[Passive Income 2024] How to Get Passive Income in Hong Kong

Views 7419May 22, 2024

What is Passive Income?

Passive income refers to continuous income without directly engaging in work, providing services, or exchanging time and labor. But it does not mean that you do not have work or effort at all, but generally invest a certain amount of time and resources early on in creating and managing the corresponding investment or asset. Passive income has the advantage of being able to generate a stable income for individuals, without exchanging income for labor time, giving people more time and space to do what they want, while also helping to achieve financial freedom.

Products that typically generate passive income include:Bank Term Deposit, hedge currency,Bonds and Bond Funds,gold, andFutu CashThe products included mainly invest in highly secure currency instruments such as short-term government bonds, bank term deposits, and can also bring you relatively stable passive income.

If you want a steady passive income, Futu Cash is one of the options to consider.


Access Passive Income Method 1 - HKD Fixed Deposit

How to Obtain Passive Income 2-Futu Cash

Obtaining Passive Income Method 3 - Bonds

How to Obtain Passive Income 4 - Dividend Stock Portfolio

Access Passive Income Method 1 - HKD Fixed Deposit

A term deposit is a financial product that is usually offered by banks and is supported by different currencies such as HKD, USD, etc. It is a way of saving money by depositing your funds into a regular account opened by the bank and agreeing to keep the funds inactive for a certain period of time (known as a deposit term). Usually deposit periods are 7 days, 1 month, 3 months, 6 months, 1 year, depending on your needs. And during this time, the amount of the deposit will receive the agreed interest. When the deposit period ends, you can withdraw the principal and accrued interest.

However, if there is a sudden lack of cash flow during the period and you want to withdraw money in advance, interest will be lost and you will have to pay a penalty or processing fee. Time deposits are a relatively safe way to invest, with the Hong Kong Deposit Protection Scheme securing up to HK$50 million for each depositor's funds at each member bank.

But it should be noted that deposit rates can be affected by inflation and other economic factors that may not fully offset the depreciation of funds brought about by inflation.

To summarize: Regular deposits have the following advantages and disadvantages:

  • Fixed interest rate

Time deposits usually offer a fixed interest rate, which means you can determine your return over the deposit term. This helps you make accurate financial planning and know how much interest you will get.

  • Safe and Godless

Time deposits are a simple and easy to understand financial product. You simply deposit money into the bank, agree on the deposit term and interest rate, and then wait for the deposit to expire to withdraw the principal and interest, without keeping an eye on the market for a long time.

  • Low risk

Compared to other investment options, such as stocks or bonds, term deposits are a less risky way to save. Your deposit amount is usually protected by a deposit insurance plan, which means that deposits of 50 million or less can be protected even if the bank runs into trouble.

  • Low liquidity

Due to the nature of regular deposits, your funds are fixed for the duration of the deposit and cannot be accessed at any time unless a penalty or processing fee is paid. If you have the opportunity to use these funds in the short term or need to move these funds urgently, a regular deposit may not be the best option.

  • Minimum deposit

Regular bank deposits have a minimum deposit requirement, and the minimum deposit is now HK$10000. For higher interest rates, the minimum deposit requirement will also be higher. Virtual banks may not set minimum deposit requirements.

  • Inflation risk

Fixed interest rates over the term of the deposit may not fully offset the effects of inflation. If the inflation rate is higher than the rate on a fixed deposit, the actual purchasing power of your funds may decrease.

Extended Reading: 2024 Latest Bank Fixed Deposit Rate Comparison

How to Obtain Passive Income 2-Futu Cash

Futu Cash will come to life and help you turn your money into profit. Cash is the benchmark for the FDI brand. The main investment of FDI funds under the Commodity Commodity brand is in short-term government bonds and money instruments with high security equal to bank term deposits. The investment period is highly stable, suitable for all types of investors such as hedge investors.

Futu Cash Benefit

  • Low thresholds

Subscriptions as low as HK$0.01 can be purchased even with $100.

  • High flexibility

You can buy or withdraw money at any time according to your cash flow needs, or trade at any time.

