Savings is the first step of money management and we cannot stress enough how important it is to be financially secured. According to a recent survey conducted by Sun Life Financial Hong Kong, almost 40% of the respondents aged between 18 to 40 have worried about their financial situations in the past year. So how should we grow our wealth to achieve financial stability?

 

Last week, we shared four essential saving habits that we think everyone needs to know:

 

1. Track your savings systematically

2. Have a budget plan (50/30/20 rule)

3. Set a goal

4. Needs vs Wants

 

If you want to read more on this topic, you can check out the article here.

 

Saving money is the first step to grow your wealth, however, saving alone is not enough. According to the latest HSBC FinFit Study, though around 60% of the respondents have saving habits, only 44% of them had invested to grow wealth. 

 

Moreover, financial planners highlighted the gradual decline in savings rate in recent years. There are countless reasons to save, but more actions need to be taken other than just putting part of your income away for emergencies. Here are some options to grow your wealth:

 

1) Time deposit - low risk but low returns

 

If you are looking for low-risk investments, time deposit could be an option for you. It is a relatively more conservative investment option but it has a guaranteed stability. 

 

The risk is lower than investing in stock markets, though you cannot withdraw money during the agreed period. Hong Kong Deposit Protection also makes sure your funds are safe – so even if the market crashes and banks go bankrupt, you will get a compensation of up to HKD500,000. 

 

For instance, if you deposit HKD100,000 for a fixed term of 12 months, there is generally a 0.1 to 0.9% annual interest rate. 

 

Among all the offers below, CMB Wing Lung Bank’s Wintech program by far has the highest annual interest rate of 0.9%. When you save HKD100,000 for a year, you will get HKD900 interests. 

 

 

2) Virtual banks offers - more appealing annual interest rates

 

Virtual banks are on the rise. Hong Kong has eight licensed virtual banks right now, including Mox Bank, Livi Bank, Welab Bank, ZA Bank, and Airstar Bank. 

 

Compared to traditional bank institutions, virtual banks have a more appealing annual interest rates for their current accounts:

 

3) Global asset allocation - diversified with higher returns

 

Looking for investments with higher returns? Global asset allocation would be a great option for long-term investment. It consists of 60% of stocks and 40% of bonds. The markets have had ups and downs in the past 10 years but the annual return rate is between 6.39% to 7.7% on average*. 

 

(*Source from Lazy Portfolio ETF Stocks / Bonds 60/40 Portfolio)

 

For example, if you take out HK$1,000 and keep investing HK$1,000 each month with an annual return of 6%, after 30 years, you will get a total of HK$980,000. Your principal is only HK$360,000 while you get HK$620,000 interests. 

 

Not sure how to start investing in a global asset allocation? We are here to help! AQUMON’s robo-advisor personalizes an investment portfolio for you with your best risk-adjusted returns. Our star products SmartGlobal (a portfolio consisting of HK-listed ETFs) and SmartGlobal Max (a portfolio consisting of US-listed ETFs) even allow you to start investing for as low as USD1,000. It monitors your portfolio 24/7 and triggers auto-rebalancing alerts when your portfolio drifts.

 

 

 

About us

As a leading startup in the FinTech space, AQUMON aims to make sophisticated investment advice cost-effective, transparent and accessible to both institutional and retail markets, via the adoptions of scalable technology platforms and automated investment algorithms.

AQUMON’s parent company Magnum Research Limited is licensed with Type 1, 4 and 9 under the Securities and Futures Commission of Hong Kong. In 2017, AQUMON became the first independent Robo Advisor to be accredited by the SFC.

AQUMON’s major investors include the HKUST, Cyberport, Alibaba Entrepreneurs Fund and the Bank of China International's affiliate.

 

Learn more in AQUMON APP

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