How to accumulate wealth by being poor

One of those weird Hong Kong things: the soon-to-be college graduate who puts his/her name down for a public rental housing unit. The waiting list currently stretches out for nearly six years, and the applicant must get a low-paying job – in McDonalds, say – throughout that time in order to qualify as poor enough for the eventual apartment.

Sounds nuts. As the Housing Secretary points out, these young graduates are sacrificing their first steps up the career ladder.

But, unless they are confident of getting a really high-paying job, their calculations are perfectly rational in the context of the government’s genius land/revenue policies. Once they leave their parents’ home for the subsidized apartment, they will be paying maybe HK$2,500 a month in rent. In the private rental market, they would need to pay maybe four or five times that much for a similar-size flat in a similarly inconvenient location. (As for buying – the average home in Hong Kong costs around 18 times median income.) 

Now free to earn more, they can look forward to decades of pocketing HK$10,000 a month they wouldn’t otherwise have. If they save it, they can be sitting on a couple of million bucks by the time they’re in their 40s. Even if the government evicts them for being too rich by that stage, it would have been well worth it.

This entry was posted in Blog. Bookmark the permalink.

5 Responses to How to accumulate wealth by being poor

  1. Judge Pao says:

    The sad thing is that government policy condemns 50% of the population to living in public housing. For the most part, that is inter-generational.

    But the HK government is the world’s largest property company, and there’s nothing like a captive market to sustain that.

  2. Chinese Netizen says:

    Honkeys (and southern Chinese in general) have always, if anything, been talked up on their “pragmatic” ways.

  3. Stu says:

    What can a couple of million get you? If there are two of you, you can buy land and build your own house in Kyoto according to this couple

  4. ex-pd says:

    2 million can get you a nice old house in the south of France.

  5. Lord Byron says:

    2 euro can get you a nice old house in the south of Italy.

Leave a Reply

Your email address will not be published. Required fields are marked *