I always keep savings worth 6 months of expenses

The first step is setting aside an emergency fund that covers at least six months of expenses. If you spend VND10 million (US$391) a month, make sure you have a saving of at least VND60 million. This money should be in cash or assets that can be easily converted to cash.

A person is putting money into a jar. Illustration photo by Pexels

If you are the main income earner in your household, this fund should cover your entire family's expenses. Personally, I keep a year's worth of money for emergencies.

Once your emergency fund is in place, the next priority is a rainy day fund—savings for planned purchases like a TV, fridge, washing machine, motorbike, or car. You can divide this fund into different categories depending on your needs.

After that, focus on building a growth assets fund. This is money invested in assets that steadily gain value over time, such as real estate, gold, savings accounts, U.S. dollars, blue-chip stocks, government bonds, or mutual funds. These investments typically grow by 8-15% annually.

Finally, allocate a small portion, around 5% of your net asset value, to high-risk investments. This should be money you can afford to lose. If you win, great. If not, you move on.

I always advise young people to follow this method, yet many ignore it. They prefer to go all in on risky investments and never seem to grasp the value of steady, methodical wealth-building.