I am one of your Asian readers from Hong Kong and have just finished your book and most of the content on your blog! Very inspiring and thanks for letting me know the concept of FIRE at a relatively young age.
One of my biggest struggle to FIRE, and also the reason for writing to you guys, is that in Asia we have a culture of giving ‘家用’ (housekeeping money), which I believe Kristy must know well LOL. Especially because I grew up in a poor family, my parents are 100% dependent on me and my younger sister after they retire as they don’t have any investment or cash to sustain their living (they save little to non every month). That would put a lot of pressure on us and significantly affect my savings rate. I can only expect my housekeeping money and medical expenses for my parents to increase in the future for at least 30 years ahead.
So I would really appreciate if you guys can help me a bit on how I can manage my situation and better plan for FIRE! Below are my finances:
Age: 24-year-old female, graduated last year, single
Income: Gross HKD 336,000 annually; HKD 315,968 annually after tax and MPF* (mandatory retirement account contribution)
Debts: no debts or loans
Rents: $0 as I live with my family (mum, dad & younger sister)
Monthly expenses: HKD 16,000 ($8K as my expenses and another $8K as housekeeping money)
Insurance: don’t have any yet, expected to be HKD 2,000 per month starting next month
Net savings: HKD 8,330 per month, saving rate of 32%
Savings account: HKD 150,000
*Monthly MPF contributions: HKD 1,400 (cap at HKD 1,500 when annual gross income >= HKD 360,000)
Our MPF contributions can only be withdrawn at 65. If you want to withdraw earlier, you must be at least 60 and have ceased all employment and self-employment. Withdrawals are exempted from being taxed.
I don’t have any investments right now but planning to start with US and global ETFs. I would like to achieve FIRE in 20 years and also planning to start some online retail business to expand my income sources because I know my current saving rate is far too low.
I also expect my monthly expenses to increase even if I try to spend less, because housekeeping money is an item I cannot avoid. Indeed it will only go up when my parents need more medical and travel expenses after they retire. My dad will retire in 5 years and my mum’s only working part-time occasionally, salary quite negligible. They are now 60 and 54 years old.
I don’t mean to blame my parents for not saving any money and planning their retirement, but this situation really frustrates me when I have to maintain expenses for the three of us while not having a high-paying salary.
So when I calculate using the 4% rule, unlikely many others, it’s difficult for me to estimate my yearly expenses because I don’t know how much I need to spare for my parents who will be 100% dependent on me (or at least 50% when my sister starts working too). I think Kristy is really lucky, because although you grew up in a poor family, your parents worked hard to sustain a living and managed to pay themselves well for retirement. My parents don’t have that ability and now the responsibility all falls on me and my sis.
My parent’s monthly expenses’ roughly HKD 23,000, I guess that will be split evenly among me and my sis after 5 years when my dad retires. (but of course I would like to provide them better living standards after they retire) Their combined MPF contribution’s roughly HKD 300,000.
How would you advise provided my situation above? I am really stressed out because of this. I want this negativity to go away and achieve more to make up for my family situation. Thanks for reading this long email and hope my case would resonate with other Asian youngsters out there. Many thanks!
Hi HKer, first of all, my condolences to you for having shit parents. While that may sound harsh, as Asian kids, we get called “shit daughter/son” or “stupid little shit” all the time. But never do our parents ever stop to consider that it can go both ways. In this case, you have a severe case of shitty-ass-parents-syndrome, and we need to jump on this fast because, left untreated, it can seriously destroy your health and your life.
We don’t get to choose our parents, but we do get to choose how to respond to them.
This reader case isn’t so much about numbers as curing your shitty-ass-parents-syndrome. I can immediately see that based on your parents’ monthly spending, it’ll take up close to your entire salary to support them, so there’s no way you can become financially independent if you go down this path. Not only that, their idea of using you as their retirement plan is incredibly stupid.
Because as everyone knows, your kids can’t possibly ever get laid off from a job, get sick and not be able to work, or get hit by a bus, right? It’s a bullet proof plan!
