Maintaining That 100,000 Baht Pm Lifestyle

[Briggsy]

ISAs are one of the best deals that the Chancellor of the Exchequer offers the British taxpaying public. One way around it is simply to lie on the form and tick the box which states you are a resident for tax purposes in the UK. The chances of you being caught out are low. You can only invest 7000 pounds per year though. As you're aiming for a total of 600,000+ pounds you're probably putting away a 5-figure sum annually so you would need a home for the rest of your savings. If you do decide to go down the route of non-residency for tax purposes, they may not serve your purpose. Regular shares and unit trusts may well be better if you're not happy evading some income tax on investment income. You can invest as much as you can lay your hands on! However you would still need to keep, say, 30% of your savings in a regular savings a/c to reduce risk and keep some funds easily accessible.

Edited January 20, 2007 by Briggsy

[t.s]

I can't really break it down mate - its not an exact science. I have a house in Thailand so the 100K would go on living expenses, sanook, travel and all that. Really, 20K GBP is not much if you fancy getting a plane for an overseas holiday or a local jolly. I spend much more than that when I'm on a month long jolly to Thailand nowadays....

I guess you know what the average Thai person gets?

I know many people with families, car and house re-payments etc who have a happy life on 20,000 baht. You need five times that for living expenses - what a jerk.

that just plain offensive. he is not the average thai. he is someone who has expectations and requirements fo a comfortale lifestyle in LOS that are in line with what he would have back home. who are you to judge?

with inflation, i dont htink 100k is much money at all. i live a comfortable life in bkk, and it is getting more expensive all the time.

perhaps your expectations are low, congratulations, but dont think others are willing to live like you.

bitter perhaps, see someone in a fortuner that ruined your day?

[Lucifer]

Back to the flat renting..

Someone mentioned six flats in Scotland at 100k each. Bad idea. It means six lots of tennants, six lots of maintainance.

Way too much hassle. Cheap flats=rubbish tennants(rule of thumb).

Renting a one/two bedroom flat in London at £550.00 a week will get you a proffesional person/couple, who will not piss you about.

I know, I rent flats in London.

I tell my tennants that they must maintain the flat themselves, and any expendature(?) can be deducted from the rent and invoice to be posted to me. So far this has cost me £172.00. Not bad for 10 years of renting.

Rent to proffesionals, but make sure you get refferances. Extremelly important.

Also, these type of tennants tend to rent for a few years at a time.

[chiang mai]

What do you reckon Gents?

To maintain a 100,000 THB income which rises with inflation and thus maintains the same income 20 years down the line, I reckon on the following:

670,000 GPB investments at 5% (HSBC non-resident bonds – money safe as houses)

3% living costs / 2% reinvested

3% = 20,100 GBP x 60 THB (on the safe side) = 1,206,000 THB / 12 = 100,500 THB P/M

Based on the 2% reinvestment the 3% pay out would rise every year, hopefully in-line with inflation

That’ll pay for overseas trips, nice motor, plenty of beer and some western luxuries. hel_l, even a few Eden club visits.

###### – I have to stay in the dunes longer

So, for anyone thinking 50K or equivalent lifesytle is enough - cut the investment in half, and so on.

I generate (not spend) a monthly income of over 100k baht every month using fixed rate off shore bonds, own my own condo and my car. In this day and age it is not unusual for people who are 50+ to have liquid assets of over £500k and I do not regard that as a huge amount. Increases in real estate prices in the UK and elsewhere have meant that people like me can cash in their option and live comfortably in places like Thailand. By the same token I understand that much younger people who teach and earn only 25k baht a month do not have such perceived wealth. It's all relative to age and the amount of time each has spent working and investing. The problem for both of those groups is that whilst they may be okay now here in LOS, they are both in trouble financially if they decide to return to say England and start new lives there again.

[Lucifer]

What do you reckon Gents?

To maintain a 100,000 THB income which rises with inflation and thus maintains the same income 20 years down the line, I reckon on the following:

670,000 GPB investments at 5% (HSBC non-resident bonds – money safe as houses)

3% living costs / 2% reinvested

3% = 20,100 GBP x 60 THB (on the safe side) = 1,206,000 THB / 12 = 100,500 THB P/M

Based on the 2% reinvestment the 3% pay out would rise every year, hopefully in-line with inflation

That’ll pay for overseas trips, nice motor, plenty of beer and some western luxuries. hel_l, even a few Eden club visits.

###### – I have to stay in the dunes longer

So, for anyone thinking 50K or equivalent lifesytle is enough - cut the investment in half, and so on.

I generate (not spend) a monthly income of over 100k baht every month using fixed rate off shore bonds, own my own condo and my car. In this day and age it is not unusual for people who are 50+ to have liquid assets of over £500k and I do not regard that as a huge amount. Increases in real estate prices in the UK and elsewhere have meant that people like me can cash in their option and live comfortably in places like Thailand. By the same token I understand that much younger people who teach and earn only 25k baht a month do not have such perceived wealth. It's all relative to age and the amount of time each has spent working and investing. The problem for both of those groups is that whilst they may be okay now here in LOS, they are both in trouble financially if they decide to return to say England and start new lives there again.

....and thats the reason to buy and rent a flat in London.

If things go tits up in LOS, you can return home, and continue where you left off. Financially speaking.

[Desertexile]

What do you reckon Gents?

To maintain a 100,000 THB income which rises with inflation and thus maintains the same income 20 years down the line, I reckon on the following:

670,000 GPB investments at 5% (HSBC non-resident bonds – money safe as houses)

3% living costs / 2% reinvested

3% = 20,100 GBP x 60 THB (on the safe side) = 1,206,000 THB / 12 = 100,500 THB P/M

Based on the 2% reinvestment the 3% pay out would rise every year, hopefully in-line with inflation

That'll pay for overseas trips, nice motor, plenty of beer and some western luxuries. hel_l, even a few Eden club visits.

