As the Lunar New Year approaches, many people reflect on their aspirations and set goals for the year ahead. But more important than setting goals is how to follow through and achieve them step by step.
A recent discussion on an online forum sparked widespread debate over whether a monthly living expense of just over HK$10,000 is sufficient. Some argued that even with a monthly income of HK$50,000 or HK$60,000, it is still difficult to manage expenses. Others believed that as long as housing, utilities, and food costs are excluded, then HK$10,000 should suffice.
In Hong Kong, housing costs are arguably the biggest expense. Those who believe that HK$10,000 is enough to live on are likely living rent-free with their parents or in a property provided by family. However, this is still far from achieving true financial freedom.
If we want to truly enjoy life without having to constantly work, the ideal is to “earn money even while doing nothing.” This is the essence of passive income—steady, monthly earnings that don’t require continuous active effort.
Of course, there’s no such thing as a free lunch. Life requires planning, and wealth must be managed. That’s why it’s crucial to prepare while you’re young, with the aim of eventually earning money passively. At that point, you can choose to continue working in your field out of passion or pursue your interests, without worrying about making a living.
At the age of 30, I achieved financial freedom through my own knowledge and execution—without relying on my parents. I majored in business at university, learning the fundamentals of finance and commerce. Later, I worked at a U.S. bank, handling nearly a hundred real estate development and financing projects for corporate clients. This experience sharpened my ability to spot promising properties. If I were to help the netizen who posted in the forum, I believe they could reach the initial threshold of financial freedom within two years.
Saving a Down Payment in Two Years
The forum user mentioned earning HK$28,000 a month. I suggest they try to save by reducing discretionary spending without significantly affecting quality of life or leisure. If they manage to live on HK$8,000 per month and save the remaining HK$20,000, they could accumulate HK$480,000 in just two years.
This amount would be enough for a down payment on a property in Ohio, USA. Rental income from the property could then cover the mortgage payments.
After another year, they could refinance the property with a local lender to pay off the remaining balance. At this point, the property would be fully owned, and the rental income could continue to pay off interest while also generating passive income. By gradually increasing their assets and leveraging appreciation, one property can become two, then four. This is the foundation for financial freedom.
As we grow older, our desire for quality of life tends to increase, along with our expenses. Saving becomes harder than it is when we’re young. That’s why youth is the ideal time to build savings and create streams of passive income. Ten years from now, you’ll be thankful you made these decisions today.
Written by:
Bonnie Wu, Founder of Capstone 72
Edited by:
Yip Lai Man
Published: February 7, 2024, 14:28
Last Updated: February 7, 2024, 14:28
Related Reading