I’m staring at the back of my skull right now because that’s how hard I rolled my eyes.
Okay, let’s collectively take a deep breath, and then repeat after me.
“I am not responsible for my parents’ financial failings.”
The fact that your parents don’t have any money saved for retirement is not your fault. They made that choice, you didn’t.
Now, you might accuse me of being a shit daughter and say things like “but but but, what about filial piety (孝道),”?
For everyone else out there who isn’t Chinese, “filial piety” (孝道), means absolute devotion to ones’ parents, no matter what their failings or how much they mistreat you, because as their child, you owe your parents everything.
Believe me, I get it. It’s because of this long held cultural belief that I went home to visit my parents every weekend before I retired, despite the constant fights I had with my mom and the anxiety attacks I got every time. I was a completely masochist and couldn’t stop myself. Unless you’ve grown up in our culture, it’s nearly impossible to understand the concept of 孝道 and why we continue torturing ourselves no matter how badly we are treated.
But you know what the crazy thing is? It wasn’t until I set boundaries and put an ocean between myself and my parents that I finally learned how to stand up for myself. Only then did they see that this relationship is two sided and it isn’t just “parents are always right”.
You are not alone in this struggle. There are other people, just like you, who are fighting to take back their power and set boundaries so that their parents don’t continue to take advantage of them.
Now that we’ve gotten the issue out in the open, how do we resolve this?
I’m not going to insult your intelligence by giving you condescending advice like “just talk to your parents and tell them how you feel.” Growing up, whenever my non-Asian friends told me that, I responded by laughing so hard I fell down. Our parents don’t give a shit about how we feel. They don’t care about us feeling happy. They want us to be USEFUL. The more useful you are, the happier you’ll feel. That’s my parents’ motto.
Well, the good news about that is because we’ve learned how to be logical and useful, instead of being emotional and helpless, we can approach this pragmatically.
Step 1: Become Independent
In order to set boundaries, you need to be independent first. If you’re living with them they own your ass.
So, the first step is to stop relying on them financially. You have to be able to stand on your own two feet and interact with them from a position of strength.
You might think you’re saving money by saving rent, but it’ll cost you way more money (and sanity) in the long run.
Either move out or pay them rent.
Step 2: Set Expectations
One of the reasons I kept going home and making myself miserable is because I thought if I was “a good daughter” my mom would be grateful and treat me better.
Stop and get that delusion out of your head right the hell now. No matter how much you do for them, shitty parents will always want more from you. Think about it. If you spoil a child, they don’t become nicer to you. They just get even more entitled. It’s the same for parents.
Let me give you an example. One of my Chinese friends, we’ll call her ‘Leslie’, has a life philosophy of “surrendering unconditionally” to her parents.
When Leslie turned 30 years and wasn’t married, she began to panic. Worried about being disowned, she and a guy friend made a pact to marry each other to appease their parents.
Who needs to marry for love when you have your parents’ respect and approval, right?
And guess what? After she did exact what they wanted, soon afterwards, her parents gave them their approval, loved them unconditionally, and they lived happily ever after.
Bwahahaha. Yeah right. Nope. Less than a year after their marriage, Leslie’s mom started pestering her about “where are the kids? All my friends have grandchildren, when am I getting one?”
So, being the obedient devoted daughter, she got pregnant and had a kid.
You’d think her mom would be overjoyed and go over to see her grandchild all the time right?
In the year after her kid was born, her mom visited her a grand total of….
Soon after that visit, Leslie got a call. It was her dad on the phone. “Your mom wants me to tell you something.”
“What is it?” Leslie asked, thinking her mom wanted to tell her how proud she was of her and her grandchild.
“She’s very disappointed in you.”
Leslie’s heart dropped. “What? Why? What did I do?”
“Why aren’t you a manager at work yet? It’s embarrassing. All your mom’s friends’ kids are managers or directors. Your mom is very disappointed in you.”
If want to follow Leslie’s “surrender unconditionally” method, go ahead. But just know that obeying your parents isn’t going to make them love you more. It just makes them more controlling and demanding.
