<p>People who love to travel are <strong>always</strong> thinking about their next getaway. Unfortunately, before the getaway really begins, you have to spend money to buy your flight. Luckily, there&#8217;s quite a few credit cards which make it easier on your pocket &#8211; we&#8217;ve shortlisted the four best credit cards to get miles faster.</p>
<p>In short, the best cards are:</p>
<ul>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZGJzX2JsYWNrX21hc3RlcmNhcmQiLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vYWQuZG91YmxlY2xpY2submV0L2RkbS90cmFja2Nsay9OMTA4Nzg5MS4zNjAzODY2UExBTlRPQVBQL0IyMjk1MTMzNC4yNjcyNDE1NTM7ZGNfdHJrX2FpZD00NjIxODY4NzA7ZGNfdHJrX2NpZD0xMjA4NzI2MDk7ZGNfbGF0PTtkY19yZGlkPTt0YWdfZm9yX2NoaWxkX2RpcmVjdGVkX3RyZWF0bWVudD07dGZ1YT0iLCJmcm9tIjoiQXNpYSBNaWxlcyBDcmVkaXQgQ2FyZCBBcnRpY2xlIn0=">DBS Black World MasterCard</a></li>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0Ijoic3RhbmNfYXNpYV9taWxlcyIsInR5cGUiOiJjYyIsImFwcGx5VXJsIjoiaHR0cHM6Ly9yZWJyYW5kLmx5LzN4NGZ0NiIsImZyb20iOiJBc2lhIE1pbGVzIENyZWRpdCBDYXJkIEFydGljbGUifQ==">Standard Chartered Asia Miles MasterCard</a></li>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiY2l0aV9wcmVtaWVyX21pbGVzIiwidHlwZSI6ImNjIiwiYXBwbHlVcmwiOiJodHRwczovL2FkLmRvdWJsZWNsaWNrLm5ldC9kZG0vdHJhY2tjbGsvTjcxOTU3Ni4zNzU0MzU1UExBTlRPL0IyMjEzOTQ4Ny4yNjc4OTk3NTE7ZGNfdHJrX2FpZD00NjI1MDc4MjI7ZGNfdHJrX2NpZD0xMTA1ODk1ODk7ZGNfbGF0PTtkY19yZGlkPTt0YWdfZm9yX2NoaWxkX2RpcmVjdGVkX3RyZWF0bWVudD07dGZ1YT0iLCJmcm9tIjoiQXNpYSBNaWxlcyBDcmVkaXQgQ2FyZCBBcnRpY2xlIn0=">Citi PremierMiles</a></li>
<li><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiYW1leF9jYXRoYXlfZWxpdGUiLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vcmVicmFuZC5seS91cnRjbTciLCJmcm9tIjoiQXNpYSBNaWxlcyBDcmVkaXQgQ2FyZCBBcnRpY2xlIn0=">American Express Cathay Pacific Elite Credit Card</a></li>
</ul>
<p>Read on to see why we think they&#8217;re the best:</p>
<h2 id="dbs-black-world-mastercard">DBS Black World MasterCard</h2>
<p>If you have an annual salary of more than HK$ 240,000, this could be the card for you. Even though the card is pretty good for spending locally in Hong Kong, it&#8217;s even better if you plan to spend abroad with it &#8211; local spending gives you 1 mile / HK$ 6, and overseas spending gives you 1 mile / HK$ 4.</p>
<p>DBS$ can be exchanged for either cash back or for a few different kind of frequent flyer programs like Asia Miles, KrisFlyer, Avios or Phoenix Miles.</p>
<p>The welcome offer gives preferential rate on miles as well &#8211; here&#8217;s how it works:</p>
<p><img title="星展銀行 Black World Mastercard 亞洲萬里通 Asia Miles 飛行里數" src="https://cms.planto.io/wp-content/uploads/2019/12/DBS_BlackWorldMasterCardTable.jpg" alt="DBS Black World MasterCard Asia Miles Spending Comparison" /></p>


<credit-card-comparison-page language="en" creditcardtype="asia_miles" particularcard="dbs_black_world_master"></credit-card-comparison-page>


<h2 id="standard-chartered-asia-miles-mastercard">Standard Chartered Asia Miles MasterCard</h2>
<p>Unlike the DBS Black World MasterCard, <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0Ijoic3RhbmNfYXNpYV9taWxlcyIsInR5cGUiOiJjYyIsImFwcGx5VXJsIjoiaHR0cHM6Ly9yZWJyYW5kLmx5LzN4NGZ0NiIsImZyb20iOiJBc2lhIE1pbGVzIENyZWRpdCBDYXJkIEFydGljbGUifQ==">Standard Chartered&#8217;s Asia Miles MasterCard</a> has a much lower salary requirement (HK$ 96,000 per year only) making it a very suitable starter card. Local restaurants, overseas &amp; online spending all get you 1 mile / HK$ 4, and all other eligible spending gives you 1 mile / HK$ 6. Probably best of all, they automatically redeem each month into your Asia Miles account without any conversion fees! </p>
<p>Just like the DBS Black World MasterCard, this card also has preferential rates on miles as part of the welcome offer &#8211; this is what it adds up to:</p>
<p><img src="https://cms.planto.io/wp-content/uploads/2019/12/StanChart_AsiaMilesCardTable.jpg" alt="Standard Chartered Asia Miles MasterCard Spending Comparison"></p>


<p><credit-card-comparison-page language="en" creditcardtype="asia_miles" particularcard="stanc_asia_miles"></credit-card-comparison-page></p>


<h2 id="citi-premiermiles-credit-card">Citi PremierMiles Credit Card</h2>
<p>The <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiY2l0aV9wcmVtaWVyX21pbGVzIiwidHlwZSI6ImNjIiwiYXBwbHlVcmwiOiJodHRwczovL2FkLmRvdWJsZWNsaWNrLm5ldC9kZG0vdHJhY2tjbGsvTjcxOTU3Ni4zNzU0MzU1UExBTlRPL0IyMjEzOTQ4Ny4yNjc4OTk3NTE7ZGNfdHJrX2FpZD00NjI1MDc4MjI7ZGNfdHJrX2NpZD0xMTA1ODk1ODk7ZGNfbGF0PTtkY19yZGlkPTt0YWdfZm9yX2NoaWxkX2RpcmVjdGVkX3RyZWF0bWVudD07dGZ1YT0iLCJmcm9tIjoiQXNpYSBNaWxlcyBDcmVkaXQgQ2FyZCBBcnRpY2xlIn0=">Citi PremierMiles Credit Card</a> requires an annual salary of HK$ 240,000. It&#8217;s quite good for people who spend overseas or in foreign currencies a lot. Local spending gives you 1 mile / HK$ 8 which isn&#8217;t great compared to the others.. but if you spend more than HK$20,000 each month, you get 1 mile / HK$ 3 for overseas &amp; foreign currency spending. If you spend less than HK$ 20,000 each month, you still get a great 1 mile / HK$ 4 for overseas &amp; foreign currency spending.</p>
<p>In addition to that, 12 &#8216;free&#8217; airport lounge services are provided each year, but you need to spend $5,000 within 30 days after each usage of the airport lounge.</p>
<p>The card also has a great welcome offer for new customers &#8211; if you spend more than HK$ 10,000 within 2 months of card issuance, you can choose:</p>
<ul>
<li>HK$ 800 supermarket cash coupon; or</li>
<li>HK$ 700 SOGO cash coupon, or</li>
<li>Hong Kong Mandarin Oriental Hotel Double Afternoon Tea</li>
</ul>


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<h2 id="american-express-cathay-pacific-elite-credit-card">American Express Cathay Pacific Elite Credit Card</h2>
<p>The <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiYW1leF9jYXRoYXlfZWxpdGUiLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vcmVicmFuZC5seS91cnRjbTciLCJmcm9tIjoiQXNpYSBNaWxlcyBDcmVkaXQgQ2FyZCBBcnRpY2xlIn0=">American Express Cathay Pacific Elite Credit Card</a> application requires a slightly higher annual salary of HK$ 300,000. The card is great for frequent travellers since you get to use the Plaza Premium Lounge around Asia for the whole year, and you get decent rewards &#8211; 1 mile per HK$ 6 for local spending and 1 mile per HK$ 4 for overseas spending.</p>
<p>The AMEX Cathay Pacific Elite Credit Card also gives some preferential treatment as part of the welcome offer, alongside a 1000 mile granted on application:</p>
<p><img src="https://cms.planto.io/wp-content/uploads/2019/12/Amex_CathayEliteCardTable.jpg" alt="American Express Cathay Pacific Elite Credit Card Spending Comparison"></p>


<credit-card-comparison-page language="en" creditcardtype="asia_miles" particularcard="ae_cathay_elite"></credit-card-comparison-page>



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<h4 id="recommended-reads">Recommended Reads</h4>
<ul>
<li><a href="https://www.planto.hk/en/blog/iphone-11-pro-Max-credit-cards/">The smartest way to buy the new iPhone</a></li>
<li><a href="https://www.planto.hk/en/blog/virtual-credit-card-apple-hk/">A Guide to Virtual Credit Cards in Hong Kong</a></li>
</ul>

Many credit cards offer rewards for spending - these are the four best credit cards that have the best welcome offers and spending rewards: DBS Black World MasterCard, Standard Chartered Asia Miles MasterCard, Citi PremierMiles, American Express Cathay Pacific Elite Credit Card. Choose the right card and be rewarded!

