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How to retire early in Hong Kong

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  1. #341

    Under HK$200? I;m impressed. I manage that for 3 months or so in winter, but not in summer!


  2. #342

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    Quote Originally Posted by dentarthurdent:
    Under HK$200? I;m impressed. I manage that for 3 months or so in winter, but not in summer!
    Dayum. Summer right now is me spending too much time at work or else baring my nakedness for the entirety of the world to see. The world being my room, and nakedness being me in an oversized t-shirt weeping into lukewarm water. I sweat manly sweat. A++.

    Totally recommend the full experience with a side of uneaten ramen and indie music in an ear!

    And ohh, in Winter I think I managed approximately 100 HKD every month from October to April. Open windows and lots of wind- the buildings opposite me blast air conditioning so there's always heat coming from there and blowing over to my apartment. That becomes a lot less of a problem in Winter.

  3. #343

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    This is great. Nice to see some other frugal people out there. I'm going to get a wifi power strip that monitors power consumption of each device (Xiaomi sells them for around $100) and do some analysis. I've been running aircon in dry mode and it's actually really comfortable. I'm interested to measure the power consumption to see if it's significantly different. I'll post what I find here.


  4. #344

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    Quote Originally Posted by dentarthurdent:
    Yes, but my average buy price is 5.2. The dividend yield based on that is currently over 10%. If the share price drops by 20% I'm not that bothered.
    That's a good attitude. I have found it is not easy to stay calm when that 20% means, for example, a 100k USD. But then it's a good opportunity to load up more of the stock, funded by the dividends.

    On a sidenote, I found an Octopus card on the street, with 80'HKD on it and 50'deposit.
    A couple of days later I lost a card with 50 on it.
    Overall I still have more but the loss was more hurtful than the excitement about the gain.

    It's just like that, so I try not to look at market price fluctuations too closely.
    Last edited by Morrison; 10-08-2017 at 08:07 AM.

  5. #345

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    Quote Originally Posted by Morrison:
    On a sidenote, I found an Octopus card on the street, with 80'HKD on it and 50'deposit.
    A couple of days later I lost a card with 50 on it.
    Overall I still have more but the loss was more hurtful than the excitement about the gain.
    The Endowment Effect.

  6. #346

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    Quote Originally Posted by Cheeky Kiwi:
    The Endowment Effect.
    If I remember correctly, the endowment effect is sumting else.

    The example I mentioned demonstrates that losses hurt more than gains, even if it's paper losses or gains.
    And that might make me nervous, and then I start to make mistakes.
    So I try not to look daily at quotations, and try to ignore major drops unless it's a buying opportunity

  7. #347

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    Loss aversion is what you are feeling, which is used to explain the Endowment Effect:

    https://www.behavioraleconomics.com/...loss-aversion/

    The fact that you are self-aware will help you bigly in managing the effect.


  8. #348

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    Original Post Deleted
    congratulations!

  9. #349

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    re-reading the black swan.... it seems fitting given the news on N. Korea testing H bomb today


    Quote Originally Posted by John Doe Jr:
    The Black Swan – Nassim Nicholas Taleb
    This is a book for realists. It’s a challenging read at times, and somewhat philosophical at some points. But the overall message is to expect the unexpected (and indeed the things that can never be anticipated). The Global Financial Crisis of 2007-2009 was arguably a Black Swan event in the sense that very few people saw it coming, and even those that did largely underestimated its severity. What does this mean for your financial well-being? Read the book and find out. You won’t likely get a check list of dos and don’t's from Mr Taleb, but you may get a much better appreciation for what your facing in the world of investing, and indeed in life itself.

  10. #350

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    Warning, very long post alert.

    Surprisingly, while I have bookmarked this thread, I have actually never actually read it or posted on it. I have now finally gone through the entire thread, and am very impressed that it is still going 7 years later. There is lots and lots of very useful advice on this thread.

    Many regulars will know my situation, I have been quite open of things, partly to try and warn others so they don’t make the mistakes I have.

    I thought it would however be useful to put down in writing my background, my philosophy in saving / retiring and my present situation to hopefully give a bit more context. I would not be surprised if many other people are in very similar positions as I am financially, socially and career wise.

    I am from an immigrant family who moved to the UK in the early 1980s. My parents were not really well off and for the first few years we were living in the UK my parents tell me it was close to a subsistence lifestyle, my parents would have just enough to make ends meet, we were poor. Things got better over the years to the point where we had a comfortable living. Very much good quality working class. Growing up we were not rich by any measure, however we had a roof over our heads, clothes on our backs and food on our table. My parents worked very hard to make sure of this. They have always been self employed and would run their shop during the day and at night at home would also make various simple product to sell. Any “luxuries” had to be saved for. It was very much “save to survive”. My parents would save up as much money as possible, but this wasn’t really invested, it would sit in the bank account. They didn’t really know about investing and growing their savings. On top of that they sent us to private schools. They were very much of the learn to get a good professional job mentality, so we didn’t have to go through what they did.

    My parents are now semi-retired. They are now reasonably financially secure, their mortgage is paid off and their expenses are minimal. They do continue to work, mainly because they don’t know anything else. They are however starting to slow things down and trying to enjoy being in the position they are.

    I explain all of the above so people get a better idea of where my background is when it comes to saving/investing/retiring.

