Inspiration from a short video (看「理財真人Show」後感)

Hi guys and girls! This is Jerry, the author of this blog! Today, I will deliver my promise by translating one of my old posts to English so that my English reader could also read about it!

慳錢大挑戰 為咗租樓可以去到幾盡？下集【理財真人Show】第一季Ep.2

In case any of you who doesn't know Cantonese or is too lazy to open the link, I will do a very short summary of the video. It is a reality show of a young adult who wants to rent a place to live. In order to make it happen, his mentor assigned $625 to him to spend for a week. Spending nearly 30% of the amount on the first day, he failed to meet his budget at last.

In my opinion, this kind of videos are nothing ground-breaking for Hong Kong people, but it makes me understand how people of my age spend money.

I am lucky that I have a relatively high-paid job, but I still choose to be frugal in a certain degree. For example, I have never paid to watch a football match and I tried my best to turn down unimportant social gatherings. I also spend as little as I can on my lunch. Yet, I do not find my frugal life tough because it is my own choice. I know, in order to achieve early financial freedom, I must save a lot first and think about ways to create wealth from my saving.

A festive meal or a fascinating football match might bring satisfaction for a period of time. Yet, I believe happiness is not created from spending money to buy some stuff or experience. Happiness is inside us waiting to be found.

All in all, I am very grateful of myself choosing a different path. There are still a lot to learn on the way to financial freedom. I hope I could keep this mentality until the day of freedom.
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(Original Chinese version)
有興趣的網友可點上面的Link觀看該節目。

這種舊調重彈的節目實在不能叫發人深省，但只少讓我明白與我年紀相約的朋友理財觀是怎樣。

也許幸運的緣故(其實最主是因為我刻苦努力)，小弟有一份較高薪的工作，可是仍非常節儉，球賽我不看，朋友聚會盡量推卻，還常常吃老麥當午餐。可是，我不覺得很辛苦，一切都是我自己的選擇。我知道要財務自由，首先就要量入為出，然後再想辦法創造財富。

另外，我覺得快樂是在心中的。也許一個豐盛的午餐或一場精彩的球賽能帶給我們一刻的快感，但是我覺得一個人快樂與否從來與物質無關。因此，我只有少量的娛樂支出。

但是，我自問仍有很多理財觀念尚需學習，希望能繼續保持這種心態，直到自由的那一天。

Should I buy a property in Hong Kong?

Hi guys!
This is Jerry, the author of this blog. Before sharing my views on the topic, I would like you to read the following article from a famous Hong Kong blogger.

股與樓的10年挑戰-止凡


We all know that how expensive the properties in Hong Kong are. It is extremely difficult for a young adult like me to own a property without the financial support from the older generations. I have a friend who is a professional. He bought a subsidised flat from Urban Renewal Authority. His parents made the down payment while he is paying for the instalments. I visited his place. It was quite good even though the size is about 200-300 square feet. So here come the question: Is it really worth it?

The answer is NO, at least for me. There are two reasons.

First, it is not necessary for me to move out of my parents' house and live in my own place at the moment. Unlike the Western society, it is not rare for Hong Kong people to live with their parents even when they enter the workforce.

Second, paying instalment is a negative cash flow which eats up passive income. My friend told me he has to pay about 50% of his salary for the flat. Therefore, he does not have much left for investing in other assets such as stocks. If he does not invest in other stuff, how can he create a passive income?

Some might say my friend need not invest in other stuff because the property price will rise and he could enjoy the growth. When the price rises to a certain level, my friend could get a second mortgage and buy another flat. Then he rents out his first flat so that the rent generated could pay the instalments of the second flat. Ultimately he will have more assets than me if I do not purchase any property.

Well, what if the property price did not rise? It might be unfair the assume the property price will drop. Yet, if the property price soars, will my friend be 'brave' enough to buy another at that time? or could his salary allows him to do so?

My ultimate goal is financial freedom. By definition, financial freedom is achieved when your passive income (no matter it is rent or stock dividends or anything else) covers your expenses. So far I could not see how buying a property could help me achieve this goal.

To sum up, I should not buy a property in Hong Kong at the moment. Thank you for reading! Please leave me a comment if you agree or disagree with me.