[Asia Miles Hacks] The 4 Best Credit Cards

<p>Life is often about trade-offs &#8211; investing is no difference. With low risk investments, you won&#8217;t lose your principal amount but you also sacrifice higher returns. Having said that, keeping yourself sane during a volatile market is to ensure you have balanced your risk. Here&#8217;s a few ways you can hedge risk and still get some returns.</p>
<h2 id="money-market-funds-low-risk-decent-returns">Money Market Funds: low risk, decent returns</h2>
<p><a href="https://www.planto.hk/en/blog/Money-Market-Fund-Intro">Money market funds</a> mainly invest in short-term government bonds, bank deposit certificates, and other low risk instruments. They&#8217;re highly liquid (so if you need the money, you can just sell them whenever you want), don&#8217;t have high fees and are low risk since you&#8217;re essentially lending money to governments like the United States. </p>
<p>As an example, the annualized returns of HKD and USD money market funds offered by <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZnV0dV9zZWN1cml0aWVzIiwidHlwZSI6ImludmVzdG1lbnRfYnJva2VyIiwiYXBwbHlVcmwiOiJodHRwczovL3Bhc3Nwb3J0LmZ1dHU1LmNvbS9zZW0vaGs/bGFuZGluZ0lkPTMmY2hhbm5lbD02NDIiLCJmcm9tIjoiTG93IFJpc2sgSW52ZXN0bWVudCBBcnRpY2xlIn0=">Futu&#8217;s MoneyPlus</a> can have returns of 1.5% to 1.9%. Given their liquidity, they&#8217;re a great place to store idle cash while you&#8217;re waiting to make your next investment. </p>
<p>However, it&#8217;s important to note that returns from money market funds can be affected by short-term interest rate changes and exchange rate fluctuations.</p>


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<h2 id="time-deposits-simple-but-with-limitations">Time Deposits: simple, but with limitations</h2>
<p><a href="https://www.planto.hk/en/blog/term-deposit-latest-offers-comparison/">Time deposits</a> are quite possibly the simplest instrument you can buy &#8211; you deposit your funds in the bank for a fixed period of time and get a return for that. The returns aren&#8217;t usually very high (since there&#8217;s essentially no risk), and even though some banks may offer annual interest rates of more than 2%, they&#8217;re usually only for shorter periods of time (e.g. 3 months) which means you&#8217;d have to find another time deposit after that. </p>
<p>Furthermore, if you want to take the money out early, the bank may charge a penalty and you won&#8217;t get any interest either. This can be troublesome if you need to get your money out sooner (for an investment opportunity or for an emergency)!</p>
<h2 id="bonds-variable-risk-more-complex">Bonds: variable risk, more complex</h2>
<p>Bonds are generally issued by companies or governments with the aim of raising funds. When you buy a bond, you&#8217;re basically lending money to a company or government and in return they will give you a fixed interest each month or year (also why they&#8217;re often called &#8216;fixed income&#8217;). </p>
<p>The rate of return on a bond depends on the risk you&#8217;re taking. The safest bonds e.g. US Treasury Bills only have returns of 2% to 2.5% but the chance of you losing your money is really low (what are the odds the US government will be unable to pay you back!). On the other side of the spectrum are junk bonds &#8211; these are companies who credit agencies have assigned a &#8216;junk&#8217; rating. This means their financial situation is not very strong and thus there is a higher chance they will not be able to pay the interest on your bond!</p>
<p>Investors can buy bonds directly from banks / asset management firms, or buy bond ETFs from the stock market directly. The advantage of a bond ETF is that it is highly liquid and the risks are relatively dispersed since each fund would buy hundreds of bonds. It should be noted that different funds have different investment strategies and risk. You should do your own research to understand what kind of bond portfolio an ETF consists of and what kind of risks are involved.</p>
<h2 id="good-investing-practices">Good investing practices</h2>
<p>The best portfolios should be diversified and tied to your goals. If you&#8217;re goals are primarily in the short term, low-risk investments are a great idea. However, you are losing out on returns when you go for low risk. If you have goals for financial freedom or retirement that are much further away, you would want to have more stocks in your portfolio. </p>
<p>Either way, if you&#8217;re still deciding or researching, it doesn&#8217;t hurt to have a securities account ready to help you make the jump into investing. </p>


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<p><strong>Important information:</strong><br>
Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>

Three low risk investments - money market funds, time deposits and bonds. Even though their returns aren't the highest, they are an essential part of risk management in an intelligent investor's portfolio.

[Investing for Beginners] 3 Low Risk Investments

<p>Since Hong Kong remains one of the world’s most expensive housing markets, you need to apply for mortgage if you wish to buy a property. The HKMA has set certain regulations on bank mortgage loans which affects the amount of mortgage first-time home-buyers can borrow and hence the size of the flat they can afford to buy.</p>
<p>This article will help you understand how Loan-To-Value Ratio (LTV) and Stress Test work so you can plan your first home!</p>
<h3 id="ltv-caps-vary-by-property-value-up-to-90-ltv-for-property-value-below-8-million"><strong>LTV caps vary by property value: Up to 90% LTV for property value below $8 million.</strong></h3>
<p>In the past few years, the market has generally defined residential properties valued $6 million or below as “first-time homes”. However, first-time home-buyers in Hong Kong can now set their sights on more expensive flats under a new measure to relax mortgage rules announced in the 2019 policy address.</p>
<p>Under the new measure, the LTV caps, down payments, monthly repayment amounts and income requirements are calculated as follows:</p>
<table>
<thead>
<tr>
<th>Property Value</th>
<th>LTV Cap</th>
<th>Down Payment</th>
<th>Loan Amount</th>
<th>Monthly Repayment Amount</th>
<th>Base Income Requirement</th>
<th>Stressed Income Requirement</th>
</tr>
</thead>
<tbody><tr>
<td>$4,000,000</td>
<td>90%</td>
<td>$400,000</td>
<td>$3,600,000</td>
<td>$14,459</td>
<td>$28,918</td>
<td>$34,540</td>
</tr>
<tr>
<td>$5,000,000</td>
<td>90%</td>
<td>$500,000</td>
<td>$4,500,000</td>
<td>$18,074</td>
<td>$36,148</td>
<td>$43,175</td>
</tr>
<tr>
<td>$6,000,000</td>
<td>90%</td>
<td>$600,000</td>
<td>$5,400,000</td>
<td>$21,689</td>
<td>$43,378</td>
<td>$51,808</td>
</tr>
<tr>
<td>$7,000,000</td>
<td>90%</td>
<td>$700,000</td>
<td>$6,300,000</td>
<td>$25,304</td>
<td>$50,608</td>
<td>$60,443</td>
</tr>
<tr>
<td>$8,000,000</td>
<td>90%</td>
<td>$800,000</td>
<td>$7,200,000</td>
<td>$28,919</td>
<td>$57,838</td>
<td>$69,078</td>
</tr>
<tr>
<td>$9,000,000</td>
<td>80%</td>
<td>$1,800,000</td>
<td>$7,200,000</td>
<td>$28,919</td>
<td>$57,838</td>
<td>$69,078</td>
</tr>
<tr>
<td>$10,000,000</td>
<td>80%</td>
<td>$2,000,000</td>
<td>$8,000,000</td>
<td>$32,132</td>
<td>$64,264</td>
<td>$76,755</td>
</tr>
<tr>
<td>$11,000,000</td>
<td>50%</td>
<td>$5,500,000</td>
<td>$5,500,000</td>
<td>$22,091</td>
<td>$44,182</td>
<td>$52,768</td>
</tr>
<tr>
<td>$12,000,000</td>
<td>50%</td>
<td>$6,000,000</td>
<td>$6,000,000</td>
<td>$24,099</td>
<td>$48,198</td>
<td>$57,565</td>
</tr>
<tr>
<td>$13,000,000</td>
<td>50%</td>
<td>$6,500,000</td>
<td>$6,500,000</td>
<td>$26,107</td>
<td>$52,214</td>
<td>$62,363</td>
</tr>
</tbody></table>
<p>*The above table assumes a mortgage interest rate of 2.625%, a repayment period of 30 years, the mortgagor is not holding any residential properties in Hong Kong. The table does not include any additional insurance premium.</p>
<p>*The new LTV measure only applies to completed residential properties, in other words, off-plan properties are not applicable.</p>
<p>*If you fail the stress test, you will still be eligible for loans up to 80% or 90<strong>%</strong>, but the insurance premium will be adjusted accordingly.</p>
<p>*The new LTV measure does not apply to mortgage refinancing</p>
<p>*All leased properties have LTV caps of 50%, regardless of property prices</p>
<h3 id="mortgage-insurance-plans-mip"><strong>Mortgage Insurance Plans (MIP)</strong></h3>
<p>Mortgage insurance is a must if your LTV is more than 60%. It aims to protect mortgage loan providers (banks) from losses. The premium amount will range from about 1.15% to 4.35% of the loan amount.</p>
<p>For home-buyers taking mortgage loans with property values going beyond the existing caps, an additional 15% premium will be charged. Under the new measure, if you cannot pass the stress test, you will still be eligible for MIP loans up to 80% or 90% LTV ratio, subject to an additional adjustment to the premium based on relevant risk factors.</p>
<p>Home-buyers can choose between a single premium payment or an instalment payment. Besides, mortgagors often receive a premium discount from mortgage insurance providers.</p>
<h3 id="stress-test-less-important-under-the-new-measure"><strong>Stress Test: less important under the new measure</strong></h3>
<p>When approving a mortgage loan application, banks will assess an applicants’ Debt-Servicing Ratio (DSR) to measure how stressful the mortgage&#39;s repayments will be on an applicant&#39;s finances. They will also perform a stress test to estimate their repayment ability after a simulated 3% raise in interest rate.</p>
<p>Before the Stress Test, the base DSR limit is 50%. For example, if you want to buy an $8 million property, with a loan amount of $7.2 million, an interest rate of 2.625% and monthly repayment amount of $28,919, your monthly income must be no less than $57,838 to get an approval for a mortgage loan.</p>
<p>The stress test is calculated at the current interest rate plus 3%, requiring the applicant’s DSR to be less than 60%. Using the above example, assuming the interest rate rises to 5.625%, the monthly repayment amount will increase to $41,447. The applicant’s monthly income must be no less than $69,078 to pass the Stress Test.</p>
<p>In the past, mortgage applicants are required to pass the Stress Test. But as mentioned above, under the new measure applicants will still be eligible for MIP loans up to 80% or 90% LTV ratio even if they cannot pass the Stress Test. This has greatly reduced the importance of the Stress Test.</p>
<table>
<thead>
<tr>
<th>Property Value</th>
<th>LTV Cap</th>
<th>Loan Amount</th>
<th>Interest Rate</th>
<th>Monthly Repayment Amount</th>
<th>Base DSR Limit (50%)</th>
<th>Stressed DSR Limit (60%)</th>
</tr>
</thead>
<tbody><tr>
<td>$8,000,000</td>
<td>90% ($800,000)</td>
<td>$7,200,000</td>
<td>2.625%</td>
<td>$28,919</td>
<td>Min. income of $57,838</td>
<td>Min. income of $69,078</td>
</tr>
</tbody></table>
<p>*For the actual mortgage terms, please refer to the information provided by banks and insurance providers.</p>
<h3 id="mortgage-tips-shop-around-to-find-the-best-interest-rate-and-rebates"><strong>Mortgage Tips: Shop around to find the best interest rate and rebates</strong></h3>
<p>The mortgage rates currently offered by banks range from 2.375% to 2.625%. Many banks offer cash rebates as well, generally 1% to 2% of the loan amount. For a loan amount of $4 million, a cashback at 2% could be as high as $80,000. It could really help you repaying several instalments and reducing your mortgage burden.</p>
<p>Nevertheless, banks have different criteria for approving loans and rebates, which also depends on the applicant’s financial situation. Shop around and find the best mortgage offer for you!</p>

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[Updated based on Mortgage Guidelines in October 2019] Must read for first time house buyers - understand the latest regulation in LTV and Stress Test for first-time applicants looking to get a mortgage.