    My position. Educated, professional job, good salary, comfortable lifestyle. Very much upper middle class. We have a dual income and have now been working for nearly 20 years (wow, been that long!!!) While educated, I have never really had much of an understanding / education on investing for retirement. I am/was financially illiterate. When I was working in the UK, I would just save my money, some it going in tax free savings and some of it going in high interest accounts. This stuff doesn’t really exist in Hong Kong. In Hong Kong it was just a case of leaving money in my account from my salary.

    Speaking to others in my profession, this is what a lot of us do. While work on deals involving millions and billions of dollars, dealing with clients who are very very rich, we have no understanding on how they have become rich and on the numbers. The mindset is you work hard and save, get good bonus, get promotions, get a higher salary, etc etc live off your salary.

    About 10 years ago, when I first moved out to HK I ended up doing two things.

    The first thing was to buy an investment property. I cashed in all my UK ISAs and I bought at the end of 2007 when the market was on an upward trend. Come 2008 I was in negative equity, my rental income was covering my mortgage payments and a bit more. Move on to 2017, the value of the property has more than doubled and my rental income is pretty much covering my mortgage payments twice over.

    The second thing I did was ask my boss at the time if he could recommend someone about doing something with my money. He put me in touch with an IFA. You all know the story to how that ended up. I didn’t really understand the fee structure and the costs and was wowed by all the big talk given by the IFA. The IFA then suckered me again into buying the OMI fund. Again read the other thread, everything is very much detailed in that thread. I will come out of that saga with about USD3k after 10 years worth of investment.

    Apart from the above two things, for the past ten years, we really haven’t been doing much with our money beyond just putting it in a bank account. I did dabble a bit with shares (HSBC, Power Assets, etc), but only up to around USD30k. I also got sucked into my bank’s marketing talk to buy some investment funds. Again, not a huge amount, only around USD30k again.

    My wife is also very much of the same mindset. You earn money and you put it into your bank account. She did also buy a place in 2007 with some family help, where she lived in. When we married, we rented that place out and have been renting since.

    The real turning point for me came with the posting about the Andrew Hallam book and then reading his website. Seriously, that was a revelation. The website and the many many comments on the website went into a great amount of details of the policies I had signed up to and also on ETF investing. The other major revelation was the concept of compound interest. Really, I did not know about this until reading about it through Andrew Hallam’s website. Like I have said, I’m educated by financially illiterate.

    I bought his first book “Millionaire Teacher” and devoured it over the course of a few days. I have recently become consumed, hoovering up various blogs, forums and websites about long term passive investing and saving for retirement and am really kicking myself I did not know about this sooner. I am learning something new every day. I am presently also reading Rich Dad Poor Dad. The mindset of this guy is an eye opener. I don’t agree with everything he says, but a lot of what he does I am starting to see his view. I am sharing and discussing this newly found knowledge with my wife, friends and family. My wife, especially, is getting the brunt of all of this. Really, it has consumed me recently.

    At this stage in our lives we are lucky. We both have good jobs (although as I will come on to later, the job side of things is a pressure point) and we keep our costs under control. Between the both of us we have accumulated a good chunk of cash (for various personal reasons my wife has sold her property in). Basically around 90% of what we are worth is in cash (I’m excluding my investment property in this analysis). Again, I need to repeat, while educated we are/were financially illiterate. Our personal position is about to change soon, where our expenses are going to increase greatly.

    I now move on to my job situation. I came to HK with one company. It was decent paying, I was slowly climbing up the ladder, but I felt not fast enough. I pushed for promotion a few times only to be held back. 18 months ago a few new options came up, so I took the bait. My (now) previous employer did offer me a significant pay increase to retain me, but at that point I was very bitter with them. My present employer is in many respects a better outfit, but much much more demanding and their standards are much much higher. I have had to up my game significantly, but it just hasn’t been enough. While I remain well compensated, promotion again is proving elusive. In addition, due to my personal situation, I really don’t want to be busting my balls working late nights just to meet the required standards.

    I am in a very niche industry and there are only some many players in my market. Moving companies again will prove quite difficult. I have been doing the same job pretty much for nearly 20 years, so as a result as well my skill set is very limited. To change industry, especially in HK (with the language skills), would be very very difficult. So in my mind anyway, I’m stuck. This is squarely my fault, I can’t blame anyone for this. I didn’t broaden my skill set when I had the opportunity and I didn’t push.

    Because of my job situation and my recently learning I have discovered another concept, becoming financially independent. My goal is now I would like to be financially independent as soon as it is possible. I don’t want my wife or me to have to rely on our jobs because we need to have a salary coming to survive (remember, saving to survive from my parents). How do we become financially independant? Well that’s the big question. I know I have a lot to learn and a lot more to find out how to get there, but I hope I am now on a bit better track.

    Things I have done since all of these revelations?
    - Firstly I’m unwinding my FPI and OMI policies. FPI is already unwound. OMI will take a bit longer.
    - I am reading and learning more and part of this process is trying to speak to people who have retired early, are financially independent and also people in similar situations as me.
    - I have pulled out of my investment funds apart from one, which I bought with the money from a tax loan.
    - I have set a couple of trading accounts and have started buying worldwide based ETFs
    - I have spoken to a couple of IFAs (fee based only) all recommended through Andrew Hallam and his website. I have not invested with any of them yet, but am speaking to them. I feel this is needed because we are sitting on a whole heap of cash that we need to do something with rather than just sitting in our bank accounts. Even if I do end up using one of these IFAs it will only be for the short term, just to help getting things set up.

    I hope this thread makes useful reading and people get some benefit out of it.

    Tadashi, emx, GYHK and 8 others like this.

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