Believe me, I tried. I got the good grades. I became an engineer. I became a millionaire. Didn’t matter. They still wanted more out of me. Kids, house, promotions at work. It never ends.
Stop deluding yourself into thinking you can appease them. You can’t. So, stop trying.
Step 3: Set Boundaries
This is a tough one, I have to admit. It took me years to do this. I still have trouble with it but it’s the most important step.
You need to set boundaries so that your parents don’t take advantage of you. For me that was a physical boundary. Instead of letting my mom treat me like crap, I simply put distance between us so she physically couldn’t. And if she ever starts being abusive again, I just leave. I couldn’t do that as a teen because I relied on her, but once I became independent, I was free.
It wasn’t easy, but it was necessary.
You will feel guilt. You will worry. And the words “shit daughter/son” will ricochet around your head a lot. All of that is normal. But if you don’t set boundaries, your parents will continue taking advantage of you, you will grudgingly accept it out of guilt, and then eventually it will all blow up when your volcano of resentment erupts, spewing rage lava all over them.
So, for you, a boundary might be, you pay a fair price for rent to them monthly, buy your own groceries, and they can use the rent towards their retirement. Once that money is gone, they don’t get any more money from you to fund their unlimited retirement budget.
Step 4: Lie Your Pants Off
You might think I’m joking about this, but I’m dead serious.
Your parents are living in an alternate reality from generations ago, where just because they are older, it means they are automatically right and get to control your finances. We don’t live in that time period anymore.
As a result, I’d like to propose a highly effective, tried and tested strategy I like to call “Web of Lies.”
No matter what you say, your parents will simply assume you are young and naive and as your elders, they will always know more than you, so using logic and truth won’t work on them.
Trust me I’ve tried. Even though my dad is also an engineer, trying to explain the 4% rule and financial independence to him using logic and math was like teaching a cat to do my taxes. Because of the cultural hierarchy, you parents will always assume they know more than you because they are older.
So instead, I lied and told them we were taking a gap year by travelling and would eventually come back to find work. And then after the year was over, I simply continued travelling and proving that FI works by not needing a job or any support from them.
In your case, whatever you do, DO NOT tell them how much money you have. Construct an elaborate alternate reality where you are not able to help them financially. Say you have a bad credit score. Say your money is locked away by your company. Hell, make up a story where you are indebted to the Yakuza if you have to.
The truth is not your friend. But a well thought out and properly constructed Web of Lies can set you free.
Step 5: Secretly Set Money Aside
I know all this is easier said than done. Asian parents have a PHD in guilty tripping, so you are no match for the tsunami of guilt that will wash over you when they inevitably ask for financial help.
This is why you set aside a fixed amount of money each month for them for medical emergencies. They can always scale down their cost of living in retirement, but health is not something they can choose. Whatever that figure is, it depends on you. But don’t tell them about it! Otherwise, they’ll just find a way to spend it. Set this aside and add it to your FI number when you calculate your time to retirement.
Step 6: Emotional Help Over Financial Help
A friend of mine taught me that financial help isn’t the only type of help you can give your parents. You can support them in other ways. Buy them groceries, help them find a good health insurance provider, a cheaper place to live, create a budget, etc. Find ways to help them without letting them destroy you financially. Spend time with them instead of giving them handouts.
When it comes to family members who rely on you financially, realize that you are not alone. When I was little, my mom constantly asked me “how much money are you going to give me when you grow up?” Luckily, my Dad is able to take care of her. But some of my friends are not so lucky and they have the same struggle as you.
What they’ve realized is that you can’t make your parents happy or grateful by continuously giving into their every need. It just causes them to constantly hit you up for money and help. Everyone needs to set healthy boundaries.
The good news is that you are still very young (only 24! WOW!) and you have a lot of time ahead of you to build up wealth. Just make sure your parents don’t find out about it.
Remember, when in doubt, Lie Your Ass Off.
All right that’s enough yelling from me. Merry F*cking Christmas everyone!
What do you think of HKer’s situation? Would you give your parents money to fund their retirement? Why or why not?
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