【Mortgage 101】Loan-To-Value Ratio (LTV) and Stress Test

<p>Hong Kong is one of the most economically unequal societies in the developed world with a Gini coefficient as high as 0.539. Unless you were born with a silver spoon, building wealth can be very hard.</p>
<p>What were the millionaires’ secrets? US financial expert Tom Corley began a “Rich Habits” study on 223 wealthy individuals. All of them had at least USD 160K (~HKD 1.25M) in annual gross income and USD 3.2M (~HKD 25M) in net assets, which are believed to be comparable to the “middle class” in Hong Kong today.</p>
<p>During his study, he found 4 predominant kinds of people who would accumulate wealth:</p>
<h2 id="a-the-saver-investors">A. The Saver-Investors</h2>
<p>Tom Corley found this the easiest way to accumulate wealth which also involves much lower risk. Generally, the Saver-Investors reached their first USD 1M (~HKD 7.8M) around their mid-to-late 30s, and accumulated an average net worth of USD 3.3M (~HKD 25.7M) by their mid-50s. Just less than 22% of the millionaires in Tom’s study were the Saver-Investors.</p>
<p><strong>How to become one of them?</strong></p>
<p>Start investing your savings early in life! And continue to do so in a disciplined way for many years. The Saver-Investors typically had a middle-class income with a low cost of living and saved 20% or more of their income. They made saving and investing part of their routine and were constantly thinking about smart ways to grow their wealth.</p>
<p><strong>Risks and challenges</strong></p>
<p>The most challenging part was the enormous saving-investing discipline and long-term commitment.</p>
<h2 id="b-the-dreamers">B. The Dreamers</h2>
<p>The Dreamers could be successful entrepreneurs, actors or musicians, who pursue dreams and accumulate wealth at the same time. They loved what they did for a living and believed pursuing their dreams were one of the most rewarding things in their lives. Approximately 28% of the millionaires in Tom’s study were the Dreamers. They accumulated an average net worth of USD 7.4M (~HKD 57.7M) over a much shorter period of about 12 years.</p>
<p><strong>How to become one of them?</strong></p>
<p>To become a Dreamer, you must be willing to work long hours and able to handle financial stress. In average, Dreamers worked more than 61 hours per week before finally achieving their dreams. Weekends and vacations were almost non-existent.</p>
<p><strong>Risk and challenges</strong></p>
<p>At first, getting a steady income is harder than you think. Some of the dreamers even had to sell their assets to finance their dreams. If you are not a risk-taker, this path may not be for you.</p>
<h2 id="c-the-company-climbers">C. The Company Climbers</h2>
<p>About 31% of the millionaires Tom studied were the Company Climbers. The Company Climbers were individuals who worked for big companies and had climbed to the top, for instance, landing a senior executive position. They took an average of 22 years to accumulate a net worth of USD 3.4M (~HKD 26.6M) or more. Most of their wealth came from either stock compensation or a partnership share of profits.</p>
<p><strong>How to become one of them?</strong></p>
<p>To be a Company Climber, you must have strong relationship-building skills. Networking and making lasting connections with powerful people in your industry is essential.</p>
<p><strong>Risks and challenges</strong></p>
<p>Like the Dreamers, you also have to be willing to work long hours. Despite that, the biggest risk is that if your company struggles financially, your time and effort there might not be rewarding to the extent you had expected.</p>
<h2 id="d-the-virtuosos">D. The Virtuosos</h2>
<p>The Virtuosos are among the best at what they do in their profession. They are paid a high premium for their knowledge and expertise, which sets them apart from the competition. About 19% of Tom’s study group were the Virtuosos, with an average net worth of USD 4M (~HKD 31.2M).</p>
<p><strong>How to become one of them?</strong></p>
<p>The Virtuosos are not necessarily geniuses. To become a Virtuoso, you must invest a lot of money or time before seeing any payoff. You have to spend many years continuously studying and learning. Formal education and advanced degrees are usually required.</p>
<p><strong>Risks and challenges</strong></p>
<p>Not everyone has the ability to devote significant hours every day practising their skill or the financial resources to pursue advanced degrees.</p>
<h3 id="thinking-of-starting-to-invest">Thinking of starting to invest?</h3>

<p><single-action-item 
      title="Get started with investing in Hong Kong"
      subtitle="Planto short-lists the best brokers to help you get started" 
      button_text="Learn more" 
      lang="en"
        link="https://www.planto.hk/en/blog/invest-hk-stocks-broker-bank-accounts"
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<p><single-action-item 
      title="Get started with investing in the US"
      subtitle="Learn how it's different from investing in the Hong Kong market" 
      button_text="Learn more" 
      lang="en"
      link="https://www.planto.hk/en/blog/US-Stock-Account-Compare"
      type="content"></single-action-item></p>


<p><strong>Important information:</strong></p>
<p>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>


American financial expert Tom Corley studied 233 millionnaires to understand how they got rich - he divided them into four categories to help people understand how they can grow their wealth

4 Ways to Become Rich – “…and this is the easiest one,” says US Money Expert

<p><strong>Money Market Funds</strong> are funds which offer very stable returns at low risk. They are able to do this because they consist of short-term government bonds (e.g. US treasury bonds), bank deposit certificates, and commercial paper. </p>
<p>If you invest in a money market fund, you are essentially lending money to the governments of mature countries like the United States and you can imagine the odds that they won&#8217;t pay you back are extremely low.</p>
<p>Given their high liquidity, low risk and stable returns, they are an essential part of an investor&#8217;s portfolio to store idle cash and to fight inflation, especially when the investment environment is uncertain.</p>
<h2 id="how-to-buy-a-money-market-fund">How to buy a money market fund</h2>
<p>There&#8217;s a couple of ways to get money market funds. You can buy Money Market Fund ETFs from any securities firm (although there are none available in the HK exchange, there are several in the US exchanges) &#8211; read how to open a US Brokerage account here. Another way to is buy them through a fund house like FundSuperMarket or Futu MoneyPlus. </p>
<p><a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZnV0dV9zZWN1cml0aWVzIiwidHlwZSI6ImludmVzdG1lbnRfYnJva2VyIiwiYXBwbHlVcmwiOiJodHRwczovL3Bhc3Nwb3J0LmZ1dHU1LmNvbS9zZW0vaGs/bGFuZGluZ0lkPTMmY2hhbm5lbD02NDIiLCJmcm9tIjoiTW9uZXlNYXJrZXRGdW5kX0FydGljbGUifQ==">Futu&#8217;s MoneyPlus platform</a>, in particular, offers very seamless access to money market funds. Once you open an investment account, while you are deciding what stocks to buy, you can just deposit your money into one of the funds offered by their MoneyPlus platform. You can choose a USD or HKD money market fund depending on the currency you hold and withdraw the money at any time, either back to your bank account or to invest in the market!</p>
<h2 id="performance-vs-time-deposits">Performance vs Time Deposits</h2>
<p>The returns of money market funds depend on the holdings in it. For example, if a fund is buying very short-term bonds, then the return will be lower (1.5% to 2%). If the fund consists of longer-term bonds as well, the return may be more than 2%. Essentially, the returns are quite comparable to time deposits.</p>
<p>We looked at the Time Deposits of more than 10 banks and the median interest rate is about 0.6%. You can, of course, get higher interest rates but only if you invest very large sums or only for a very short period of time (e.g. with 3 month promotional offers, etc). Among the money market funds of Futu MoneyPlus in USD and HKD, the median interest rate is 1.6%</p>
<p>If you were to deposit HKD 100,000 into an average Time Deposit and an average Money Market Fund, this is the kind of returns you will see over time:</p>


<mmf-vs-td-performance-calculator language="en"></mmf-vs-td-performance-calculator>


<p>Over time, you can see this difference in returns can add up quite fast. Again, you can find some time deposits with better interest rates on the market, but there are often more restrictions on the deposit period and amount, and sometimes are just short-term offers. Money market funds generally have good returns as long as you&#8217;re careful to note what kind of fees you are paying!</p>
<table>
<thead>
<tr>
<th></th>
<th>Money Market Fund</th>
<th>Time Deposits</th>
</tr>
</thead>
<tbody>
<tr>
<td>Fees</td>
<td>🙂 Low</td>
<td>🙂 Low</td>
</tr>
<tr>
<td>Risk</td>
<td>🙂 Low</td>
<td>🙂 Low</td>
</tr>
<tr>
<td>Liquidity</td>
<td>😀 High</td>
<td>😭 Low</td>
</tr>
<tr>
<td>Risk</td>
<td>🤔 Very Low</td>
<td>🤔 Very low</td>
</tr>
</tbody>
</table>
<h3 id="a-must-have-tool-for-investors">A must-have tool for investors</h3>
<p>In summary, money market funds have low investment costs, low risks, and high liquidity. The withdrawal of funds is far more convenient than time deposits. However, like time deposits, returns are not high and are affected by short-term interest rates and exchange rate fluctuations. Although money markets are probably not great as your primary investment product, especially for longer-term goals like retirement or financial freedom, they are very useful to store excess cash or to bring down the volatility of your investment portfolio. It&#8217;s safe to say it&#8217;s an essential tool in your investment toolbox.</p>


<single-action-item title="Futu Securities' MoneyPlus" subtitle="Learn more about Futu's MoneyPlus fund platform that allows investors to buy various funds with small amounts of capital." link="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiZnV0dV9zZWN1cml0aWVzIiwidHlwZSI6ImludmVzdG1lbnRfYnJva2VyIiwiYXBwbHlVcmwiOiJodHRwczovL3Bhc3Nwb3J0LmZ1dHU1LmNvbS9zZW0vaGs/bGFuZGluZ0lkPTMmY2hhbm5lbD02NDIiLCJmcm9tIjoiTW9uZXlNYXJrZXRGdW5kX0FydGljbGUifQ==" button_text="Learn more" lang="en" type="content"></single-action-item>


<hr>
<p>Depending on your goals, money market funds may not be the right choice for you. For longer term goals like retirement or financial freedom, you may want to invest more into stocks which may give higher return. Take the first step by comapring investment brokers to pick the one with the lowest fees: </p>


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<p><strong>Important information:</strong><br>
Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>

MoneyPlus, launched by Futu Securities, is one of the more popular fund platforms in Hong Kong. Investors open an investment account, but before deciding to buy any stock, they can deposit the idle funds into MoneyPlus and choose to invest in HKD or USD money market fund.

