Korean Job Discussion Forums

[robot]

got a year's savings, and am wondering how to make it bigger with very little or no risk.

i'm not too keen on stocks, and know nothing about investing, so i was just planning to lock it away at gs bank at 5.8% for a year.

is there a better rate elsewhere? or is there anything else i should be considering?

ROBT.

[Ozabout7or8]

Hi,

I majored in finance at undergraduate level and working in banking for a couple of years. But I am not currently in Korea so I just want to give you some of the right questions to ask and then you can go and find the answers.

1. You need to decide whether you will be in Korea in the medium to long term. This is important because foreign exchange rates come in to play. A small example is if you earn 6% per year interest but the Korean Won depreciates by 6% per year against for example the $US, then if you go back to there to live your money will basically have earned nothing. If you will stay in Korea long term this is not so much of an issue.

2. You basically need to know what you are saving the money for, because this will determine the level of safety you need in your investment. Riskier investments (such as shares or debentures) can earn rates over 10% but you have the chance of losing your initial investment so if the money is crucially important to you you may need to consider safer options. Safe investments include the bank and sometimes real estate but you might want to be careful because of the current housing bubble and it can take alot to get into real estate sometimes.

For a broad stroke, the more important to keep the money safe, or the more short term in which you will need to use it, the safer investment required, and you should go shopping around for the best bank rates. If you can tolerate more risk of loss and/or it is to be invested over the long-term, then you should consider shares/debentures. To do this you just want to ask your current bank about share investing into mutual funds and they will likely be able to refer you to an investment advisor.

3. If you have any loans/mortgages and don't need to money for anything specific then the best advice is to sometimes pay these off but I would need more information before suggesting this. If you want the money later then you would be out of luck. The reason for paying off the loans is that it can sometimes be the best rate of return (saving on interest you don't have to pay)

If you need any more specific advice you could PM me but you should not be afraid to go to your local bank because they often have financial advisors that can help you. It is mostly about a needs assessment along the lines of the questions I have put to you and then the answer can be simple.

Owen

[DanielP]

Take some of that money, and invest it in your financial education.

You can check out www.richdad.com, or some ebooks on being more financially educated. THAT in my opinion, WILL pay off in the long run.


Daniel

[bobbyhanlon]

if you're saving up for something, stick it in a high-interest account like that one. but if not, definitely consider ETFs or mutual funds. in the long run, 5.8% pa isn't really going to get you very far.
if you have any debt, pay it off, or if perhaps consider investing in an academic programme that will get you a greater salary in the future. but if this is not an option, definitely look into ETFs or mutual funds. my parents, for example, know absolutely nothing about investment, but put some money away in funds and doubled their money in five years. not stellar, but much better than what 5.8% would have done for you.

[dogshed]

http://www.fool.com/investing/mutual-funds/2007/05/26/the-4-best-words-of-investing-advice.aspx

Actually just read the whole motley fool site.

Money Magazine's What To Do With %5000

http://money.cnn.com/magazines/moneymag/five_thousand/