Financial Freedom:Guide to Retiring Early in HK
If you are tired of the 9 to 5 work grind, this article is great for you as you will learn ways to set yourself on the path to financial freedom through investment.
What is financial freedom/financial independence?
Financial Independence, Retire Early (FIRE) is a movement of devotees committed to a lifestyle involving extreme savings (saving up to 80% of monthly salary) and investment that aims to allow them to quit their day jobs or retire from work altogether.
So, when can you retire? Some people suggest that when your savings reach approximately 25 times your yearly expenses, then you may quit your jobs or and retire. This is calculated based on FIRE devotees making small withdrawals from their savings, typically around 4% of the balance yearly, to keep pace with the inflation.
Financial independence retire early calculator
So, when can you retire? You can work this out by an online FIRE calculator. If you are determined enough, you will realize that it is not impossible to retire early!
Enter some basic information including your age, annual income, your annual expenses and your current net worth.
Enter your asset allocation in percentage. Assets refers to stocks, bonds and cash.
Enter the expected returns for each category.
Press Calculate to work out the result.
4% rule: What is it?
The 4% rule is a common rule of thumb when it comes to how much you can withdraw from your money in investments in your first year of retirement. As its name suggests, you should be able to comfortably live off 4% of your money in investment during the first year of retirement and then adjust for inflation each subsequent year. If you follow this, you shouldn’t be outliving your money during a 30-year retirement.
See below an example of the 4% rule:
| Situation 1 | Situation 2 | |
|---|---|---|
| Monthly Expenses | $20,000 | $10,000 |
| Yearly Expenses | $240,000 | $120,000 |
| Retirement Savings Required | $6,000,000 | $3,000,000 |
Best Online Brokerage in Hong Kong 2024
Interactive Brokers
- Min. Commission Fee US Stocks
- US$0.0035
- Min. Commission Fee HK Stocks
- 0.015%
- Account Opening Min. Funding
- HK$10,000
・Transparent and low rates; investors could choose between fixed rate commission pricing and tiered pricing
・US$0.0035 Min. Commission Fee US Stocks
・0.015% Min. Commission Fee HK Stocks
Tiger Brokers
- Min. Commission Fee US Stocks
- US$0
- Commission Fee HK Stocks
- HK$0
- Account Opening Min. Funding
- HK$10,000
New customers who complete the specified account opening conditions and submit the reward claim form via MoneySmart, can receive up to the rewards as below.
Exclusive rewards: JBL Link 20 Voice-activated portable speaker (Value: HK$1,699) / German Pool Capsule Coffee Maker CMC-101 (Value: HK$1,580) / Sudio E3 Noise Cancelling Earbuds - Random Colour (Value: HK$899) / HK$800 Apple Store Gift Card / HK$800 PARKnSHOP supermarket vouchers (first deposit of HK$10,000 or US$1,300 above)
Valuable Capital Brokerage Account
- Min. Commission Fee US Stocks
- US$0.99
- Commission Fee HK Stocks
- HK$0
- Account Opening Min. Funding
- HK$10,000
From now until 31 Oct 2024, new users who successfully open account via MoneySmart with promo code「32BR」, fulfilling specific requirements and submit the reward claim can get rewards below (either 1)
【Reward 1️⃣】Successfully open account and deposit ≥ HK$10,000 and retain for 30 days to get :
- SONY WH-CH720N Headphone (Valued at HK$1,299) / Jollying Pebble 24" Foldable Suitcase (Valued at HK$1,499) / HK$1,000 Apple Store Gift Card / HK$1,000 PARKnSHOP Supermarket Vouchers / HK$1,000 HKTVmall e-Vouchers
【Reward 2️⃣】Deposit ≥ HK$10,000 and no withdrawal for 60 days to get :
- Mobile Pixels DUEX MAX 14.1 (Valued at HK$1,880) / GoProHERO Action Camera (valued at HK$1,600) / HK$1,500 Apple Store Gift Card / HK$1,500 PARKnSHOP Supermarket Voucher / HK$1,500 HKTVmall e-Vouchers
Open accounts and complete 20 trades during retaining period, can get extra:
- HK$200 trading cash coupon*
See below for more rewards.