【Investment Tools】Introduction to Money Market Funds

<p><strong>Buying a stock</strong> is the first step towards investing. But before you can do that, you need to open a securities account. There&#39;s quite a lot of choice between banks and securities firms &#8211; so how do you choose? </p>
<p>Planto will help you compare the most popular Hong Kong stock accounts, show you their fees and share some basic knowledge about Hong Kong stocks to help you get off to a good start.</p>

<p><how-to-open-broker-section language="en"></how-to-open-broker-section></p>


<h2 id="comparison-of-hong-kong-stock-investment-account-fees">Comparison of Hong Kong stock investment account fees</h2>

<p><broker-comparison-page articlename="HK Stock Investing Article" country="HK" language="en"></broker-comparison-page></p>


<p><other-broker-comparison-page articlename="HK Stock Investing Article" country="HK" language="en"></other-broker-comparison-page></p>


<p>Trading with brokers is cheaper, opening an account can be done 100% online and the user experience of their apps is often better &#8211; there&#39;s no reason not to use them. </p>
<h3 id="how-much-do-you-save-by-investing-with-a-broker">How much do you save by investing with a broker?</h3>
<p>Assuming investors put HKD 20,000 each month to invest in stocks and trade on average five times a month. The mainstream banks would cost you ~ HKD 525 each month. If you use the securities brokers mentioned above, the monthly transaction fee is only about HKD 100 per month. </p>
<p>This difference of 425 HKD each month adds up really fast. <strong>In 10 years, it becomes HKD 51,000 in expenses (HKD 425 x 12 months x 10 years)!</strong></p>
<p>In fact, if you were to invest this difference with an annual return of 6%, <strong>you&#39;d be missing out on almost HKD 70,000!</strong> </p>
<p>Using a securities broker obviously reduces the fees &#8211; so even though trading with a bank offers some convenience and maybe even some extra credibility, it&#39;s hard to argue whether it&#39;s worth paying that much in fees for. Especially given these brokers are all regulated (licensed by the Securties and Futures Commission of Hong Kong) and are often successful businesses (like Futu which has even IPO&#39;ed)! </p>
<h2 id="hong-kong-stock-basics">Hong Kong stock basics</h2>
<p>After completing the opening of the investment account and depositing funds, technically you can start investing immediately. However, it&#39;ll serve you well to know the basics of stocks before making a trading decision.</p>
<h3 id="what-is-a-stock">What is a stock?</h3>
<p>A listed company issues shares to investors, and stocks are the evidence that investors own shares. After buying stocks, investors become shareholders of the company, can receive dividends, attend general meetings, and bear the risks caused by stock price fluctuations.</p>
<h3 id="hang-seng-index">Hang Seng Index</h3>
<p>The Hang Seng Index is an indicator of the performance of the Hong Kong stock market. It consists of 50 constituent stocks, mainly in the financial services, public, real estate and industrial and commercial sectors. The Hang Seng Index constituent stocks are often known as &quot;blue chip stocks&quot;.</p>
<h3 id="hong-kong-stock-trading-unit">Hong Kong stock trading unit</h3>
<p>Hong Kong stocks are traded on a per-lot basis &#8211; this translates to something like: &quot;one lot of shares X share price + handling fee&quot;. As an example, the MTR Corporation (00066) has 500 shares in one lot. If the stock price is HKD 45.1, the minimum amount you&#39;d have to invest is HKD 22,500 (1 lot x 500 shares x HKD 45.1).</p>
<h3 id="hong-kong-stocks-trading-fees">Hong Kong stocks trading fees</h3>
<p>In addition to the stock market price, the following fees must be paid to the Hong Kong Government, the Securities and Futures Commission or the Hong Kong Stock Exchange:</p>
<ul>
<li>Brokerage commission: Basically what the bank / securities firm is charging &#8211;  securities firms generally charge less tha banks</li>
<li>SFC transaction levy: 0.0027% of transaction amount</li>
<li>HKEX trading fee: 0.005% of transaction amount</li>
<li>Stock stamp duty:  0.1% of transaction amount</li>
<li>Trading system usage fee: HKD 0.5 per transaction (most firms exempt you from this fee, or charge separately!)</li>
<li>Central Clearing Shares Payment: 0.002% of the transaction amount (minimum HKD 2)</li>
</ul>
<h3 id="hong-kong-stock-trading-hours">Hong Kong stock trading hours</h3>
<p>The Hong Kong stock market trades on Mondays to Fridays (except public holidays) in the following periods:</p>
<table>
<thead>
<tr>
<th></th>
<th>Time</th>
</tr>
</thead>
<tbody><tr>
<td>Opening Session</td>
<td>9:00am &#8211; 9:30am</td>
</tr>
<tr>
<td>Morning Session</td>
<td>9:30am &#8211; 12:00pm</td>
</tr>
<tr>
<td>Lunch</td>
<td>12:00pm &#8211; 1:00pm</td>
</tr>
<tr>
<td>Afternoon Trading Session</td>
<td>1:00pm &#8211; 4:00pm</td>
</tr>
<tr>
<td>Extended Hours</td>
<td>4:00pm &#8211; 4:10pm</td>
</tr>
</tbody></table>
<h3 id="exchange-traded-funds-etf">Exchange Traded Funds (ETF)</h3>
<p><a href="https://www.planto.hk/en/blog/etf-explained">ETFs are funds that simulate an index</a> as an investment target, such as Tracker Fund (2800) which matches the performance of the Hang Seng Index. ETF-linked indices can cover single or cross-stock markets, commodities or even different asset classes.</p>
<h3 id="real-estate-investment-trusts-reits">Real Estate Investment Trusts (REITs)</h3>
<p><a href="https://www.planto.hk/en/blog/REITs-Introduction/">REITs are another investment vehicle</a> that primarily invest in real estate projects in Hong Kong, Mainland China or overseas. The main source of income comes from rent and the net earnings are mandated to be distributed back to shareholders. A list of REITs <a href="https://www.hkex.com.hk/Market-Data/Securities-Prices/Real-Estate-Investment-Trusts?sc_lang=en">can be found here</a>.</p>
<h3 id="robot-investment-advisor-robo-advisor">Robot Investment Advisor (Robo Advisor)</h3>
<p><a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend/">Robo advisors use algorithms to analyze</a> the client&#39;s investment objectives, risks and preferences, and develop a portfolio of investments. They often includes ETFs from Hong Kong, the US or around the world. The advantage of robo-advisors is that they are completely automated, so the fees and minimum investment thresholds are much lower than traditional human investment consultants.</p>

<p><single-action-item lang="en" button_text="Learn more" type="robo_comparison" title="If you need help making a portfolio, maybe a robo-advisor is right for you" subtitle=""></single-action-item></p>


<p><strong>Important information:</strong>
Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>
<h4 id="recommended-reading">Recommended reading</h4>
<ul>
<li><a href="https://www.planto.hk/en/blog/etf-explained/">[Investing for Beginners] Intro to ETFs (Exchange Traded Funds)</a></li>
<li><a href="https://www.planto.hk/en/blog/REITs-Introduction/">Introduction to REITs &#8211; a way to invest in real estate at a lower price</a></li>
<li><a href="https://www.planto.hk/en/blog/monthly-stocks-savings-plans/">[Investing For Beginners] Monthly Stocks Savings Plans</a></li>
<li><a href="https://www.planto.hk/en/blog/overcome-investophobia/">[Investing for Beginners]  Overcome investophobia with these 5 tips</a></li>
</ul>


Thinking of investing in the HK market? Planto will help you start by comparing fees for the most popular banks and securities firms, and give the pros and cons, including Futu Securities, 8securities, BOC, HSBC and Citibank.

[Investing for Beginners] Introduction to HK stocks – Banks vs Securities Firms Fee Comparison

<h2 id="what-is-an-etf-exchange-traded-fund">What is an ETF (Exchange Traded Fund)?</h2>
<p>ETFs (sometimes called index funds) are funds that track a certain benchmark (also known as an &#8216;index&#8217;) as an investment target. They are primarily passive in nature (which is not a bad thing!) and play a very important role in making your portfolio diversified.</p>
<p>The index that an ETF is linked to can cover single market or multiple markets, commodities, sectors or even asset classes! For example, the Hong Kong Tracker Fund (2800) tracks the Hang Seng Index which means it moves almost exactly the same as the Hang Seng Index (both upwards and downwards). Similarly, you also have index funds that track bonds, REITs and more!</p>
<h2 id="how-to-buy-etfs">How to buy ETFs</h2>
<p>Investing in ETFs is the same as buying and selling stocks since they are <strong>exchange traded</strong>. You set a purchase or sale during the market&#8217;s open hours and it&#8217;s executed (in mere minutes) rather than the time it takes for traditional mutual funds.. You&#8217;ll have to pay the same brokerage commissiosn and transaction fees but can avoid the stamp duty of 0.1%. ETFs do have their own fund management fees, but they are much lower than traditional funds (US ETFs often have management fees less than 0.2%, compared to traditional mutual funds that can be 1% or more).</p>
<h2 id="benefits-of-investing-in-etfs">Benefits of investing in ETFs</h2>
<ul>
<li><strong>High transparency</strong>: The index component and proportion of the ETF directly reflect the fund&#8217;s investment portfolio, and investors can easily understand its performance.</li>
<li><strong>Diversification</strong>: ETFs provide portfolios with diversification. For example, rather than picking one stock in the Hang Seng Index, you can invest into all 50 companies in the Hang Seng Index. This can reduce the risk of fluctuation in the market since you get exposure to not just one company, but multiple industries (e.g. financial services, real estate, tech, etc.) &#8211; and you just buy one ETF to achieve that.</li>
<li><strong>Low fees</strong>: The cost of buying and selling ETFs is similar to buying stocks, and management fees are much cheaper than traditional funds.</li>
<li><strong>Flexible management</strong>: ETF trading is the same as stocks so you can buy and sell very quickly and easily, compared to managing traditional funds (where you&#8217;re often charged a redemption fee as well!). So if your portfolio needs to change, you can adapt it easily.</li>
</ul>
<h2 id="where-to-buy-etfs">Where to buy ETFs</h2>
<ul>
<li>
<p><strong>Securities account</strong>: Like buying and selling general stocks, investing through securities firms or banks, with each lot as a trading unit.</p>
</li>
</ul>


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<ul><li><strong>Monthly stock investment plans</strong>: You can go for monthly stock plans and buy ETFs in fixed contributions each month. This can help you avoid the issue of large lot sizes and you get to make use of Dollar Cost Averaging.</li><li> <strong>In your MPF</strong>: If you have a MPF account, you can choose index funds e.g. Tracker Fund. </li><li> <strong>Robo-advisors</strong>: <a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend">Investment Robot Consultants</a> are also becoming very popular &#8211; they primarily use ETFs to construct their portfolios. They&#8217;re very easy to get started with and can tailor a plan for you depending on your goals and risk appetite. </li></ul>



<p><strong>Important information:</strong><br>Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>



<h4 id="related-reading">Related Reading</h4>



<ul><li><a href="https://www.planto.hk/en/blog/robo-advisor-compare-recommend">[Investing for Beginners] Robo-Advisors Comparison：Chloe by 8 Securities, Kristal.ai, Aqumon</a></li><li><a href="https://www.planto.hk/en/blog/term-deposit-latest-offers-comparison">The Best Time Deposit Plans in HK</a></li><li><a href="https://www.planto.hk/en/blog/mpf-asset-net-worth-fidelity">[MPF 101] MPF &#8211; Your hidden millions</a></li></ul>


ETFs (sometimes called index funds) are funds that track a certain benchmark (also known as an 'index') as an investment target. Learn more about why they should be part of your portfolio!