  • Ideal and stable returns

USD Currency Fund 5% Average Return* +5% Account Opening Reward^

Example: Invite you to participate in the Futui Cash Fund and invest HKD$10,000, with a term limit of 365 days (one year, with an annual interest rate of 5% average return of USD FX fund*+5% open-ended bonus). Without withdrawal, according to the above formula, the profit is calculated as follows: First year earnings= 10,000 × 0.1 × 365/365 = HKD$1000

Your cash pile will have the chance to earn HKD$1000 after a year.

*5% of all USD currency funds return on average earnings per year from Futu, data up to 22 January 2024. Historical earnings are for reference only, and the past performance of the fund cannot be predicted after the date.

^5% Opener Rewards are applicable to all funds on the Futu platform and cannot be shared with other new customer event rewards, subject to terms and conditions.

⁃ 10% is made up of 5% average return+5% limited-time account opening bonus.

  • 0 Redemption Fee

The Global Fund is commission-free and the net account value is the real return on investment after the management fee is deducted.

  • Set up an automatic redemption mechanism

Futu Cash has set up automatic application function, the system will automatically buy cash from your securities account daily after the market is placed. At the same time, the money fund assets will be counted in the purchase of securities that can be used directly for stock trading, purchase new shares (without financial gain) and purchase non-cash fund account assets Living WagesAutomatic RedemptionThe same market currency fund does not need to be redeemed manually to pay off debts.

Extended Reading: Futu Cash, USD FX Fund Average Returns 5%
Futu Cash Treasure
Futu Cash Treasure

In general, money market funds are more secure, but in extreme situations, such as a default on short-term notes purchased by the fund company, a sudden rise in interest rates, a runaway bond price, a market panic redemption, etc., there can be losses for investors.

Obtaining Passive Income Method 3 - Bonds

Bonds are financial notes issued by issuers to raise funds, which promise to pay interest at a set interest rate within a specified period of time and return principal on the maturity date. As an investment instrument with a long history, bonds have long been favored by investors of all kinds due to their characteristics of regular interest payments and maturity returns. Sovereign bonds issued by countries or governments in particular are known for their high security. As a Hong Kong investor, the bonds that are more easily accessible are probably Treasury securities issued by the US government.

U.S. Treasury Bonds, also known as U.S. Bonds, are long-term debt instruments issued by the United States government to coordinate funds to support other operations and debt relief. These national securities are primarily issued by a wide range of investors including large institutions and individual investors, and enjoy high circulation and liquidity in the global financial markets. Due to their stability and safety characteristics, US Treasuries are often considered to be one of the preferred investment tools in risk management strategies. Provided by FutuUS bonds of different maturitiesTo meet investors' goal of obtaining stable dividends.

What are the benefits of buying US bonds?

  • Security

Since US debt is issued by the US government, it is essentially a guarantee of creditworthiness and debt repayment capacity.

  • Fixed Returns

As a result, US bonds are generally regarded as “non-defaulting” bonds and have the reputation of being one of the safest investment instruments in the world.

  • Higher liquidity

U.S. Debt provides fixed returns to investors, so investors can earn stable interest income after buying U.S. Debt.

  • Balancing Risks

US Treasury bonds have higher liquidity relative to other types of bonds. By purchasing high-risk products at the same time as buying US bonds, US bonds can play the role of balancing risk and return.

buyUS DebtWhat are the risks?

However, although the risk of default on US bonds is lower, we do not rule out the possibility of it happening. In addition to this, there are:

  • Interest Rate Risk

    Bond prices and interest rates are inversely proportional. That is, the lower the interest rate, the higher the price of the bond; on the contrary, the higher the interest rate, the lower the price of the bond. Investors tend to deposit money in banks. The attractiveness of the bonds decreases, which leads to a drop in market prices, and investors who have already taken up bonds may incur losses.

  • Exchange Rate Risk

    But when you buy overseas bonds, there is exchange rate risk.

