Is saving 500,000 won a month better, or dollar-cost averaging into ETFs?
I'm a recent graduate just starting my career, and I have about 500,000 won of spare cash each month.
I'm currently in a 3-year savings plan, but I've heard a lot that accumulating ETFs is better when considering inflation, so I'm conflicted. However, if this isn't short-term money and can be tied up for more than 5 years, I'd appreciate your advice on which option would be better.
10 answers
Agreed
If you can lock your money up for 5+ years, ETFs are the better choice. Savings accounts offer fixed rates, so they’re reassuring, but they barely keep pace with inflation.
I had the same concern when I was new to the workforce, and my conclusion was to split it half and half. I always kept about 3 million won as an emergency fund in a deposit account, and only put the rest into recurring investments. Even if you lock it up for five years, there’s no guarantee that sudden expenses won’t come up.
Well, first you need to confirm whether the money you can lock up for 5+ years is really your own money. If you're just starting out in the workforce, there's a high chance of major expenses within 5 years—marriage, moving, a car, etc. If it's money left over after setting all that aside, then going with ETFs is the right call.