[Investing for Beginners] What are ETFs (Exchange Traded Funds)

<h2 id="what-are-reits">What are REITs?</h2>
<p><strong>REITs (Real Estate Investment Trust)</strong> are investment funds that invest primarily (75% or more of their assets) in real estate projects in Hong Kong or overseas, such as shopping malls, office buildings, hotels and serviced apartments, etc. They&#39;re often bought to provide steady income in a portfolio and get exposure to the real estate market. They&#39;re listed on the exchange so they&#39;re quite easy to buy and sell.</p>
<p>The main source of revenue for REITs comes from rent. As long as the REIT didn&#39;t make a loss, they are <strong>mandated</strong> by the SFC (Hong Kong Securities &amp; Futures Commission) to distribute 90% of their net income (income minus management expenses) as dividends to investors. This often makes the dividend yield of REITs quite attractive, especially in the Hong Kong market. </p>
<p>Not all REITs are equal though &#8211; their income can be affected by the location, type, quality of the properties held and the actual operation of the fund. Therefore, you have to consider a few things before picking a REIT:</p>
<h2 id="1-asset-distribution-hong-kong-vs-rest-of-the-world">1. Asset distribution (Hong Kong vs rest of the world)</h2>
<p>Although an REIT may be listed in Hong Kong, their assets can be distributed in different parts of the world. For example, Hui Xian REIT (87001) and Yuexiu REIT  (00405) hold properties mainly in the Mainland, and this can affect the return of the REIT. In addition, some REITs pay dividends in other currencies e.g. RMB so investors may face additional foreign exchange risk. Therefore, before investing, make sure you understand where the REIT&#39;s assets are mainly held and read about housing policies in that area, population density, currency exchange rate, etc., while selecting.</p>
<h2 id="2-property-types-held-potential-concentration-risk">2. Property types held (potential concentration risk)</h2>
<p>Although REITs mainly invest in real estate projects, there are several sub-categories of real estate: industrial buildings, office buildings, parking lots, houses, hotels, shopping malls, etc. The proportion of property types held by different trust funds can be high or low, but it is better to have a diversified holding. If an REIT relies on a single property type as the main source of income, when the operation or business of the project has adverse effects, or become less attractive to tenants, the fund&#39;s income will be greatly affected. So choose REITs that are diversified across different property types to reduce the concentration risk.</p>
<h2 id="3-market-conditions-political-situation--the-economy">3. Market conditions (political situation &amp; the economy)</h2>
<p>Since SARS in 2003, the property market in Hong Kong has been generally upwards, and the high property prices have made the return of REITs quite popular. However, before investing in REITs, do your homework to understand the rental rate, retention rate, rental income trends, etc. Sometimes it also pays to read more about the companies&#39; actual operations e.g. if a company is planning major renovations in some of its holdings, this could bring a short term expenditure (and thus a reduction in dividend) but may increase rent return after completion.</p>
<p>In addition, investors should look at the future plans and development direction of the REITs. If there is any acquisition or sale intention, this will affect the long-term potential. For example, it seems that Link (0823) has been selling Hong Kong assets in recent years, buying mainland assets, and thus the investment portfolio (and risk associated with it)will change. It has to be mentioned that Hong Kong&#39;s retail industry has recently been affected by the protests in Hong Kong and a large number of retail properties have been impacted &#8211; the stock market itself has fallen more than 15% in the past three months!</p>
<h2 id="reits">REITs:</h2>
<p>The HKEX has a list of REITs that are currently trading on the HK Exchange. <a href="https://www.hkex.com.hk/Market-Data/Securities-Prices/Real-Estate-Investment-Trusts?sc_lang=en">Click here</a> to see them.</p>

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</next-steps-list>


<p><strong>Important information:</strong>
Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>
<h4 id="related-reading">Related reading:</h4>
<ul>
<li><a href="https://www.planto.hk/zh/blog/overcome-investophobia/">[Investing for Beginners]  Overcome investophobia with these 5 tips</a></li>
<li><a href="https://www.planto.hk/en/blog/monthly-stocks-savings-plans/">[Investing For Beginners] Monthly Stocks Savings Plans</a></li>
</ul>


REITs (Real Estate Investment Trust) are investment funds that invest primarily (75% or more of their assets) in real estate projects in Hong Kong or overseas, such as shopping malls, office buildings, hotels and serviced apartments, etc. They're bought to provide steady income in a portfolio and get exposure to real estate

Introduction to REITs – a way to invest in real estate at a lower price

<p>The political and economic instability in Hong Kong has weighed on the city’s stock market. More Hong Kong investors are switching to higher-achieving US stocks among which ETFs are one of the most popular choices. </p>
<p>However, before opening a US stock account, there are a few rules that amateur investors must know. Read on learn the basics of the US stock market and have a fee comparison of the most commonly used US stock securities accounts in Hong Kong!</p>
<h2 id="minimum-fees-to-buy-us-stocks">Minimum fees to buy US Stocks</h2>
<p>Hong Kong stocks’ minimum trading unit is a “lot”, the number of shares in each “lot” usually ranges from 100 to 2,000. </p>
<p>Let’s say you want to buy HSBC Holdings (0005) stocks. They have a minimum lot size of 400 shares. If each share costs HKD 58, the minimum account of money to buy a lot of HSBC Holdings (0005) would be over HKD 23,000 (400 shares x HKD 58 plus transaction fees). </p>
<p>In the US, however, the minimum trading unit of US stock is a “share”. </p>
<p>Take Apple Inc. (AAPL) as an example, their stock price was around USD 220 (~HKD 1,716) in October 2019 so you could start investing with just HKD 1,716! </p>
<p>Because of this, generally, the minimum amount you need to invest into US stocks is much lower than Hong Kong stocks. </p>
<h2 id="fee-comparison-of-hong-kongs-most-popular-us-stock-accounts">Fee Comparison of Hong Kong’s most popular US Stock Accounts</h2>
<p>Buying US stocks is pretty easy in Hong Kong as most banks provide US stock accounts but <strong>the fees are MUCH lower if you buy it through securities firms</strong> or robo-advisors. </p>
<p>These transaction costs can add up really quickly, are easily avoidable and offer no value to an investor &#8211; so just pick the broker or company with the lowest costs (based on your trading habits). </p>

<p><broker-comparison-page articlename="US Stock Account Compare Article" country="US" language="en"></broker-comparison-page></p>


<p><other-broker-comparison-page articlename="US Stock Account Compare Article" country="US" language="en"></other-broker-comparison-page></p>


<p>Like we said, it&#39;s cheaper to start investing with a broker and you get a much better user experience.</p>

<p><how-to-open-broker-section language="en"></how-to-open-broker-section></p>


<h2 id="us-stock-exchange-fees-and-taxes">US Stock Exchange Fees and Taxes</h2>
<p>Apart from commissions and platform fees charged by banks and securities firms, investors will also be charged by US regulatory authorities. Yet, it is still generally cheaper than buying Hong Kong stocks. The main fees are as follows:</p>
<table>
<thead>
<tr>
<th><strong>Charged Items</strong></th>
<th><strong>Fees (in USD)</strong></th>
</tr>
</thead>
<tbody><tr>
<td>SEC Fee*</td>
<td>Adjusted seasonally, commonly varies from 0.00213% to 0.00218% of the transaction amount</td>
</tr>
<tr>
<td>Trading Fee</td>
<td>$0.003 per share</td>
</tr>
<tr>
<td>Transaction Fee*</td>
<td>$0.000119 per share</td>
</tr>
<tr>
<td>Dividend Tax Rate</td>
<td>30%</td>
</tr>
</tbody></table>
<p>*For sale trades only</p>
<h2 id="trading-hours-for-the-us-stock-market">Trading Hours for the US Stock Market</h2>
<p>The trading hours of the US stock market are different in winter and summer times. In summer, the trading hours are from 9:30pm to 4am in Hong Kong time. They are one hour late in winter &#8211; from 10:30pm to 5am in Hong Kong time.</p>
<h2 id="3-major-us-stock-indices">3 Major US Stock Indices</h2>
<p>Similar to how we have the Hang Seng Index (HIS) in Hong Kong, there are 3 major US stock indices which indicate the overall market performance in the US. </p>
<ul>
<li><strong>Dow Jones Industrial Average (DJIA)</strong> – Founded in the 19th century, it measures 30 listed companies including Coca-Cola (KO), Boeing (BA) and Goldman Sachs Group (GS).</li>
<li><strong>NASDAQ Composite (NASDAQ)</strong> – Founded in 1971, its 100 constituent stocks are mainly from IT, Telecommunication and Biotech sectors, including Google (GOOG), Apple Inc. (AAPL) and Microsoft (MSFT)</li>
<li><strong>S&amp;P 500 Index (S&amp;P 500)</strong> – Founded in 1957, its constituent stocks are more diversified, measuring 500 listed companies including Facebook (FB), Johnson &amp; Johnson (JNJ) and ExxonMobil (XOM)</li>
</ul>
<h2 id="pros-of-us-stock">Pros of US Stock</h2>
<ul>
<li><strong>They have lower entrance fees</strong>: The minimum trading unit of US stock is only a share! And the management fee is relatively cheap. You can start investing with less money.</li>
<li><strong>They offer more and better choices</strong>: Many of the world’s top companies chose to get listed in the US. You can easily find a quality stock of interest and there are more ETFs in the US too.</li>
<li><strong>You are exempt from profits tax</strong>: Americans are required to pay investment income tax but luckily Hong Kongers don&#39;t have to! Just fill out the W-8BEN form (most securities firms will help you with this!) and declare you’re a foreigner when you open a US stock account and you’re exempt from the tax. </li>
<li><strong>They are highly regulated and transparent</strong>: The US regulatory authorities put a lot of effort into combating insider trading, market manipulation, financial fraud, etc. so its market transparency is high.</li>
</ul>
<h2 id="cons-of-us-stock">Cons of US Stock</h2>
<ul>
<li><strong>The time difference</strong>: The opening of the US stock market is at night in Hong Kong. It could be hard for Hongkongers to stay close to the market. If you’re following a long term strategy, then it’s not too big a deal though!</li>
<li><strong>The exchange rate</strong>: As US stocks are traded in USD, investors must pay attention to the currency conversion cost.</li>
<li><strong>More expensive monthly stock investment plans</strong>: Investors have to pay for administrative fees of about 5% of contribution in monthly stock investment plans which makes it very hard to justify! Although, since the entry cost for US stocks is much lower, you may not need a stock investment plan at all. You could just buy a few shares of various ETFs to get a diversified portfolio! </li>
<li><strong>High dividend tax rate</strong>: The US dividend tax is 30% which might weaken the returns on dividend investing.</li>
</ul>
<p>(Banks and securities firms’ fees and service information are for reference only. Actual charges depend on in-time information provided by banks and securities firm.)</p>

<p><single-action-item 
    title="Invest in US ETFs with a Robo-advisor"
    subtitle="Robo-advisors can create your US stock portfolio using AI, and you can start with as low as HKD 500!" 
    button_text="Learn more" 
    lang="en"
    type="robo_comparison"></single-action-item></p>



Is it better to open a US stock account to invest? We compare the fees of different banks & brokers include 8securities, Futu, Bank of China, HSBC, Citibank and other banks, introduce the US stock market to help new-comers start investing in US stocks.

