Living off the bank interest rate

Well, it's hard to predict Vietnam's financial situation in 2 years. Assuming that the numbers stay the way they are now, the answer is probably no, depending on where in Vietnam you live. If you want to live a somewhat high-end lifestyle, the answer is definitely no.

I did a quick google search and it looks like the current interest rate in Vietnam is 8% and inflation last year was 6%, so your real interest rate is 2%. This is an optimistic number since this 6% was quoted as the lowest in the last 10 year, so you should expect inflation to be higher, resulting in less than 2% real interest. 2% of 2 billion is 40 million per year or 3.3 million per month, which is about $175 right now.

I'm moving to Vietnam soon and $175 doesn't even cover rent in Saigon. Since you said you'd buy a house, I'll assume that you don't pay rent. Food costs about $2-3 per meal if you're cheap, so let's conservatively assume that you'll spend $150/month on food. So this means that optimistically, your interest will barely cover food, let alone utilities like electricity, internet, water...

The other thing is that when interest rate's that high (8%), it often means they expect the currency to depreciate. So if you expect to spend outside of Vietnam (like for traveling) or buy imported goods and services, you'll find your ability to afford them decrease over time.

So no, not a good idea.

crazybitch wrote:

ANyone doing this right now?
My goal is to move  to vietnam in 2 years,
I WILL NOT get a job or neither will i ever work in vietnam for a living..
Lets say i put 2 bill dong in vietnamese bank, and just live of the interest rate.
and i will buy apartment 1,2- 1,3 bill dong top.
is there anyway i can survive this project?

i want to retire  as soon as possible.
im 30 years old now

In Da Nang you can buy a large house near the beach and rent rooms. You could live without working with the extra rental income. Then again, with your avatar name I wonder if we have lived together before...

Funny, AP.

Inflation cen be 24%.  After Tết everything goes up 10% right there.

  I live in HCM. My current monthly budget is about $4000 usd, being adjusted I have about 1b vnd in the bank but I could not live on the interest alone, like someone recommended rental property is the way to go, that how I earn my money back home and I was able to retire at 50. I recommend you write down every expenses , including housing cost ( rent or buy) for a few months after arriving here to get a better picture.   Welcome to Vietnam......the dream is alive

$4000/month seems extraordinarily high even for Saigon.  We live in a very nice house in Cần Thơ with a housekeeper and eating out a lot and it's barely over a quarter that.  Ok, we own so no rent, but even exorbitant rent only takes you to half of $4000.  Where is it going?!?  Do you have a girlfriend who demands a fortune for her family?

  no GF.  , that was just a starting budget, I'm able to reduce it now. My biggest expense is the taxi, fruit juices at the roof top bars...no " special" lady as if yet. Any hints  in how to meet some?  What works ? The shy type or the Alpha male type?

MrshyONE wrote:

:no GF.  that was just a starting budget, I'm able to reduce it now. My biggest expense is the taxi, fruit juices at the roof top bars...no " special" lady as if yet. Any hints  in how to meet some?  What works ? The shy type or the Alpha male type?

Oh.  Well, I take xe ôm, I won't ride a motorbike here, and I don't do fancy restaurant stuff, like, ever.  A decent cup of coffee a few times a week, a western food meal once or twice a month, but it's street food and market fruit the rest if the time.

You're still not explaining $4000 a month.  You're nowhere near three.

No ideas on meeting women, but if "money for my family" comes up, get up and walk away, fast.  My only impression is that they like goofy, grinning guys.

educatog wrote:

Well, it's hard to predict Vietnam's financial situation in 2 years. Assuming that the numbers stay the way they are now, the answer is probably no, depending on where in Vietnam you live. If you want to live a somewhat high-end lifestyle, the answer is definitely no.

