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Life is a journey.
Make it great.
Managing and growing
your wealth
VISION
KNOWLEDGE
PATH
CHOICE
The financial resources
for the lifestyle you want
Growing your wealth for the lifestyle you want does not happen by chance. It results from careful planning and
wise investment.
A sound financial plan is your first step to achieving your goals such as buying your first property, giving your
kids a sound education, or retiring when you want to. While you build the resources to fulfill your life’s goals,
you also want to ensure that your money continues to work hard for you even in varying economic situations.
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VISION
KNOWLEDGE
PATH
VISION
CHOICE
How to build your wealth over time
Many people know how to build wealth simply by accumulating savings. But if you are unable to add value to
your savings, the overall value of your assets will gradually be eroded by inflation, undermining all your efforts. It
takes careful and considered planning to build wealth and overcome the effects of inflation.
Among seven Asian regions surveyed, Chinese people have the third strongest tendency to save. 48% of
Chinese interviewees said that they would increase their rate of savings in the next six months. While savings
and accumulating wealth are important, the key to adding value lies in consistent and sustainable wealth
management.
KNOWLEDGE
China ranks the 3 in the Asian region in saving for the future
Plans to save in
next 6 months
HK%
India%
China%
Singapore%
By investing fixed amounts regularly, you can take advantage of “dollar cost averaging”. This means that
if you are buying funds, when the price rises, you buy fewer units and when the price drops, you buy
more.
So over time, regardless of whether the price of the fund you are buying rises or falls, the average price
you pay for each unit is likely to be lower than the market price. This may help increase the long-term
return on your investment.
Malaysia%
Taiwan%
41
33
30
57
Decrease
saving
1
6
47
44
33
26
Stop saving
48
61
67
Maintain
current level
2
4
3
5
4
7
52
6
9
14
12
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Albert Einstein said, “The most powerful force in the universe is compound interest.” Indeed, an effective savings
plan needs a longer period of time for the power of compound interest to work to your advantage.
Save HK$5,000 per month for 10 years and let it grow （Assuming 5% p.a.return）
Time
6000,000
30 years
6000,000
40 years
6000,000
0
500,000
Capital
179,646
Capital Gain
684,085
1,514,900
2,883,261
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Total Savings
4,000,000（RMB）
For example, let’s say you save RMB 5,000 a month for 10 years – the total amount you accumulate is RMB
600,000. If you earn 5% interest each year on your savings, after 10 years you will have accumulated RMB
779,645 - almost RMB 180,000 more! By the 40th year, that sum will reach RMB 3,483,261.
5
30,000
25,000
20,000
15,000
5,000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: AASTOCKS
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That’s the power of compound interest, the force you want to harness to build your wealth for the long term. The
longer you invest your capital, the better your results will be.
Defnition:
35,000
†
Most people understand that investing their capital can lead to potentially greater wealth. However, if you simply
invest your money in equities and expect to double your earnings in a short time, the risk is much higher. It is also
not easy to maintain the momentum of growing for the long-term.
20 years
HSI
10,000
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Grow your wealth with compound interest
6000,000
100
50
25
Source: HSBC Asian Insurance Monitor 2011
10 years
200
150
Increase
savings
Dollar-cost
averaging*
Dollar-cost averaging may help manage market risk
250
Korea%
CHOICE
Invest regularly to benefit from fluctuations
USD
rd
PATH
年份
Average bid
price of a
tracking fund
HSI†
buy more units
when the price
is lower and
fewer units
when the price
is higher
and may benefit
from a lower
average cost in
the long run
* the technique does
not guarantee a profit
or protect you from
suffering a loss in a
declining market.
The graph above shows that for the 10 years from 2001 to 2010, the Hang Seng Index recorded an
overall increase. However, there were sharp fluctuations, especially between 2003 and 2009, which had
made many investors worried. If you had used dollar-cost averaging during that period to invest regular
amounts in a tracking fund each month, you could have enjoyed potential capital gain with less volatility.
Good asset allocation helps grow your wealth steadily
“Asset allocation” means diversifying and balancing the risk of your investments among different assets.