[Investing for Beginners] Introduction to US Stock and Securities Account Fee Comparison

<p>Investing with your own money for the first time is nerve-wrecking — what if the market goes down? When do you stay on-course and when do you cut your losses? What if you end up losing money? </p>
<p>News flash: these fears are normal. Even the most seasoned investors were once just as anxious as you are now. </p>
<p>The five principles below will get you started on the trade:</p>
<h2 id="1-define-your-goals-short-medium-or-long">1. Define your goals (short, medium or long)</h2>
<p>Investment should not be an aimless game for bigger numbers but a tool to get what you want in life. Know your objectives well, so you can plan your investment strategy accordingly. How much you invest and the risk you are willing to take should fit your goals, not the other way round.</p>
<p>This is called your &quot;time-horizon&quot; and it&#39;s probably one of the most important factors when deciding what to invest in.</p>
<p>First, an example of a short term goal: a travel trip or a new phone within a year. The riskier way to go about is short-term or day trading in the stock market; the safer way is a fixed term deposit with a high interest rate or a money market fund. </p>
<p>The mid and long term goals are the life-changing ones — your first home’s down payment, emigration plan, children’s college fund, etc. These require — and deserve — more time and thoughts in planning. Putting your life goals on hold is no good so make sure you&#39;re building a diversified portfolio and investing regularly to mitigate your own risk.</p>
<p>One more thing: review often how achievable your goal is. Chasing unrealistic riches like a conquistador looking for El Dorado will get you nowhere.</p>
<h2 id="2-watch-your-daily-balance">2. Watch your daily balance</h2>
<p>You end up with what you have not spent. The less expensive your lifestyle is, the more you have to add to your investment fund every month.</p>
<p>Today onwards, try to record your daily expenses to understand your spending behaviour. You may find that the daily $30 coffee for the past year could have been one lot of China Construction Bank (00939) shares in your portfolio. Of course, living a life you don&#39;t enjoy wouldn&#39;t be healthy or sustainable either, so don’t go overboard with cutting costs and pruning your lifestyle.</p>
<h2 id="3-always-be-learning">3. Always be learning</h2>
<p>Many beginners hesitate in fear of failure, missing chances upon chances; others enter the market without a proper strategy or mentality and overreact to irrelevant market fluctuations. Investing is not rocket science, but it’s not child’s play either. Start reading financial news and books, and get familiar with common jargons like “blue chip stocks”, “utility stocks”, “index fund”, “price-to-earning ratio”, etc. Analyses and commentaries are also a great resource to gain a deeper understanding on the movements of markets and individual stocks. </p>
<p>With knowledge comes the ability to identify right investment decisions and the confidence to make them. </p>
<h2 id="4-keep-calm">4. Keep calm</h2>
<p>Unless you are an AI investment bot, be prepared for moments of impulse, waver and doubt.. especially when the market appears to be going down! </p>

<p><single-action-item 
    title="In case you are looking for an AI investment bot..."
    subtitle="Robo-advisors can take the thinking out of investing - compare them now" 
    button_text="Learn more" 
    lang="en"
    type="robo_comparison"></single-action-item></p>


<p>Your rationality must prevail. A part of you will want unrealistic gains but it&#39;s important to be realistic and think about your goals first. As long as you have a diversified portfolio and are taking your goal&#39;s time horizon into account, you&#39;ll be fine!</p>
<h2 id="5-prepare-for-rainy-days">5. Prepare for rainy days</h2>
<p>Not everything goes according to plan. Unanticipated unemployment and medical expenses will cost you. Without an emergency fund, you may need to prematurely cash out on the investment you have made, taking a toll on your lifestyle and the grander plan for the future. It is highly recommended to reserve at least six months’ worth of living expenses in cash, and top it off with accident, medical and other insurances as you see fit. Remember to always keep a card up your sleeve as you can&#39;t be sure what the future holds.</p>
<h2 id="ready-to-start-investing">Ready to start investing?</h2>

<p><broker-comparison-page articlename="Overcome Investophobia Article" country="HK" language="en"></broker-comparison-page></p>



<hr>

<next-steps-list lang="en">
    <next-steps-list-item type="content" link="https://www.planto.hk/en/blog/monthly-stock-investment-plan-compare" title="Compare monthly investment plans" subtitle="We make it simple to find the best monthly stock investment plan across banks and investment brokers"></next-steps-list-item>
    <next-steps-list-item type="robo_comparison" title="Read about robo-advisors" subtitle="Find an automated investment advisor that will help you get started growing your wealth"></next-steps-list-item>
</next-steps-list>
 


Investing can be scary to start - use these 5 tips to overcome investophobia and begin your journey into investing.

[Investing for Beginners]  Overcome investophobia with these 5 tips

<p>Housing prices in Hong Kong have been skyrocketing for many years now and show little signs of stopping. Bad for potential buyers but <a href="https://www.planto.hk/en/mortgage-home/">fantastic for homeowners looking to cash out on some of their investments early.</a> Although banks have been cutting their cash rebates, starting with HSBC in June, <a href="https://www.planto.hk/en/mortgage-home/">mortgage refinancing</a> can still be a great idea with the right plan. </p>
<p>Here&#39;s 7 benefits of refinancing:</p>
<h2 id="1-cash-out-for-more-capital">1. Cash-out for more capital</h2>
<p>The housing market has its ups and downs in the short term, but generally, home-buyers from a few years ago have seen a rise in their properties’ market value. Take Taikoo Shing, the definitive middle class housing estate, as an example. According to Midland Holdings’ data, the price has jumped from $14k / sq. ft. in July 2016 to $21k / sq. ft. in July 2019 (a whopping 50% increase in three years)! </p>
<p>With mortgage refinancing, the gain in property value can be realised in cash. As mortgage rates are generally lower than those of personal loans, homeowners can obtain a sizable capital for investments elsewhere with a much lower interest rate. This is actually one of the biggest motivations to remortgage.</p>
<h2 id="2-the-cash-rebate-itself">2. The cash rebate itself</h2>
<p>For some, there may not be a need for investment capital, but some extra cash is always welcome. Some banks offer up to 2% cash rebate on mortgage refinancing. That’s $70k for a $3.5m property, enough for a few monthly instalments, a small-scale renovation, or a lavish European ski trip. </p>
<h2 id="3-a-better-interest-rate">3. A better interest rate</h2>
<p>Competing banks often lead to competitive rates. While the HIBOR and prime rate have been hovering steadily over 2%, mortgage plan from certain banks can offer interest rates as low as 1.68% which can lead to huge savings over time!</p>
<h2 id="4-a-mortgage-linked-account">4. A Mortgage-Linked account</h2>
<p>A mortgage-linked account is another powerful reason to refinance. These are savings account where the interest rate matches the mortgage rate. Essentially any money put in this account will be reducing the amount of interest you pay on the loan, and is way better than your usual savings account or time deposits!</p>
<h2 id="5-to-get-the-mortgage-guarantor-off-the-hook">5. To get the mortgage guarantor off the hook</h2>
<p>Many home-buyers have their family members or relatives as their mortgage guarantors. While this move helps immensely in passing the stress test, it also puts the guarantor’s own credit status in a tough spot. If the homeowner’s income has since improved past what the stress test demands, it may be courteous to take the guarantor’s name off to free up their credit capacity.</p>
<p>This is a simple trick quite widely used by couples and families — the first purchase is made with one of the partners as the owner and the other as the guarantor; a few years down when they go for the second property, their roles switch. This way, they can acquire their two residences without incurring the punishing double stamp duty (DSD).</p>
<h2 id="6-cut-costs-on-mortgage-insurance">6. Cut costs on mortgage insurance</h2>
<p>Insurance is mandatory when taking out a mortgage loan amounting to over 60% of the property value. Take the case of a $4m property owner who has taken out a loan of $2.8m (70% of property value). Say, the owner refinances the mortgage after the property’s worth has risen to $5m. The loan amount would then be under 60% 0f the total property value, giving the homeowner a pass from the mortgage insurance.</p>
<h2 id="7-reduce-monthly-payments">7. Reduce monthly payments</h2>
<p>While a lot of homeowners look to leverage on the property for more loan at a low interest rate, mortgage refinancing is not only for debt creation. A refinancing can result in a longer loan repayment period with the same loan amount, relieving the monthly burden of the owner. Do keep in mind, that a prolonged repayment plan may mean more interest paid over the course of the period.</p>
<p>We&#39;ve built a calculator to help you figure out how much you could save from refinancing or how your monthly payments would be affected, try it out! </p>

<p><refinancing-calculator calculator_name="mortgage-refinance-benefits-Refinancing-Calculator" language="en"></refinancing-calculator></p>


Thinking of refinancing? Property prices in Hong Kong have hit record highs and it's becoming common to refinance your property for cash outs or to get cash rebates. Choosing the right plan can help you save a lot of money. Planto has outlined the 7 biggest benefits。

