age of 62, six percent already have secured that amount of liquid assets at 45 on average, the poll shows.

In contrast to millionaires, just one-third of the affluent with HK$10 million in hand rely mainly on savings to reach the milestone, and instead more people achieve the goal through profiting from trading investment products (21 percent) and fixed assets (14 percent).

And a middle-class person is now widely thought to be someone with an average of HK$6.37 million in liquid assets, up by eight percent from last year.

The study also reveals that fewer people see property investment as an essence for wealth preservation amid recent weakness in the real estate market.

Only half of respondents endorsed the wealth protection power of property, down 23 percentage points from last year's survey.

Still, nearly half of the surveyed parents said they would support their children financially in home purchasing, with a plan to subsidize HK$1.93 million on average.

Also perceived is that four in 10 of such parents would help their children buy a property when they married, while a quarter intended to do so on or before their children turning 18.

However, as much as 57 percent of people expect a correction in the SAR's home prices in the next 12 months, with three-quarters also projecting no improvement or even a deterioration in the local economy for next year.

Nearly 60 percent of people polled felt that a sluggish macroeconomic and investment environment is the predominant challenge they face when trying to hit the HK$10 million milestone.

Other major impediments include wrong investment decisions, unexpected expenses and career/salary bottlenecks.

Meanwhile, a report from Henley & Partners shows the number of wealthy individuals with investable wealth of US$100 million (HK$780 million) rose 12 percent year-on-year to 28,420 in the world.

New York City, with 775 resident centi-millionaires, tops the ranking by city, while Beijing and Shanghai are in the fifth and sixth spots, and Hong Kong eighth and home to 305 centi-millionaires.

And a study by AXA found mental stress is more prevalent among younger women in Hong Kong, with 64 percent of respondents aged 40 and below experiencing moderate to extreme stress over the last year compared to 46 percent of overall female respondents.