I did a quick google search and it looks like the current interest rate in Vietnam is 8% and inflation last year was 6%, so your real interest rate is 2%. This is an optimistic number since this 6% was quoted as the lowest in the last 10 year, so you should expect inflation to be higher, resulting in less than 2% real interest. 2% of 2 billion is 40 million per year or 3.3 million per month, which is about $175 right now.

I'm moving to Vietnam soon and $175 doesn't even cover rent in Saigon. Since you said you'd buy a house, I'll assume that you don't pay rent. Food costs about $2-3 per meal if you're cheap, so let's conservatively assume that you'll spend $150/month on food. So this means that optimistically, your interest will barely cover food, let alone utilities like electricity, internet, water...

The other thing is that when interest rate's that high (8%), it often means they expect the currency to depreciate. So if you expect to spend outside of Vietnam (like for traveling) or buy imported goods and services, you'll find your ability to afford them decrease over time.

So no, not a good idea.

Dude i dont know what ur on,but you overthinking it.
And besides i clearly ask if anyone had experience with this.
And not some hompu jumpu who never been to vietnam.

Besides i already deposit 1bill dong 3 months ago and it will give me 82mill in interest rate at the end of december 2014.
Was thinking of depost another bill this year,,
So 160million dong year in vietnam, u cant survive on that??
thats 13mil dong a month,
and i will not have to pay house rent because i will buy my own apartment,
And no taxi fares either cause i will buy motorbike of course..

ANd yess i dont want to work for a living in vietnam dont ask me to get a job or something.
im sick of it

$600 a month but you are tying up 1 billion and i believe you only get the full interest payment at the end of the term of the deposit. So you deposit 1 billion for 1 year before you make any money.

Even though my wife and i have a little over 2 billion in savings but she takes care of it

correct, im tying it up for 12 months now,cause i dont live in vietnam right now,
but when i move there at the end of 2015 i will deposit the 2 bill dong at a monthly payout not 12 monhts plan.

u think i survive this don?

besides i always can go bak to norway to work 3-4months in summer if im struggling with my budget,
Can easy make 4-450mill dong. But the plan was to never ever work again..
Everyone i told this to, tells me im crazy,
But everyone wants an a4 life 8-4 job and a housemorgage,20 years payback, thats normal for them.
But thats noway to live for me.

Don't keep your money in a Vietnamese banks.  Sometimes inflation is 24%.  You're better if buying and selling land, or keep the money in your home country and let depreciation of the ₫ masquerade as interest. 

And not working really isn't all that much fun.  I idled for a year.  I hated it.  So I got a Mac and now I write for OSX and iOS.  I used to love Windows but since XP it's just trash.

crazybitch wrote:

ANyone doing this right now?
My goal is to move  to vietnam in 2 years,
I WILL NOT get a job or neither will i ever work in vietnam for a living..
Lets say i put 2 bill dong in vietnamese bank, and just live of the interest rate.
and i will buy apartment 1,2- 1,3 bill dong top.
is there anyway i can survive this project?

i want to retire  as soon as possible.
im 30 years old now

Yes you can.  Because I'm doing it...sort of.  My plans went screwy after the interest rate cut and I didn't count on blowing my money on so many charity projects.  Doesn't matter, I can always return to the States and make more when I need some.

Anyhow you will be bored stiff at 30-ish without a job.  You should find something that you enjoy doing, like charity work or something. 

Would not recommend buying a "condominium", but that's on you.  Since you won't need to work, stay out of the expensive cost of living areas (like Hồ Chí Minh City or Hà Nội ) and live in the outlying areas that give you the ability to go into the urban areas to enjoy the fast pace life.

Go easy on educatog as she has some good points in regards to financial calculations.  You'll need a good and disciplined plan in order to pull off your idea.

I lived in Vietnam for 15 years.

But that doesn't matter, because the question you ask is a purely financial one and should be made with financial calculations. What you failed to take into account is inflation. Historically inflation in Vietnam has been higher than interest rate, so you lose money letting your money sit in the bank, not gaining.