A winning basketball team has a mix of three-point shooters, offensive players and defensive players. The
same goes for a winning portfolio. Just as dollar-cost averaging may help smooth out the fluctuations in
market prices, careful asset allocation diversifies your investments across different kinds of assets to
”smooth out” the rises and falls in different assets and create a more balanced portfolio for all market
conditions.
Review your portfolio regularly
Nothing in life stands still – especially not in today’s dynamic global economy. So no matter what
investment strategy you use, it is important to review your portfolio regularly and adjust your mix of
investments as needed.
As you progress through the different life stages, your responsibilities and priorities will change. Your
appetite for risk may also change as you grow older. That is why it′s good to have a capable advisor you
can turn to to help you adjust your asset allocation. Your Relationship Managers will be glad to support
you and help you review your portfolio periodically, so you can make the right changes at the right time
for the right reasons.
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VISION
KNOWLEDGE
PATH
VISION
CHOICE
How to help reach your wealth goals
The path to growing your wealth effectively is to follow three principles: start early, be consistent and use the
right tool for your needs at each stage of your life.
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PATH
CHOICE
How to select the products
you need to achieve your goals
Figuring out your needs in wealth growth will help you select the right products.
Start early
The earlier you start investing, the sooner you can get the power of compound interest working for you to build
value, earn even greater returns and make your money work harder for you.
$
Target Wealth
2
1
Regular saving
2
KNOWLEDGE
Irregular savings
behavior
Your needs in wealth growth may include
Secured wealth
accumulation
You will need your savings to have guaranteed returns.
Partially Withdrawal
You will need the flexibility to withdraw cash at important life stages.
Enhance potential
returns
You will need your money to work harder for you to counter the
low-interest-rate environment.
Flexibility
You will need flexible payment and return ways to meet your needs
at different times.
Start Late
Time
Be consistent
Many people stop their investment planning particularly during market downturns. By doing this, they often miss
out on opportunities to invest at lower prices. If you stick to your plan and keep moving ahead consistently, you can
spread your risks and grow your wealth for the long-term through dollar-cost averaging and careful asset allocation.
Use the right tool at the right time
With good asset allocation and regular reviews of your portfolio with your Relationship Manager, you can adjust your
portfolio to meet your needs at different stages of your life and in different market conditions. This helps you keep
your momentum going to achieve your long-term financial goals.
1 Dividends are not guaranteed.
2 Investment involves risks. The income (if any) from investment choices may go down as well as up.
Insurance policy owner shall take all the investment risk.
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Note: Please note that your savings returns may go down as well as up. The diagram and information shown are hypothetical and for illustration only. Please contact
your Relationship Manager for professional advice.
Note: This document is not provided for sales purpose. The information shown in this document is hypothetical and for illustration only. It is not intended
to constitute a recommendation or advice to any customers and is not intended as a substitute for professional advice. You should not act on any
information in this document without seeking specific professional advice. Please contact your Relationship Manager for addressing your wealth
management needs.
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Disclaimer:
This document has been distributed by HSBC Bank (China) Company Limited (the “Bank”). It is not
intended for anyone other than the recipient and should not be distributed by the recipient to any other
persons. It shall not be copied, reproduced, transmitted or further distributed.
Whilst every care has been taken in preparing this document, neither the Bank nor any other HSBC Group
member(s) makes any guarantee, representation or warranty or accepts any responsibility or liability as to
its accuracy or completeness. Except as specifically indicated, the expressions of opinion are those of the
Bank and/or the relevant HSBC Group member(s) only and are subject to change without notice.
The information contained in this document has not been reviewed in the light of your personal financial
circumstances. Neither the Bank nor any other HSBC Group member(s) is providing any financial or
investment advice. The information is not and should not be construed as an offer to sell or a solicitation
for an offer to buy any financial products, and should not be considered as investment advice.
Some of the information in this document is derived from third party sources as specified at the relevant
places where such information is set out. The Bank believes such information to be reliable but it has not
independently verified.
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