Considerations

In addition to inflation, there is another factor that we did not consider in the calculation yesterday: If everything goes according to the plan, you will be leaving the principal (and the apartment) as legacy when you die.

Is this what you prefer?

Let's consider the answer no first. In that case, you can take away a portion of the principal for your living - plus the investment return from the principal, and minus the inflation. The target of this scenario is to leave no money at the end.

It becomes immediately obvious that if your investment return is the same as the inflation, the two factors cancel out each other. In that case, you can calculate by simple arithmetic. If you have 50 years to live and you need $30,000 each month, an original principal of HK$18M is necessary.

PS. In this simplified calculation, I actually borrow the concept of discounted cash flow valuation. In reality, the amount you take each month increases with time according to the inflation rate, but the discounted present day value equals HK$30,000 today. That's how you maintain the standard of living in a moving world.

PPS. The real motto of the above discussion is: Investment of your savings is always necessary, not because you want to earn money, but you need to negate the effect of inflation.