A quarter of Generation X Hong Kong investors are in debt and do not have an effective plan for managing their finances in the long term, according to a new study by Manulife Asia.

A quarter of Generation X Hong Kong investors are in debt and do not have an effective plan for managing their finances in the long term, according to a new study by Manulife Asia.

The survey findings revealed one in five investors in Hong Kong are in debt, with this number rising to one in four among post-80s investors aged under 35.

Paul A. Smith, Vice President and Head of Individual Financial Products, Manulife International Limited, said that investors of all ages needed to better manage their overall cash flow.

“The post-80s generation in particular should consider seeking professional advice to ensure they have an effective financial plan for the long term,” he said.

“This should include regular tracking of expenses to manage discretionary spending, and the setting of clear financial goals that enable them to pay back their debt quickly and start saving for the future as soon as possible.”

According to the study, the top reasons for debt accumulation among Generation X investors in Hong Kong include investment loss (23 per cent), discretionary expenses (16 per cent) such as travel and entertainment, as well as daily living costs (12 per cent).

The survey also revealed that younger investors are failing to adequately plan for their financial future, with “unrealistic savings targets” seen as a common theme.

Despite 63 per cent of younger investors setting a specific time frame for achieving their target savings amount, Manulife’s study found a lack of “any clear focus” for the savings plans of younger investors who said that more than 40 per cent of their money is held in either cash or investments “for no specific purpose”.

Smith affirmed that differences in attitudes towards debt varied across age groups, with housing seen as the biggest concern for Generation X investors in terms of affordability.

“It is important for investors to set financial goals that are right for them at that point in their life,” Smith said.

“Investors need to be less fixated on short terms gains and the endless quest to buy at ‘the right time’ and instead focus on developing a longer term approach to financial planning, [taking] into account changing priorities at different life stages.”