How Do We Save So Much Money?

As a beginner to investing, what you soon realize is that you have to have money to make money. Let’s say you have $10,000 to invest, which means you probably have more cash on hand than 90% of Americans. If you managed to pick the right stock and double your money, you’ll have just $20,000. That amount of money isn’t exactly life changing. If you’re a dividend growth investor, you know that in order to have meaningful monthly income streams, you need A LOT of money. We’re targeting a $400,000 portfolio with a 3% yield that would pay us $1,000 a month which we reckon we could live off of in many nice places around the world.

In order to get to $400,000, you have to invest significant amounts of money every month. With a 30-stock portfolio, we need to make 30 investments per month. Our investments in consumer staples stocks alone are costing us $1,620 per month:

  • ADM: $550
  • WBA: $550
  • KO: $360
  • WMT: $100
  • PG: $60

Just our monthly investment in ADM is equivalent to a monthly car payment while the entire amount we’re putting into consumer staples stocks is equivalent to a mortgage. People must read this and think we’re just a bunch of rich pricks over here at Quantigence. Well we can assure you that we’re definitely not rich. Let’s do some back of the napkin math using a $100,000 a year salary which is probably what a mid-career corporate slave ought to be pulling down.

$100,000 / 12 = $8,333 per month

Now let’s say you get a bonus of 3 months every year which is about average in the world of finance. That would mean that you would get an extra $25,000 a year which is $2083 more income per month. So now your monthly income totals $10,416 per month gross income. We’re currently based in Hong Kong which, while being the MOST expensive place to live as an expat in the world, is also a place with a very low tax rate. Our tax rate has never exceeded 11%. This gives us $9,374 per month in NET pay.

Now let’s look at our budget:

  • $2,000 per month for shoebox sized studio
  • $1,000 per month for drinking, eating, etc.
  • $500 per month for travel
  • $500 per month for utilities, laundry, cleaner

Hong Kong has a very efficient and cheap public transport system. You do not need a car when you live in Hong Kong. That means we’re able to sock away $5,374 per month or $64,488 per year. To hit our target of $400,000, we’ll need 6.2 years in total. We’ve been saving for about 5 years and probably not saving as much as we should have, considering we’ve now traveled to nearly every country in Asia. Where we are today is that we have saved about $320,000, of which about $200,000 is already invested in DGI stocks. In September of next year when we get HK permanent residence, we’re telling the man to shove it and leaving our prestigious finance jobs. This means we have 15 months left to save $80,000 which is about $5,333 per month or right at our target savings rate.

Now you might be inclined to think that we live and spend like all the other expats in Hong Kong which is definitely not the case. The amount of money expats spend here is ludicrous. Let’s take food as an example. Every single restaurant that’s not a local joint has prices that reflect Hong Kong has the most expensive property in the world. The go-to burger joint in town called Butcher’s Club is a great example of the lunacy around here. The most basic burger with fries and a coke costs $19 USD.


The burgers are mediocre as well, so you’ll never find us setting a foot in that “casual dining” place. We went to dinner recently at a “nice restaurant” with a view and “stylish” patrons. Just a single small bowl of pasta cost $43 USD and not one person at our table batted an eyelid over the prices. That sort of ridiculous expenditure at restaurants is the norm here. A restaurant opens every other day and it’s packed to the gills with people who have no understanding of the value of money. Instead of going to any of these places, we frequent local restaurants where the food is excellent and you rarely see a white face.

Drinking isn’t cheap either. Most bars in HK will charge you around $10 USD per beer (78 HK) when that same beer in the 7-11 convenience store next door is $1.50 (12 HKD). Happy hour prices could be as low as $5 USD per beer if you’re lucky to find such a place. Alternatives abound as drinking in HK is legal pretty much anywhere. There is an entire 7-11 culture where people buy beers and drink freely both inside and outside 7-11s.

We know it’s not likely that you’ll be able to move to Hong Kong anytime soon, but the lessons here are the same anywhere in the world. Avoid having a car if you can as they are money pits. Don’t frequent fancy restaurants and bars where people go to “see and be seen” whatever that means. Don’t spend ridiculous amounts of money on clothes, fashion, package holidays, and all that other drivel with sky-high markups where your purchase makes someone else filthy rich. If you are fortunate enough to make six figures a year, live like you’re making $40K. It’s the only way you can break the shackles of corporate slavery,

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