I was recently reading Investopedia when I saw an interesting article titled “Vietnam Retirement For $200,000.” The author used some budgeting site numbers and calculated that you could retire in Vietnam for as little as $200,000.

They argued that the countries low cost of living made it very easy to enjoy yourself without spending more than $800 – $1,000 per month (kind of true) and that everything is so cheap you could live off your savings for at least 21 years. A nice idea in theory, but does it actually work?

In today’s article I’ll look at what it really costs to live in Vietnam. And I’ll give my own Vietnam retirement guide that’s a little modified.

Enjoy!

1. Hidden Costs Of Living In Vietnam

Living in Vietnam (even a nice neighborhood in a major city) for under $1,000 a month is completely doable. I’ve even documented my personal experience right here.

However, it’s probably not something you can do long-term. In fact, I personally spend about $1,200 – $1,500 most months. And whenever I do cut costs under $1,000 it’s usually to save up for an investment or businesses opportunity.

The reason for this is simple: You want to live comfortably and you’ll face surprise expenses.

Because of this, a Vietnam retirement budget of under $1,000 a month is too small.

If you’re limited to living off $800 monthly, spending $16 on dinner eliminates 2% of your budget. Likewise, taking a spontaneous day trip or exploring the countryside is virtually out of the question.

Additionally, Vietnam requires most foreigners to leave the country once every 90 days. This means buying a plane ticket, booking a hotel, and catching a taxi to and from the airport. Not backbreaking expenses, but it will cost at least $150 – $200.

Vietnam is an affordable country, but you’d still struggle to live off a super tight budget all year. Especially if you aren’t earning any money.

But we’ll talk about that next.

2. Why $200,000 Isn’t Enough For Retirement (But It Is Close)

(A $4 Coffee Would Eat Up 0.5% Of Your Budget)

The Investopedia article assumes you keep $200,000 in a generic savings account and aren’t earning a dime of income. In this case, $200,000 won’t cut it. But with a few minor tweaks you can really improve things.

My first suggestion: Put the bulk of your savings (like $180,000 worth) into certificate of deposits or a money market fund. These are low-risk ways to generate 2 – 3% annual interest.

Then put your remaining $20,000 into a high-interest savings account where you’ll generate another 2% interest on your easily accessible money.

That alone will earn you an extra $4,000 – $6,000 a year. About half your cost of living expenses.

Secondly, I’d look to develop some passive income.

Writing an eBook or running a website costs very little money, and you can easily generate a few thousand dollars a year through these ventures. Case in point, one of my eBooks makes around $960 annually. That covers about a month’s worth of expenses right there.

Lastly, maybe do some part-time work like freelancing or teaching. It’ll keep you busy and help cover the bills.

Of course, once you’re working you aren’t technically retired. And because of that, I’ll show you a second strategy which is far more effective.

3. Vietnam Retirement For $250,000

Saving $250,000 sounds like a lot. But you can easily do it by your late 20’s or early 30’s. I have a lot of friends who got a job, lived frugally, and amassed $300,000 or more by 29.

So, technically speaking, you could be retired in Southeast Asia by age 30. Not bad!

Anyway, here’s what I’d personally do (and fair warning, this is my opinion and not legal or financial advice).

I’d work hard, and invest my money into high-yield dividend funds. I’d also buy long-term bond indexes, since these payout cash on a monthly basis.

In terms of funds (and again, this is my opinion and not legal or financial advice), I’d probably choose SPHD and BLV since both pay dividends every month. This makes it easier to live off your money, and you can easily reinvest any surplus cash.

SPHD yields around 4% annual dividends, and BLV pays about 3%. So investing $120,000 into each nets you $4,800 and $3,600 respectively.

That’s about $8,400 a year, pre-tax.

Next, I’d create two passive income streams before retirement. Writing an eBook or affiliate marketing through a website are your cheapest options. Then I’d build each of these businesses up to where they’re earning $10 a day in passive income (hopefully more but that’s a good starting point).

That brings us another $7,300 before tax. Combined with our investments, we’re earning $15,700 a year (pre-tax).

At 15% tax rate, you’re left with $13,345.

Plus, you’ve got your $240,000 generating passive income for life.

Now what about the last $10,000?

I’d stick $5,000 in a high-interest savings account for your cost of living, and the other $5,000 into a money market (this is your emergency fund, and it’ll generate a small amount of passive income).

Closing Thoughts

Financial independence is a big goal for many. And I think it’s something that’s completely doable if you’re willing to work hard.

If you’re smart and plan carefully, you could easily create your own Vietnam retirement plan for around $250,000.

P.S. If you’re curious about dividends or early retirement, check out this article.