Should I save 200 million or invest in gold and stocks to make a profit?

A year ago, with 200 million VND saved, Ms. Nguyen Thi Hai decided to deposit it in the bank for a 12-month term, with an interest rate of 5.8%/year. Because she had no need to invest, she thought that saving money in the bank was safe and had a regular interest rate.

The maturity date of the savings book is approaching, Ms. Hai sees that the bank interest rate is on a downward trend, if she continues to deposit, the interest she will receive will be less. Learning about the gold market, she sees that the price has increased sharply. Last year, the price of gold at this time was only 81 million VND/tael, now it has exceeded 124 million VND/tael.

Ms. Hai is in a difficult situation. Should she withdraw her savings to buy gold? Or should she just leave it there, even though the interest rate is a little lower but still safe?

Speaking to VietNamNet reporter, Mr. Nguyen Tuan Anh - Chairman of the Board of Directors of FinPeace, said that the root of personal finance lies in the ability to identify financial products around and determine one's own needs. Ms. Hai's story is a typical example.

A year ago, with a savings of 200 million VND, she chose to save because she had no need to invest. However, after only one year, she began to be interested in investing - stemming from witnessing the sharp increase in gold prices. This is a remarkable change in financial awareness and needs.

However, deciding to invest only when the price of gold increases is potentially risky. Gold increased from 81 million to 120 million VND/tael before she realized the opportunity, and if she bought at the peak, the price could completely drop to 100 million or increase to 150 million. Investing based on market emotions without a long-term plan can easily put individual investors at great risk.

According to Mr. Nguyen Tuan Anh, there are two groups of financial purposes.

Basic needs: Save money to prepare for risks such as unemployment or unexpected expenses. This is a safe foundation for personal finances.

Future development needs: Once they have passed the stage of financial security, many people aim for long-term goals, such as investing for their children to go to college.

With this goal, investors need to determine the expected return (for example 10%/year) and choose a suitable portfolio. If the bank interest rate is only 5.8%/year, the target will certainly not be achieved within the expected time.

Mr. Tuan Anh believes that investing for less than 1 year is often speculative and suitable for professional investors. On the contrary, with a 3-7 year target, individual investors should prioritize stable growth channels and a strategy of buying and accumulating over time.

Instead of chasing short-term fluctuations, financial experts recommend linking investments to a clear future goal. If Ms. Hai wants to prepare money for her child to go to college in the next 6-7 years, she needs to determine an expected return to achieve that goal.

From this yield level, you can look for suitable investment channels. If the target requires a yield of 10% while the current bank interest rate is only below 5.8%, then just saving will not be enough to achieve the set goal.

Mr. Tuan Anh suggests the option of still saving, but using the interest to buy gold or stocks periodically. This is a safe and effective option, especially for those new to the market.

In the case of gold accumulation, you can continue to deposit 200 million VND in the bank, then use the interest received to buy gold in small quantities (for example, half a tael or one tael) when you have enough to accumulate for one purchase.

This solution has the advantage of reducing psychological pressure, not having to worry about "speculating" or buying at high prices. Consistently buying periodically helps you get used to investing, understand the gold market better without having to face too much risk. Besides, spreading the risk still maintains the safety of savings deposits while still having the opportunity to accumulate gold.

In the case of periodic asset accumulation (SIP - Systematic Investment Plan ) with assets being stocks, you can choose ETF fund certificates or stocks of leading listed companies in the VN30 group that are still growing well. SIP is a method that has been tested and widely applied in the world .

By doing this, Ms. Hai can periodically take interest from savings to invest in stocks. Investing in stocks requires more research and knowledge, but has a higher growth opportunity than saving.

Regular investment does not require waiting until you have surplus. Ms. Hai can take the interest and can set aside an additional 5-10% or 20% of her monthly income, doing it regularly and for a long time, creating a foundation for the future.

The secret lies in compound interest, each dollar earns interest and that interest continues to be reinvested, creating a sustainable growth cycle. Time is the most patient companion of long-term investors.

The good thing about this method is that it is transparent and easy to track. By transferring a fixed amount each month, investors will clearly see their progress step by step. Set up once, the system will operate automatically, minimizing the possibility of "forgetting" or spending all to save, and when needed, it can still flexibly adjust to new goals, but with a foundation of accumulation.

Source: https://vietnamnet.vn/200-trieu-nen-gui-tiet-kiem-hay-dau-tu-vang-chung-khoan-de-sinh-loi-2432987.html