Yes, the number will increase, but that does not mean that you will make money. High inflation means that if you use all of your 2bil to buy something today, you will be able to buy more than your 2bil AND interest can get you a year from now. So even though your number increase, you can buy less stuff. Hence you're losing in real money.

The calculation I did was very simple and if you want to rely on passive income from interest to cover all of your expenses, you need to do similar calculations. You can do what you said and feel like you're making enough money without doing anything in the first two years. But 10 or 15 years from now, your 2 bil will worth something like 500mil in today's money, and the interest from it will not be enough for you to live on.

I'm taking time to tell you that financially your plan is a losing plan and thus is bad. If you're just dead set on it and insult everyone who tells you it's a bad plan, why bother asking?

To make it work, you need to gain money faster than inflation. I'd listen to the other posters and invest in rental property. If you don't even want to manage your property, hire a property manager though I don't know how much you'll learn after what they charge.

educatog wrote:

I lived in Vietnam for 15 years.

But that doesn't matter, because the question you ask is a purely financial one and should be made with financial calculations. What you failed to take into account is inflation. Historically inflation in Vietnam has been higher than interest rate, so you lose money letting your money sit in the bank, not gaining.

Yes, the number will increase, but that does not mean that you will make money. High inflation means that if you use all of your 2bil to buy something today, you will be able to buy more than your 2bil AND interest can get you a year from now. So even though your number increase, you can buy less stuff. Hence you're losing in real money.

The calculation I did was very simple and if you want to rely on passive income from interest to cover all of your expenses, you need to do similar calculations. You can do what you said and feel like you're making enough money without doing anything in the first two years. But 10 or 15 years from now, your 2 bil will worth something like 500mil in today's money, and the interest from it will not be enough for you to live on.

I'm taking time to tell you that financially your plan is a losing plan and thus is bad. If you're just dead set on it and insult everyone who tells you it's a bad plan, why bother asking?

To make it work, you need to gain money faster than inflation. I'd listen to the other posters and invest in rental property. If you don't even want to manage your property, hire a property manager though I don't know how much you'll learn after what they charge.

where u get ur number from einstein?google`?
the inflation in vietnam is not that  high,
Stop acting like a smartass .

If u have lived 15 years in vietnam, u should now that foreigners cant buy land or own house here.
i guess ur a us vietkieu right?  Girl u living in ur own world i see..

And besides i clearly ask if anyone was living of the interest rate in vietnam. and not some 18years old newly gratuaded from school with no experience to answer..

'  That's a boatload of money! 

My expenses, in Hanoi, are under $800 a month.  Yes, it could be done.

There are workarounds to owning land.  I own eight parcels in Cần Thơ and Phú Quốc.

Crazy b*tch - I see that you are set in your ideas and fail to accept other ideas.  Keep in mind other people are trying to help you by sharing their opinion.  Remove your vile comments and realize that you just sound nasty.

ancientpathos wrote:

crazybitch wrote:

ANyone doing this right now?
My goal is to move  to vietnam in 2 years,
I WILL NOT get a job or neither will i ever work in vietnam for a living..
Lets say i put 2 bill dong in vietnamese bank, and just live of the interest rate.
and i will buy apartment 1,2- 1,3 bill dong top.
is there anyway i can survive this project?

i want to retire  as soon as possible.
im 30 years old now

In Da Nang you can buy a large house near the beach and rent rooms. You could live without working with the extra rental income. Then again, with your avatar name I wonder if we have lived together before...

I thought you only lived with women called ' Lan '?

perry88 wrote:

Funny, AP.

Thanks, humor is aways a good thing...

bluenz wrote:

ancientpathos wrote:

crazybitch wrote:

ANyone doing this right now?
My goal is to move  to vietnam in 2 years,
I WILL NOT get a job or neither will i ever work in vietnam for a living..
Lets say i put 2 bill dong in vietnamese bank, and just live of the interest rate.
and i will buy apartment 1,2- 1,3 bill dong top.
is there anyway i can survive this project?

i want to retire  as soon as possible.
im 30 years old now

In Da Nang you can buy a large house near the beach and rent rooms. You could live without working with the extra rental income. Then again, with your avatar name I wonder if we have lived together before...

