Monday, November 30, 2009

Business Commentary As I Am Traveling

No time for long posts, but I will try to record down interesting observations pertaining to business and commerce. Still in HK, contrary to popular perception, this financial center has many layers to it. The ultra rich (listed company owners and property owners) basically get to enjoy all the perks. HK is a place where its good to be rich. The ultra rich population probably is just the top 1%-2%. Then there is the upper middle class. To qualify, you basically has to have paid up at least one property and be invested / paying off one or two more properties - that will put you in the net assets region of HK10m-HK30m. I think that makes up another 10% of the population. I think I have to qualify here, its 10% of households, and not an absolute number of people.

Its crazy I know, but if your net worth is below HK10m, I don't even consider you as upper middle class, because you are not living as upper middle with your net worth below that in HK. If your net worth is between HK1m-HK10m, you are middle class. That grouping probably makes up another 20% of households. If your household net worth is less than HK1m, you should be living in government flats, busily saving to put down payment on a private property - this grouping should total about 50%. Included in this group are those who are still battling the negative equity aspect from the last financial crisis.

What about the rest? The rest are barely making ends meet, and its a significant grouping, with a large number of them being recent immigrants. Many are just around the poverty line, and would be receiving some sort of subsidy or monthly allowance from the government.

Of course, this is not a scientific data collection but rather from my observations from having been in HK many times over the past 10 years. Its a brutal society when it comes to money. Its unapologetic in its pursuit of money, and when you have it almost all your other character failings an be overlooked. The funny thing is that even the poor would still be wanting to work and live in HK, rather than complaining and protesting of the wide disparity of income between the poor and rich. Here is one place where the poor and striving will work hard willingly, grumble a bit about where they are but will not blame the place or the rich because they somehow embody and breathe the spirit of capitalism - its OK to be poor, but at least its a place that give me a shot at being rich if I work hard, get the right opportunities, and/or the other cards fall in the right places for me.

p/s photo: Rachel Kum

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