How much money do I need to save to buy a house at age 30?

If we want to buy a house or condo, we should have at least 15% of the property's value saved up for the down payment and any remaining balance if we can only secure a partial mortgage. However, to ensure coverage of other purchase expenses, we should aim for around 20% of the property value. If we start working at age 24, we have approximately 6 years to save enough for a house.

However, keeping money in a savings account offers very low returns. Investing, on the other hand, carries the risk of significant losses, potentially delaying the dream of owning a house at age 30. So where can we save our money? Here's the answer.

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Savings Account

This refers to an existing savings account, such as your monthly salary account. The advantage of this type of account is its high liquidity; you can withdraw any amount at any time. Therefore, regardless of whether you deposit money or invest in other financial products, it's always beneficial to maintain a balance in your savings account. In case of emergencies, having a readily available source of funds is beneficial.

Additionally, opening a savings account with some banks may waive bill payment fees or interbank transfer fees, saving you significant money. Furthermore, online savings accounts without passbooks often offer higher interest rates than those with passbooks.

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Fixed Deposit Accounts

These are types of deposit accounts where you deposit money under specific bank conditions to receive a higher interest rate than a savings account. For example, depositing a lump sum without withdrawal for 24 months, or depositing equal amounts monthly for 20 months. You could allocate a portion of your money to a fixed deposit account.

However, you must be sure you won't need the money during the deposit period, as early withdrawal will result in losing the agreed-upon high interest rate.

Therefore, these accounts have lower liquidity than savings accounts because withdrawals cannot be made at any time. However, if you know a definite timeframe for using the money to buy a house, this isn't a major concern.

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Bonds

These are financial products that those saving for a house can invest directly in. Bonds are a type of financial instrument issued by the borrower or debtor, and investors who buy them are in the position of lenders or creditors.

Bond investors receive regular interest payments from the issuer and the principal back at the end of the bond's maturity, a fixed timeframe. They can also sell before maturity, making them suitable for investments intended to finance a house purchase.

Bonds can be bought, sold, and traded on the Bond Electronic Exchange, operated by the Stock Exchange of Thailand. This offers stability and reduces liquidity risk.

However, direct investment in bonds requires a minimum investment of 100,000 baht. Those with limited funds may not be able to invest gradually. Nevertheless, indirect investment in bonds is possible through money market mutual funds.

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Money Market Mutual Funds

If you don't have a large sum of money to invest at once but still want to invest in bonds, you can invest indirectly by purchasing units in money market mutual funds. These are managed by asset management companies that raise capital from investors to invest in bank deposits and short-term debt instruments such as treasury bills, promissory notes, and bonds.

This also includes corporate bonds. The key advantage of money market mutual funds is... The minimum investment amount is low, only 500-1,000 baht, enough to purchase investment units. Furthermore, the return is similar to a fixed deposit account, but with much higher liquidity; investors can buy and sell investment units every business day. For sold units, the proceeds are received the following day after the sell order is placed.

All four financial products we've presented here are attractive options for saving and investing over a period of approximately 6 years, starting from the beginning of your working life, to have enough money to fulfill your dream of buying a house by the age of 30.

However, each investment type has different advantages, disadvantages, limitations, and risks. Investors should carefully study the details with the financial institution before making an investment decision and should diversify their investments across multiple sources to mitigate risk.

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Thank you for the valuable information from DD-Property.