7 Big Benefits of Refinancing

<p>Apple introduced three new iPhones this year &#8211; the <strong>iPhone 11, 11 Pro</strong> and <strong>11 Pro Max</strong>. The upgraded features include ultra-wide-angle lens, night mode and 4K 60fps video recording&#8230; and they&#8217;re pretty expensive!</p>
<p>It goes without saying that you should ideally have saved up for this but if you&#8217;re dead set on buying, we&#8217;ve done some hard work in figuring out how you can save the most money.</p>
<p><strong>In short:</strong></p>
<ol>
<li>Do <strong>NOT</strong> buy with cash</li>
<li>Use either the <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiY2l0aV9jYXNoX2JhY2siLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vYWQuZG91YmxlY2xpY2submV0L2RkbS90cmFja2Nsay9ONzE5NTc2LjM3NTQzNTVQTEFOVE8vQjIyMTM5NDg3LjI2NzU5MDAxNTtkY190cmtfYWlkPTQ2MjU3MjE1MztkY190cmtfY2lkPTExMDY2NTk1MjtkY19sYXQ9O2RjX3JkaWQ9O3RhZ19mb3JfY2hpbGRfZGlyZWN0ZWRfdHJlYXRtZW50PTt0ZnVhPSIsImZyb20iOiJpUGhvbmVfMTFfQXJ0aWNsZSJ9">PrimeCredit EarnMORE UnionPay Card</a> or the <a href="https://www.planto.hk/en/redirect/?params=eyJwcm9kdWN0IjoiY2l0aV9jYXNoX2JhY2siLCJ0eXBlIjoiY2MiLCJhcHBseVVybCI6Imh0dHBzOi8vd3d3LmNoaW5lc2Vhbi5jb20vYWZmaWxpYXRlL2NsaWNrQmFubmVyLmRvP3dJZD02Mzc3NSZwSWQ9MTcyMzEmY0lkPTI4ODg3IiwiZnJvbSI6ImlQaG9uZV8xMV9BcnRpY2xlIn0=">Citibank Cash Back card</a> (if you don&#8217;t have these cards already!)</li>
</ol>
<h3 id="primecredit-earnmore-unionpay-card-x-cmk-save-up-to-2150">PrimeCredit EarnMORE UnionPay Card x CMK: save up to $2,150</h3>
<p>PrimeCredit has a<a href="https://www.wewacard.com/cmk-promotion/"> deal with CMK</a> where you get between $300-$1100 cash rebate depending on how much you spend. Note: this assumes you are a new customer for PrimeCredit (making you eligible for the welcome offer and 2% cash rebate).</p>
<table>
<thead>
<tr>
<th>iPhone Model</th>
<th>Retail Price</th>
<th>Calculation</th>
<th>Total</th>
</tr>
</thead>
<tbody>
<tr>
<td><strong>iPhone 11 128GB</strong></td>
<td>$6,500</td>
<td>$300 CMK offer<br />+ $500 EarnMORE Welcome Offer (but you&#8217;ll need to spend another $2,000 in 3 month from card issuance date)<br />+ $300 for successful application via Planto<br />+ $130 due to 2% cash-back = <strong>$1,230 cash rebate</strong></td>
<td><strong>19% off</strong></td>
</tr>
<tr>
<td><strong>iPhone 11 Pro 256GB</strong></td>
<td>$9,900</td>
<td>$700 CMK offer<br />+ $500 EarnMORE Welcome Offer<br />+ $300 for successful application via Planto<br />+ $198 due to 2% cash rebate = <strong>$1,698 cash rebate</strong></td>
<td><strong>17% off</strong></td>
</tr>
<tr>
<td><strong>iPhone 11 Pro Max 256GB</strong></td>
<td>$12,500</td>
<td>$1,100 CMK offer<br />+ $500 EarnMORE Welcome Offer<br />+ $300 for successful application via Planto<br />+ $250 due to 2% cash rebate = <strong>$2,150 cash rebate</strong></td>
<td><strong>17% off</strong></td>
</tr>
</tbody>
</table>


<p><credit-card-comparison-page language="en" creditcardtype="cash_rebate" particularcard="primec_earnmore_diamond"></credit-card-comparison-page></p>


<h3 id=""> </h3>
<h3 id="citi-cash-back-visa-card-x-fortress-save-up-to-hk1675">Citi Cash Back Visa Card x Fortress: save up to HK$1,675</h3>
<p>Similar to the PrimeCredit offer, Citibank has a <a href="https://www.citibank.com.hk/english/credit-cards/shopping/promotion-fortress.html">deal with Fortress</a> where you get between $150-$500 off depending on how much you spend. Do note this is only for the first 35,000 card-holders to avail this offer (Citibank hasn&#8217;t disclosed how many have already been availed!). Also note that this assumes you are a new customer for Citibank (making you eligible for the welcome offer)</p>
<table>
<thead>
<tr>
<th>iPhone Model</th>
<th>Retail Price</th>
<th>Calculation</th>
<th>Total</th>
</tr>
</thead>
<tbody>
<tr>
<td><strong>iPhone 11 128GB</strong></td>
<td>$6,500</td>
<td>$300 Fortress offer<br />+ $1,000 Citi Welcome Offer (but you&#8217;ll need to spend another $3,500 in 2 months)<br />+ $50 if you use Apple Pay<br />+ $65 due to 1% cash-back = <strong>$1,415 cash-back</strong></td>
<td><strong>22% off</strong></td>
</tr>
<tr>
<td><strong>iPhone 11 Pro 256GB</strong></td>
<td>$9,900</td>
<td>$400 Fortress offer<br />+ $1,000 Citi Welcome Offer (but you&#8217;ll need to spend another $100 in 2 months)<br />+ $50 if you use Apple Pay<br />+ $99 due to 1% cash-back = <strong>$1,549 cash-back</strong></td>
<td><strong>15% off</strong></td>
</tr>
<tr>
<td><strong>iPhone 11 Pro Max 256GB</strong></td>
<td>$12,500</td>
<td>$500 Fortress offer<br />+ $1,000 Citi Welcome Offer<br />+ $50 if you use Apple Pay<br />+ $125 due to 2% cash-back = <strong>$1,675 cash-back</strong></td>
<td><strong>13% off</strong></td>
</tr>
</tbody>
</table>
<p>Besides the above, you can also get an extra $100 if you buy through Fortress&#8217; eShop by paying with points to offset $200 of spending &#8211; but that&#8217;s a bit complicated. We think it&#8217;s better to keep it simple.</p>


<credit-card-comparison-page language="en" creditcardtype="cash_rebate" particularcard="citi_cash_back"></credit-card-comparison-page>


<h4 id="recommended-reads">Recommended Reads:</h4>
<ul>
<li><a href="https://www.planto.hk/en/blog/credit-card-compare-recommend/?utm_source=plantowebsite&amp;utm_medium=websiteblog&amp;utm_campaign=iphone-11-pro-Max-credit-cards">Best Credit Cards for You in Hong Kong</a></li>
<li><a href="https://www.planto.hk/en/blog/expense-tracking-budgeting-101/?utm_source=plantoawebsite&amp;utm_medium=websiteblog&amp;utm_campaign=iphone-11-pro-Max-credit-cards">Budgeting with Planto</a></li>
<li><a href="https://www.planto.hk/en/blog/mpf-tdf-dis-compare/?utm_source=plantowebsite&amp;utm_medium=websiteblog&amp;utm_campaign=iphone-11-pro-Max-credit-cards">MPF Simple Strategy &#8211; Target Date Fund (TDF) and Default Investment Strategy (DIS)</a></li>
</ul>

Which credit card gives you the most cash rebates when you buy an iPhone 11 / Pro / Pro? Find out how you can save more than HK$2,000!

The smartest way to buy the new iPhone

<p>Both TDF and DIS are MPF products that automatically adjust their asset distribution as time goes by. Regardless of which one you opt for, its strategy will put a heavy focus on higher risk investments in the early stages, and shift to holding relatively safe bonds and cash in the late game. But this is where the similarities end.</p>
<p><strong>TDF</strong> is a mixed assets fund with a portfolio composed mainly of stocks, bonds and cash. Let’s look at Fidelity’s SaveEasy 2040 Fund (the number suggests the year of retirement). As the target date draws closer, the investment portfolio will adjust itself &#8211; less stocks and other adventurous ventures, more bonds and cash holdings.</p>
<p><strong>DIS</strong> is the default MPF option in any MPF schemes as ruled by the Mandatory Provident Fund Schemes Authority (MPFA). One can see it as the vanilla choice, made up of the Core Accumulation Fund (CAF) and the Age 65 Plus Fund (A65F). You will have invested in CAF before the age of 50; after which the holdings will automatically shift towards A65F until age 64.</p>
<p>While TDFs and DISs from different MPF trustees have their own unique perks, here is a general comparison between the two products: </p>

<p><dis-tdf-table language='en'></dis-tdf-table></p>


<p>If you ever feel too overwhelmed at work, or don’t feel like spending the effort to learn and manage yet another financial product, these two automated MPF plans are for you! Once committed, the entire investment process will be executed and finished by your trustee, so you are set on your career-long MPF investment plan without lifting a finger. TDF and DIS are not called the “funds for slackers” in town for nothing.</p>
<h4 id="performance-and-fees">Performance and fees</h4>
<p>Your highest concern is rightfully on the fares and how well your MPF fares. Fret not, for we at Planto have aggregated the vast swathes of market data below, so you can compare TDF and DIS performances according to your age and target retirement year.</p>
<h2 id="funds-comparison-target-date-funds-tdf">Funds Comparison: Target Date Funds (TDF)</h2>

<p><target-date-fund-table language="en"></target-date-fund-table></p>


<h2 id="funds-comparison-default-investment-strategy-dis">Funds Comparison: Default Investment Strategy (DIS)</h2>

<p><dis-fund-table language="en"></dis-fund-table></p>


<h2 id="3-moves-to-reorganise-your-mpf">3 moves to reorganise your MPF</h2>
<p>If you are looking into restructuring your MPF portfolio and partitioning it to TDF, DIS or other MPF funds, here are three ways to do it:</p>
<ol>
<li>Instruct your MPF trustee (or your agent) to adjust your investment portfolio</li>
<li>Combine your MPF accounts and entrust it to one trustee for investment management</li>
<li>Open a tax deductible voluntary contributions (TVC) account to invest with the benefit of tax deduction</li>
</ol>

<p><banner-ad partner="FIDELITY" language="en"></banner-ad></p>


<p><strong>Disclaimer</strong>: Fund information is obtained from MPFA&#39;s MPF fund platform updated as of 31 July 2019. Fund expense ratios are latest information based on scheme providers&#39; fact sheets.</p>


Target Date Fund (TDF) and Default Investment Strategy (DIS) are both MPF products that automatically adjust investment strategy to fit your retirement plans, best suited for you who have no time to spare for your MPF portfolio. Compare the two MPF plans here!

