Financial tips for millennials from HSBC: When to start investing, how to save money and build a legacy
Here's a constant goal we work towards everyday: We make money. But what most of us in our 20-30 somethings don't seem to think more of is, "How do we grow our wealth?". There's good reason for it — after all we go through the daily motions of sedentary jobs, monthly paychecks, and incessant workplace politics just so we can spend and savour our earnings on good grub and drinks, exploring a new destination in the world, or perhaps pooling it for that BTO.
Very recently, HSBC's The Enrich List was created to offer carefully curated experiences for HSBC Jade's customers — a tier that boasts of a team of experts to help their clients manage and grow their wealth. The Enrich List moves past the idea of just material wealth and instead, provides experiences that motivate their clients to improve their well-being as well as living a more purposeful life.
But first, how do we get to attaining a fountain of wealth? We're talking actual bills. Head of Customer Proposition and Marketing, Alice Fok shares her two cents.
In your opinion, how do millennials manage money and personal growth? Does it go hand-in-hand?
That's a very interesting question. We have done some research for millennials and found that instead of asking "How do I grow my career?", they ask "What's the purpose?". This plays a part in identifying a company or career for them. Even for investments, they are looking into things like green financing — whether the company they want to invest in supports sustainability. Because they care about leading a purposeful life, apart from just dollars and cents.
With regards to investment, how or when would be the right time for us to start?
I would say start young. As a bank, we provide some of the supporting tools to start talking to the next-gen early on financial planning or wealth management so that they feel that it's a part of them. But for any young working adults, start by doing the basics — which is to establish a habit of saving, and if you're comfortable enough, invest in something even if it's only a small amount of money.
What do you think are some of the challenges that millennials face in this day and age with regards to saving?
I think the temptation of spending is relatively high. Look at the customer experience today. We put credit cards or debit cards on the shopping and transport apps. With Grab, I just put my card details in and it's just continuous spending. The ease of payment like PayNow makes spending so easy, without actually seeing the money deplete. We should track the expenses and perhaps use it for the better like bite-sized investments.
Indeed, digital currency is definitely a problem with regards to how we don't realise how much we spend. What are your thoughts on credit cards? Could they be more of harm than of good?
It depends on the individual's habit. Some of the credit cards give you very good cash rebates like HSBC advanced with a 5% cash rebate. If you are a good planner, you can actually optimise it to help you to earn either the cashback or the miles for you to travel overseas. But just make sure always pay in full. If you really have to skip a payment, just make sure the minimum payment is paid and on top of that make sure you reduce the outstanding balance next month.
Easy credit is available for people because there's a need some time for emergencies so rather than having a habit of always borrowing. Having a discipline for your payments is important and that's the reason why I think financial literacy and education is important in school, I think it's important to teach everyone how to optimise cash flow, because there are times you really need it but at the same time, how can we be responsible borrowers?