Extended Reading: How to Buy US Debt in Hong Kong
Invest in US bonds
Invest in US bonds

How to Obtain Passive Income 4 - Dividend Stock Portfolio

“Dog stocks” is an income stock investment strategy devised by Michael B. O'Higgins in 1991, specifically for investors seeking dividend income. The strategy is intuitive: pick 10 stocks with the highest dividend yield from the Dow Jones Industrial Average, buy at the start of each year, and sell at the end of the year.

IN 2022, WHEN THE US STOCK MARKET IS NOT PERFORMING WELL, THE COMBINATION OF THE CHANNEL DOG STRATEGY WAS BRIGHT, WITH THE HEX RISING BY 2.2%, WHILE THE S&P 500 AND NASDAQ FELL BY 8.8%, AND THE S&P 500 AND NASDAQ FELL BY MORE THAN 10%. This shows that when the market is volatile, the portfolio of investments that seek dividend income can be a safe haven for investors. Futu provides 5x24 hoursUS Stock Trading.

The strategy is suitable for investors with lower risk tolerance, who prefer stable dividend income, but still expect some capital gains.

Although it sounds solid, there is still the possibility of causing losses, such as stopping dividends at any time, earning price erosion, etc.

What is the principle of Dog Stock Income Combination?

The core idea behind Dog Stock Strategy is to focus on the dividend yield, using it as a key indicator to assess the value of stocks. A high dividend yield often means that the stock price may be undervalued, offering the potential for earnings that exceed the average level of the majors.

This principle is based on the fact that the 30 components of the Dow Jones index are generally well-chosen large, experienced blue-chip stocks with good financial conditions and billions of dollars in market capitalization, and a solid earnings record.

These companies tend to have a long dividend history and are not easy to change their dividend policy, so dividend stability is high. However, their share prices may still be affected by the overall market environment and economic cycle. When a company is at a low ebb in a business cycle, its stock price tends to fall below the peak period.

Therefore, those stocks with high dividend yields may represent a company that is currently at the bottom of its business cycle, with share prices already relatively low, providing an attractive entry point for investors to look forward to future value-adding opportunities.

Extended Reading: 2024 Premium Income Stock Picking Strategy
US Equity Income Shares
US Equity Income Shares


This content does not constitute any solicitation, solicitation, recommendation, opinion or warranty of any securities, financial products or instruments. Investments involve risks and investors should carefully read the Fund's information and related documentation (including its risk factors). Investors should be aware that the price of the Fund's products can rise and fall, which can change significantly over a short period of time. Investors may not be able to withdraw the amount invested in the Fund, and the Fund's past performance cannot predict future performance.

If similar forward-looking statements are contained herein, such contents or statements shall not be construed as guarantees of any future performance, and it should be noted that actual circumstances or developments may differ materially from those statements. The principal and interest on the bond are repaid by the issuer or guarantor (if any) and the bondholder bears the credit risk of the issuer or guarantor. If the issuer or guarantor fails to fulfill the contract, the bondholder may not be able to recover principal and interest on the invested bond. U.S. GOVERNMENT BONDS ARE ISSUED AND GUARANTEED BY THE U.S. GOVERNMENT AND ARE TRADED OFF-SITE. Investing involves risk, the price of which is influenced by market supply and demand relationships. While there is a higher chance of recouping principal and interest on invested US government bonds, bondholders who redeem bonds early may incur losses due to market risks. The US government is less likely to default on debt principal and interest, but changes in its financial condition and credit rating also have the potential to lead to default.

Therefore, before making any investment decision, clients should carefully read the relevant sales documents, fully understand their risks and the characteristics and consequences of the relevant laws, taxes and accounting, and decide, depending on the individual's circumstances, whether the investment meets the individual's financial situation and investment objectives and whether they can bear the risks involved. Appropriate professional advice should be sought at times.

Disclaimer: The above content does not constitute any act of financial product marketing, investment offer, or financial advice. Before making any investment decision, investors should consider the risk factors related to investment products based on their own circumstances and consult professional investment advisors where necessary.