I thought you only lived with women called ' Lan '?

Lan is a beauty, but she is married and lives in Florida. Loan is my lucky name here in Vietnam. In 18 months my 3 girlfriends have all been named Loan. Back to the topic, I believed rentals are a good way to invest money instread of the bank. I know a couple that live off of $650 per month. I sometimes spend a $1000 or more on alcohol and women. The rest I waste..

I am 35 years old and not working. So people making 5 mil per month you are saying their money is worthless. I don't buy this inflation crap unless you buy high ticket items.

You are also forgetting the power of compound interest. Do the calculation for an average 8 percent over 35 years.

Forget the past. We wont see high interest for a while as Vietnam was a new country than.

Saying all that how much faith you got in Vietnam bank. I prefer a 5 tonne truck as my interest bearing investment in Vietnam.

khanh44 wrote:

I am 35 years old and not working. So people making 5 mil per month you are saying their money is worthless. I don't buy this inflation crap unless you buy high ticket items.

You are also forgetting the power of compound interest. Do the calculation for an average 8 percent over 35 years.

Forget the past. We wont see high interest for a while as Vietnam was a new country than.

Saying all that how much faith you got in Vietnam bank. I prefer a 5 tonne truck as my interest bearing investment in Vietnam.

If they are only making 5 mil a month , I can't see them being able to save much money. Unfortunately your interest only compounds if you leave in it in the Bank, that shoots a big hole in the living off the interest idea.   Plus I hope you are the driver of that 5 ton truck,  ( and it hasn't been driven too often by a VN ).

Hi IOS
How did your land investment pan out, be nice to learn from your experience

zest

Your monies can come in to Vietnam but it can not leave.  Also who knows tomorrow the bank that you invested in can go belly up without warning.  Don't let their propagandas get you.

jryan wrote:

Your monies can come in to Vietnam but it can not leave.

That is untrue. To move money out of Vietnam you just have to go to the bank and do the paperwork.

cruisemonkey wrote:

jryan wrote:

Your monies can come in to Vietnam but it can not leave.

That is untrue. To move money out of Vietnam you just have to go to the bank and do the paperwork.

True, as long as you have a papertrail. If the money is still in the bank and earning interest its much easier to send out. Take it out and use it for other things, then it becomes difficult as you have to show all the paperwork related to this.

crazybitch wrote:

educatog wrote:

I lived in Vietnam for 15 .



I'm taking time to tell you that financially your plan is a losing plan and thus is bad. If you're just dead set on it and insult everyone who tells you it's a bad plan, why bother asking?

To make it work, you need to gain money faster than inflation. I'd listen to the other posters and invest in rental property. If you don't even want to manage your property, hire a property manager though I don't know how much you'll learn after what they charge.

where u get ur number from einstein?google`?
the inflation in vietnam is not that  high,
Stop acting like a smartass .

If u have lived 15 years in vietnam, u should now that foreigners cant buy land or own house here.
i guess ur a us vietkieu right?  Girl u living in ur own world i see..

And besides i clearly ask if anyone was living of the interest rate in vietnam. and not some 18years old newly gratuaded from school with no experience to answer..

He made some very valid points though. Nobody is saying that you can't retire on that amount of money, it's just that there are probably better ways to do it than living of bank interest. Inflation is real (whatever the percentage is), whereas real estate will usually appreciate over a long enough time period (foreigners can buy condominiums). So you would have rental income plus a growing fortune, instead of a shrinking one. Obviously you should first spend some time here before investing, but I think that would be a much more interesting way of using these 2 billions.

As for your current budget, living on 13 million per month is certainly possible, especially if you have emergency money readily available and no rent, but you'll have to be frugal.