Changing your life by investing in land is a pipe dream

Until now, we have always thought that putting money into savings or investing in bonds and mutual funds could only yield about 7-8% per year. It might reach 10% in the best years, but in tougher ones like 2023 when bank savings interest rates were only at 5.5%, the yield is not enough to offset inflation.

Complaints about currency devaluation and soaring prices are common. I think these issues primarily affect those with limited funds or those trapped in consumerism.

For example, if your monthly expenses are VND10 million ($410.76) this year, but unexpectedly rise to VND20 million next year due to additional costs like your child’s education, then the impact of inflation would be significant.

I have also given much thought to the Financial Independence, Retire Early (FIRE) movement, which encourages working diligently and saving from an early age.

Annually, people who follow this movement strive for an earning of around 7-8% of their total savings, which is enough to sustain themselves without the need to work.

Are these individuals not as concerned about inflation?

So I begin to wonder, if inflation was 5% in 2023, which means if you spend VND10 million a month in 2023, you will need to spend VND10.5 million a month in 2024.

However, if you have a lot of savings in 2024, for example, VND15 million in this scenario, then is inflation really a problem?

I am aware that many people today are apprehensive about depreciation and quickly invest in land, guided by the belief that “population multiplies, but land does not.”

However, this comparison might be flawed considering if you invest VND2 billion in land on the city’s outskirts, hoping to sell it after five, seven, or even 10 years, can you really be sure that prices will not decline?

Our parents’ and grandparents’ time was the “land fever” era, where numerous people became wealthy quickly by owning a lot of land, but even then there were countless people who lost everything by buying land at its peak prices.

Meanwhile, land prices are currently returning to their real value.

Land and house prices are plummeting everywhere except in densely populated city centers, where land prices remain exorbitantly high and are practically unaffordable for most people.

While some would advise that “if you have money, buy land,” I tend to think a lot more when I have money.

The idea of leaving several billions of dong to become idle by buying land and waiting for years in hopes that someone will eventually buy it for 50% more than the purchase price is, to me, a very long-term and uncertain gamble.

I believe that if you have a substantial amount of money, say billions of dong , you do not have to fear inflation because inflation needs to be considered in relation to your spending and income.

The thought of investing all your capital in real estate, holding it for years with the unrealistic hope that you will become wealthy and all the while constantly worrying about repaying debts is quite daunting to me.

With that amount of money, I would rather put it into a savings account and invest in bonds and stocks, withdrawing profits annually to improve my quality of life.

This could include spending on travel, learning new skills, or home renovations. Isn’t this approach far more beneficial?

How about you, fellow readers? If you had billions of dong, would you tie up your money in suburban land for a long and uncertain period for a slim chance of changing your life?

Or would you continue to work and withdraw savings annually to cover living expenses and improve your quality of life?

*This opinion from reader Tran Minh Tri was translated into English by AI. Opinions shared by readers are personal and do not necessarily match VnExpress’ viewpoints.