Table of Contents
The Ultimate Guide to Growing your Money in Hong Kong
Note: this page is very much a work in progress. My aim is to create the ultimate guide to managing your wealth in Hong Kong, either as an expat or local.
Whether you've just arrived at the Hong Kong International Airport or have been living in Hong Kong for several years, it's important to think of how to invest your money. This guide is intended to show you the most cost efficient and effortless ways to make your money work for you.
First I will start with some assumptions to help you decide whether this is the right guide for you. If none of these assumptions are true then you may need to look elsewhere:
- You prefer to invest rather than speculate - investing in when you use information to make a long term strategy whereas speculation tends to be more on the side of betting.
- You do not plan to make investing your main job - this means that passive investment gains are more useful than ones where you have to put more effort in or regularly check up on.
- You do not have high levels of unsecured debt - if you have a lot of unsecured debt you are probably paying more in interest than you could gain from investing right now.
Arming Yourself with Knowledge
The rest of this guide will assume that you have some conceptual knowledge of investing. If you don't or would like to refresh your memory or learn more about the theory then the following books are probably the best books on the subject:
- More Scientific: A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton Gordon Malkiel
- More practical: Millionaire Expat: How To Build Wealth Living Overseas by Andrew Hallam
Both are very readable but it's fair to say that the Hallam book was built on the shoulders of the Malkiel book. If you have limited time, the Hallam book is your best bet but if you would like to know more about the theory read Malkiel as well.
As soon as you update your LinkedIn profile to say that you are in Hong Kong people from various insurance and asset management firms will start messaging you. They may even find out your work phone number or email address and start contacting you through those channels. They are incessant. And this is why you should not consider buying their products - they are glorified salespeople paid a commission and performance bonus. That commission is coming out of your returns.
They will often start the sales pitch with the promise of tax optimisation. In most cases what they are selling you is a “Qualifying Deferred Annuity Policy”. The salespeople are not lying when they tell you that you can save tax, but you are doing so at the expense of abysmal returns and investing in illiquid and deliberately hard to understand products. It is seriously not worth investing in these products and I will write more about it another time.