Investing 500,000 Won a Month: Savings vs. ETF After 3 Years
For three years, I put half into savings and half into ETFs and compared the results. To get to the conclusion first: it's case by case, but in my case ETFs won.
But what mattered wasn't the return—it was "Can I hold on?" When ETFs hit -15%, I got shaken and almost cut my losses twice.
The criteria I settled on are these:
1. If you'll need the money within 3 years, go with savings, no question
2. If you can handle volatility, go with ETFs; if not, a mix
3. Always set up automatic transfers
In the end, what mattered most wasn't the product but consistency.
9 answers
For real, consistency really is the answer.
Isn't it a bit premature to conclude from a 3-year backtest that the ETF won? Depending on which period it covered, the results could completely flip, and there's no way to tell whether it won because you did well or because the market was good. You should at least disclose the period and tickers if you want it to be convincing.
I was the opposite lol. After seeing my ETF hit -20%, I ended up cutting my losses, and since then I’ve only been putting money into savings. I guess the conclusion is that it’s different for everyone.
No. 3, automatic transfers—I really relate to this. Don’t trust willpower; trust the system. I turned off all app notifications and left only the automatic transfers, and that’s about the only reason I’ve managed to keep it up.
Isn't 3 years a bit short?
Bringing up mindset is the most realistic point. Everyone just calculates returns, but no one actually asks themselves whether they can handle being down 15%. I deliberately ran a small amount for a year just to check that for myself.