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  1. #11

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    Original Post Deleted
    If thats the approach, you could also if you want to, put 2000 aside in 2800, 2000 in HSBC, 2000 in HK Electric every month using the monthly investment plan. Use 2800 -> future x expense, HSBC -> future y expense, HK Electric -> future electricity expense?

    A different bank account works better in my opinion. As life goes, you realise that a simpler pool of cash is easier to deal with than cash spread around 23 different accounts for 46 different budget items. Keep money aside in a simple account which you cannot access via an ATM card, or rip the ATM card up as soon as you get it and no online access. The friction of having to go to a bank will remove the money from your impulse expenses.
    traineeinvestor likes this.

  2. #12

    Join Date
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    Start with identifying your goals.
    Continue by creating a spreadsheet with your finances (all of them) - this is useful for tracking progress/regression/planning.
    Then you can start looking at the appropriate tools.

    The tools are just that, tools - what really matters is your mindset.

    shri and greenmark like this.

  3. #13

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    With Hong Kong interest rates so low, this is the country to be BORROWING money, not saving money!

    pin likes this.

  4. #14

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    do a monte carlo simulation of what might happen on probability, maybe with 0 correlation, then work out the time horizon needed..
    if you have savings for every item in your list, then your savings will not be optimized because most of them will have 'unexpectancy' factor and you have to leave them in cash/current account to ensure you can draw them out anytime, even if the probability is extremely low.
    once you worked that out, you can start doing investment.. those with mean usage timeframe of less than 1y, current account,
    1y~2y, fixed deposit
    2y~5y, bond funds
    5y or more.. index funds.. etc..

    savings for your rainy days should also be invested, and not left as cash lying around, unless that is your investment philosophy


  5. #15

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    Quote Originally Posted by freeier:
    do a monte carlo simulation of what might happen on probability, maybe with 0 correlation, then work out the time horizon needed..
    if you have savings for every item in your list, then your savings will not be optimized because most of them will have 'unexpectancy' factor and you have to leave them in cash/current account to ensure you can draw them out anytime, even if the probability is extremely low.
    once you worked that out, you can start doing investment.. those with mean usage timeframe of less than 1y, current account,
    1y~2y, fixed deposit
    2y~5y, bond funds
    5y or more.. index funds.. etc..

    savings for your rainy days should also be invested, and not left as cash lying around, unless that is your investment philosophy
    Um they did say in the OP that they are not a numbers person.
    WeeRandomer likes this.

  6. #16

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    Haha yeah, you kind of lost me there.

    But taking some other suggestions into account, maybe I should keep all of my short-term savings in my regular account (trips, emergencies, special purchases) since I actually would be using them more frequently, and then get a separate bank account for long-term saving. Might need to save up more before thinking about investing...

    shri likes this.

  7. #17

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    Quote Originally Posted by hullexile:
    Um they did say in the OP that they are not a numbers person.
    ya i knew.. just throwing in to let others know where actually monte carlo can be useful since it was mentioned in some other threads... these are areas where it will work fairly well...

  8. #18

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    Quote Originally Posted by foreverhobbes:
    Haha yeah, you kind of lost me there.

    But taking some other suggestions into account, maybe I should keep all of my short-term savings in my regular account (trips, emergencies, special purchases) since I actually would be using them more frequently, and then get a separate bank account for long-term saving. Might need to save up more before thinking about investing...
    to put it in another way, money is fully fungible.
    no reason why money saved for one purpose (e.g. hospitalization emergency) cannot be used for other purposes (e.g. household repairs)... the probability of both happening together is very low..

    so generally the world says save around 6 mths of expenses, then invest the rest ...
    for those things with really low probability of happening (e.g. 1~2%, like hospitalization, accidents, etc).. use insurance to cover them... no point saving for that.
    for things that are discretionary (e.g. trips).. put them last...
    but rank your items in a financial logical manner.. if you read the book 'richest man in babylon'.. it says, everytime you get your paycheck, pay 'yourself' first... i.e. set up your retirement fund and make sure it is not touched for any reason short of real emergency. retirement fund might to us be a low priority, but actually financially it might be one of the most under estimated cost we have to cater to in due course.

  9. #19

    One can get a credit line for emergencies or spending spikes. The annual costs can be quite low in comparison to the ROI that one may receive on the investment. No need to keep money.

    bdw likes this.

  10. #20

    One of the best pieces of advice I received as a young man was "pay yourself first" - however much you want to set aside for long term goals should come out of your account each month by auto-pay. You set it up once and the forget it.

    If you don't want to research individual stocks, bonds etc, pick a low cost index fund like HK Tracker (HKEx: 2800) and get your bank to automatically buy your chosen amount of units for you every month.

    As for shorter term goals, you can achieve a degree of separation from your day-to-day money by using term deposits. The interest rates suck (a little less badly than leaving it on call in current or savings accounts) but it is a degree of accounting separation without opening a separate bank account or resorting to expensive gimmicks like FX deposits (unless you need those foreign currencies longer term).

    Example. Set up a standing instruction to buy HKD5,000 worth of Tracker units each month and then forget about this money and the monthly deduction. That's your long term savings. Whatever other money you have left at the end of the month beyond your emergency fund goes on term deposit for 1, 2 or 3 months and, each time it matures, add any spare money from your current/savings account to the term deposit and then roll it over again.