Futu Securities Account
- Min. Commission Fee US Stocks
- US$0.99
- Commission Fee HK Stocks
- HK$0
- Account Opening Min. Funding
- HK$10,000
[Limited Offer] From now until 31 Oct 2024, new users who successfully open account via MoneySmart with promo code「MS24」within 7 days, fulfilling specific requirements and submit the reward claim can get the rewards below. (Either 1)
Reward 1️⃣: Successfully open account and first deposit HK$80,000 or above and retain for 60 days to get the exclusive rewards:
- BERMAS 26" Front-open Suitcase (valued at HK$3,999) / B&W Pi7 S2 In-ear True Wireless earbuds (valued at HK$3,380) / SONY WH-1000XM5 Wireless Noise Cancelling Headphones (valued at HK$3,190) / HK$2,000 Apple Store Gift Card / PARKnSHOP E-Vouchers / HKTVmall Vouchers OR
Reward 2️⃣: Successfully open account and first deposit ≥ HK$10,000 or above and retain for 60 days to get the exclusive rewards:
- Sennheiser ACCENTUM True Wireless earbuds (valued at HK$1,750) / Jollying Pebble 24"Foldable Suitcase (valued at HK$1,499) / HK$1,000 Apple Store Gift Card / PARKnSHOP E-Vouchers / HKTVmall Vouchers
Investment + Loans: Ultimate 5 Rewards 🎉 : Successfully draw down a designated loan via MoneySmart, get APR as low as 1.38% + up to HK$38,300 regards in 3 simple steps, including up to HK$20,000 Cash Rewards!→ Visit the event page for more information.
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Account opening tutorial: Download and start using Futubull app > Click "ME" and enter "Promotion" Click "Redemptions"> Enter the MoneySmart redemptions code - "MS24", and deposit funds within 7 days
Webull Securities Account
- Commission Fee US Stocks
- US$0
- Commission Fee HK Stocks
- HK$0
- Account Opening Min. Funding
- HK$10,000
Limited-time Offer 🔥
From now until 31 October, new customers who successfully open an account through MoneySmart and submit reward claim can enjoy up to HK$5,480 exclusive rewards!
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【$80K Asset Reward 】: Upon successfully opening an account through MoneySmart, make first deposit of ≥HK$80,000 maintain the funds for 60 days:
* B&W Px8 Over-ear noise-canceling headphones (valued at HK$5,480）/ Beoplay EX Gold Tone In-Ear Earphone (valued at HK$3,678) / GoPro HERO13 BLACK (valued at HK$3,200) /HK$3,000 Apple Store Gift Card / PARKnSHOP supermarket vouchers/ HKTVmall voucher
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【NEWEST Reward】: Upon successfully opening an account through MoneySmart and making first deposit ≤HK$79,999 and maintain the funds for 60 days, can get :
- HK$600 PARKnSHOP supermarket vouchers
Investment + Loans: Ultimate 5 Rewards 🎉 : Successfully draw down a designated loan via MoneySmart, get APR as low as 1.38% + up to HK$38,300 regards in 3 simple steps, including up to HK$20,000 Cash Rewards!→ Visit the event page for more information.
Best Online Brokers and Trading platform in HK
| Stock Trading Platform | Commission Fees (US Stock) | Commission Fees (HK Stock) | Features |
|---|---|---|---|
| Valuable Capital Brokerage Account | US$0.99 | HK$0 |
|
| SoFi Hong Kong Brokerage Account | US$0 | HK$0 |
|
| Webull Securities Account | US$0 | HK$0 |
|
| Saxo Markets | US$3 | HK$18 |
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FAQ
How can I achieve financial independence？
- You can achieve financial freedom/financial independence through saving and building passive income. You can work out when you can retire using an online FIRE calculator. If you are determined, it’s not impossible to set yourself on the path to FIRE.