Target Date Fund (TDF) and Default Investment Strategy (DIS)

<p>Wealth is the accumulation of your everyday effort. Renowned English journalist, Caroline Frost, had to take out a hefty loan to finish her master’s degree. Determined to pay off the debt as soon as possible, she made five changes in her everyday grind, and successfully saved $42,700 (HKD, applied to all amounts below) all within a year. Read on to know how she did it! This content is brought to you by <a href="https://www.moneysmart.hk/en">Moneysmart</a>. </p>
<h2 id="prep-lunches--20k-saved">Prep lunches — $20k saved</h2>
<p>$133 was how much Caroline used to spend on lunch and dessert everyday. After switching to homemade salad, fruits, yoghurt and cheese, she was able to cut her lunch expense down to $265 per week. Persisting through the year, this saved her a whopping $20,014.</p>
<p>If you work in one of the typical business districts of Hong Kong, you are hard-pressed to find an eatery that will serve a meal for below $50. That’s $18,250 around the year, and you can easily save a large chunk of it by preparing your own lunches.</p>
<h2 id="quit-coffee--10k-saved">Quit coffee — $10k saved</h2>
<p>A Starbucks coffee is a morning routine to many. Mediocre taste aside, it was also a $41-a-day habit for Caroline that gave her nothing but a caffeine addiction. By cutting store-bought coffee altogether, she saved herself $10,458.</p>
<p>For the unrelenting coffee lovers, Nespresso is a great alternative. At $988 for the base machine (and this is just its regular price) and around $3.5 per pod, your investment pays for itself after just 27 servings of the concentrated brain fuel!</p>
<p>Bubble tea is another staple for many HKers in recent years. Averaging at $30 a cup (and 300kcal if you care), you would save yourself a lot of silver and guilt by exploiting your office pantry’s dusted teabags instead.</p>
<h2 id="walk-to-work--10k-saved">Walk to work — $10k saved</h2>
<p>Caroline used to spend $630 a week on public transport. She was able to cut her weekly transport fares down to $438 by changing her daily commute routine, i.e. get out two metro stations early and walk to the office. This healthy switch saved her $9,984 over 12 months.</p>
<p>Understandably, the bustling tempo of this city might not allow such leisure. But fret not, with an abundance of regular <a href="https://www.planto.hk/en/blog/transportation-saving-tips">commuter offers from KMB and MTR</a>, as well as the Public Transport Fare Subsidy Scheme, shedding transport expenses is a walk in the park.</p>
<h2 id="switch-to-cheaper-hair-products--15k-saved">Switch to cheaper hair products — $1.5k saved</h2>
<p>Caroline has always preferred upmarket brands when it comes to shampoo and hair conditioner, but things got hairy for her wallet when each bottle cost her at least $85. A simple search in the drugstore netted her quality substitutes at $25 per bottle, saving her around $1,500 across the year. </p>
<p>In fact, the difference in quality of non-medical hair products is often negligible between brands. Check out the Consumer Council’s reports to get the biggest bang for your buck.</p>
<h2 id="cancel-your-subscriptions--744-saved">Cancel your subscriptions — $744 saved</h2>
<p>Caroline had a monthly subscription of Vanity Fair. It was certainly a shame that the coffee table of her apartment would look less posh, but cancelling the subscription plan saved her $744 for the rest of the year. </p>
<p>With the subscription model so prevalent these days (streaming services, loot crates, newspapers and magazines, etc.), the least we can do is to find that one underused service and cut it out of our life. </p>
<p>(This article is sourced from this original publication with permission from <a href="https://www.moneysmart.hk/en">MoneySmart</a>. Translations have been made by Planto.)</p>
<h2 id="tip-track-analyse-and-control-your-expenses-in-one-app"><strong><em>Tip: Track, Analyse and Control Your Expenses in One App</em></strong></h2>
<p><img src="https://cms.planto.io/wp-content/uploads/2019/12/group-5.jpg" alt=""></p>
<p>One of the standout functions of Planto, an integrated finance management app, is to <a href="https://www.planto.hk/en/blog/expense-tracking-budgeting-101/?utm_source=plantoawebsite&amp;utm_medium=websiteblog&amp;utm_campaign=LifestyleChangestoSave40k">help you control your expenses through smart budgeting</a> and reminding you of your subscriptions. Make better financial decisions with your consumption habits in the palm of your hand. <a href="https://www.planto.hk/en/?shortlink=4d696cd7&amp;pid=Blog%20-%20Text%20Link&amp;is_retargeting=true">Click here to download Planto</a>.</p>
<p><strong>Recommended Reads:</strong></p>
<ul>
<li><a href="https://www.planto.hk/en/blog/credit-card-compare-recommend/?utm_source=plantowebsite&amp;utm_medium=websiteblog&amp;utm_campaign=LifeStyleChangestosave40k">Best Credit Cards for You in Hong Kong</a></li>
<li><a href="https://www.planto.hk/en/blog/expense-tracking-budgeting-101/?utm_source=plantoawebsite&amp;utm_medium=websiteblog&amp;utm_campaign=LifestyleChangestoSave40k">Budgeting with Planto</a></li>
<li><a href="https://www.planto.hk/en/blog/mpf-tdf-dis-compare/?utm_source=plantowebsite&amp;utm_medium=websiteblog&amp;utm_campaign=LifeStyleChangestosave40k">MPF Simple Strategy &#8211; Target Date Fund (TDF) and Default Investment Strategy (DIS)</a></li>
</ul>


5 Lifestyle Changes To saving 40k a year. Wealth is the accumulation of your everyday effort. Determined to pay off the debt as soon as possible, she made five changes in her everyday grind, and successfully saved $42,700 (HKD, applied to all amounts below) all within a year. 

5 Easy Lifestyle Changes To Save 40K A Year


<p>Starting to invest in the Hong Kong market is hard because of lot size restrictions &#8211; essentially rather than buying one share, you&#8217;ll need to buy 100, 500 or more shares (depending on the stock) which raises the minimum amount required to invest!</p>



<p><strong>(<a href="#comparison-table">If you want to jump straight to the comparison, click here</a>)</strong></p>



<p>As an example, if you wanted to buy <strong>MTR Corporation</strong> (0066.HK) stocks:</p>



<ul><li>Their lot size is <strong>500 shares</strong>, and each share costs <strong>$45.1</strong></li><li>500 shares x $45.1 = $22,550 plus transaction fees</li><li>In order to invest in just MTR, <strong>you would need to invest at least $22,550 </strong></li></ul>



<p>making it inaccessible for most beginner investors and very expensive to build a diversified portfolio!</p>



<p>One of the financial products offered by banks and brokerages to solve this problem is the <strong>Monthly Stock Investment Plan</strong></p>



<h2 id="the-monthly-stock-investment-plan">The Monthly Stock Investment Plan</h2>



<p>When you enroll in a Monthly Stock Investment Plan, you commit to investing a fixed amount each month, and you choose which stocks you would like to purchase with this amount. The bank / broker will allow you to skip the lot size restriction when this happens.</p>



<p>The thing you need to be aware of the most is the fees involved &#8211; if you&#8217;re investing a small amount each month and paying a fixed fee, the costs can add up dramatically</p>



<p>e.g. investing $1,000 a month with a $50 min. fee means <strong>you&#8217;re paying 5% in fees each month</strong>!</p>



<h2 id="comparison-table">Fee Comparison between Selected Banks and Securities Firms</h2>



<monthly-investment-plan-comparison-table language="en"></monthly-investment-plan-comparison-table>



<p>(Actual charges depend on in-time information provided by banks and securities firm.)</p>



<h2><span style="color: inherit; font-family: 'Inter var', -apple-system, BlinkMacSystemFont, 'Helvetica Neue', Helvetica, sans-serif; font-size: 48px; font-weight: bold; letter-spacing: -0.0415625em;">Advantages of Monthly Stock Investment Plans</span></h2>



<ul><li><strong>Dollar Cost Averaging (DCA)</strong>: Each month when you contribute a fixed amount, the amount of shares you are able to afford will change. E.g. if the stock price increases, you will buy less of it. If the stock price decreases, you will buy more of it. This leads to lower volatility (aka your portfolio will move up and down less)!</li><li><strong>Forced to save each month:</strong> Your contributions to the monthly investment plan will be deducted from your account automatically each month so you&#8217;ll be forced to save!</li><li><strong>Less stress</strong>：Once you pick your stocks, you contribute automatically and there&#8217;s no &#8216;picking&#8217; of stocks required after that. As long as you built a diversified portfolio, you should be good to go!</li><li><strong>Lower entrance fee</strong>：You can start investing with as little as $500 per month &#8211; although you may want to be careful of the fees!</li><li><strong>Credit card points</strong>：Some banks actually accept the monthly contribution via credit card (although at a slightly worse rate). <a href="https://www.planto.hk/zh/blog/credit-card-compare-recommend">See some recommendations here</a>.</li></ul>



<h2 id="how-to-start-a-monthly-stock-investment-plan">How to Start a Monthly Stock Investment Plan</h2>



<ol><li>Open an account at a bank or a securities firm</li><li>Choose one or more stocks</li><li>Set your monthly fixed contribution sum</li></ol>



<h2 id="simple-example-of-a-monthly-stock-investment-plan">Simple Example of a Monthly Stock Investment Plan</h2>



<p>Bob pays $10,000 per month to buy Stock A.</p>



<figure class="wp-block-image"><img src="https://cms.planto.io/wp-content/uploads/2019/12/monthly-stock-example_en.png" alt="Monthly Stock Investment Plan Example"/></figure>



<p>With the benefits of Dollar Cost Averaging (DCA), Bob bought more shares when share price was lower and fewer shares when share price was higher, thus successfully reducing the volatility in his portfolio (and ensuring he doesn&#8217;t panic when stock prices go down)!</p>



<h2 id="things-to-note">Things to Note</h2>



<p>Before you settle for the regular stock savings plan, there are a few things you might want to take a look at:</p>



<ul><li><strong>Do you have sufficient back-up savings?</strong> It is recommended to have 3 months’ worth of savings enough to sustain both your investment contributions and living expenses so that you would not need to put a stop to the savings plan unwillingly when unplanned events come up.</li><li><strong>Wisely choose your stocks:</strong> Blue-chip stocks and Exchange-Traded Funds (ETF) are relatively less risky. It is not recommended to choose a stock that might surge and sink in short time. In general, the stock options provided by banks are relatively safe ones.</li></ul>



<ol><li><strong>Be prepared that it is a long term hold:</strong> Avoid selling in a short time when you observe some market fluctuations. Choose a stock you are willing to invest in for a longer time because this investment strategy is at its best performance over a long term investment period.</li><li><strong>Re-invest your dividends:</strong> A lot of blue-chips and or index funds pay out dividends regularly. It is recommended to further invest using the dividends to maximize the return with the perks of compound interest.</li><li><strong>Be aware of odd lots:</strong> Since monthly stock investment plans allow you to buy &#8216;less&#8217; than a lot, it also means it&#8217;s harder to sell these so they may sell for less than the market price.</li></ol>



<h2 id="an-alternative">An Alternative</h2>



<p>Monthly Stock Investment Plans have some very clear disadvantages: the fees can be quite high, your choice of stocks are limited and there&#8217;s no guidance whatsoever.</p>



<p><single-action-item title="Compare robo-advisors" subtitle="Low fees, expertly managed, guidance in building a portfolio and an overall great way to start investing." button_text="Learn more" lang="en" type="robo_comparison"></single-action-item></p>


Compare bank and brokers' monthly stock investment plans - fees, stocks available, min. investment amount, and more to find the best one for you including  BOC, HSBC, Hang Seng, Citibank.