###### – I have to stay in the dunes longer

So, for anyone thinking 50K or equivalent lifesytle is enough - cut the investment in half, and so on.

I generate (not spend) a monthly income of over 100k baht every month using fixed rate off shore bonds, own my own condo and my car. In this day and age it is not unusual for people who are 50+ to have liquid assets of over £500k and I do not regard that as a huge amount. Increases in real estate prices in the UK and elsewhere have meant that people like me can cash in their option and live comfortably in places like Thailand. By the same token I understand that much younger people who teach and earn only 25k baht a month do not have such perceived wealth. It's all relative to age and the amount of time each has spent working and investing. The problem for both of those groups is that whilst they may be okay now here in LOS, they are both in trouble financially if they decide to return to say England and start new lives there again.

....and thats the reason to buy and rent a flat in London.

If things go tits up in LOS, you can return home, and continue where you left off. Financially speaking.

Lucifer - the London flat gig seems good. I agree that one flat to good tenants is worthwhile. I rent to my Bro in the UK and a good tenant is worth their weight in gold.

A friend of mine is buying flats off plan in Canarywarf - the deal is 20% down and nothing to pay for 18 months until completion. By that time, hopefully, he'll sell on and make a few quid or rent.

Do you use an agent?

Changmai - good post! The cash does certainly go if you want a few luxuries. I think that is the real issue though - if you had to make the move back to the Uk. Trying to buy a house again at inflated rates or trying to survive on your interest pay out doesn't sound good.

20K per year for a UK retirement really is pant unless your idea of a treat is a tin of salmon and a 20 quid rub. It's a whole different ball game. I work with guys here that would consider a UK retirement with less than 50K.

Cheers Gents for the advice so far.

[Desertexile]

I assume you've spent a considerable time in LOS already. Would you like to give a rough breakdown of how you would spend 100,000? I'm not going to dispute it. I'm just interested in what you would spend that on.

all positions in USD (multiply by 35 to obtain THB)

cost of living................................1.200.-

foreign health insurance................ 520.-

electricity..................................... 357.-

2 cars (no depreciation)................ 250.-

visa extension, multiple reentry...... 50.- (including agent's fees

2 phone lines and internet............. 85.-

2 TV satellite subscriptions............ 80.-

homeowners asscociation.............. 75.-

commercial cleaning company......... 95.-

live-in housemaid.......................... 200.-

driver.......................................... 200.-

gardener...................................... 200.-

house maintenance....................... 285.-

company expenses....................... 215.-

pocket money wife...................... 1.000.-

pocket money self...................... 1.000.-

vacations.................................. 1.000.-

unforeseen............................... 1.000.-

============================

total............................................$ 7.812.- = THB 273.420.-

Dr Naam - that is a tasty lifestyle. Good for you!

What did you do back in the world to afford you that kind of monthly pay cheque?

[sendbaht]

I find you far from a "jerk" son, keep the idea and go for it.

[Desertexile]

I find you far from a "jerk" son, keep the idea and go for it.

Thanks mate - and thanks for the PM.

I'm 5 years into the self imposed exile and I've another 5 years before I hit the magic cash goal.

Good luck to you and your Mrs!

[Naam]

Dr Naam - that is a tasty lifestyle. Good for you!

What did you do back in the world to afford you that kind of monthly pay cheque?

i am a retired physicist but i hold also an M.A. in mech. eng.; worked for years in the desert, the african bush and locations (where i wouldn't advise any of my enemies to go) building industrial complexes/factories including running them for the first several months till the locals took over. "work" at that time meant 14 hours a day, seven days a week and dreaming of work when sleeping. received princely tax free remunerations and all possible expenses and perks (you name them i got them) the easiest way that money piles up. no way to spend any money except when stealing a few days vacations abroad.

made and kept my first million in a savings account because i had no bloody idea about investing. much later i used my mathematic capabilities and taught myself as an autodidact about making money by investing going alternative pathways. turned out that i could make more dough by sitting in an airconditioned home instead of crawling around in 40ºC heat. quit my job when i was 46 and concentrated on letting my capital work hard under my personal supervsion. that was 17 years, one month and 21 days ago. never really regretted quitting my job although i liked very much what i was doing. now i am an old man (no heirs except a good asian wife of nearly 28 years) and try to enjoy life a bit by trying hard not to sit 10 hours a day surrounded by 4 PCs staring at half a dozen screens. it used to be fun making money, but it isn't anymore once a certain saturation point has been reached.

progress is slow i have to admit. built a home in Thailand (designed by ourselves) last year (duration ~12 months which nearly killed me or i could have well ended in a thai jail for manslaughter and premeditated murder serving at least a life sentence) but somehow i managed. read already two books, planning to read more books and (as mentioned) enjoy life. does that answer your question?

p.s. i live in a suburb of pattaya on a tiny lot of one rai in a gated community. my dream would have been to live up country on fifty rai, living a rural lifestyle, raising all kinds of animals, keeping half a dozen dogs and perhaps growing my own vegetables. alas, the old lady would have hit me with a hard object faster than i could have said "Isaan Province". my favourite thread in TV is "how was your day in Isaan?" i bloody envy those guys! some people have all the luck.

Edited January 21, 2007 by Dr. Naam

[ColPyat]

Back to the flat renting..

Someone mentioned six flats in Scotland at 100k each. Bad idea. It means six lots of tennants, six lots of maintainance.

Way too much hassle. Cheap flats=rubbish tennants(rule of thumb).

Renting a one/two bedroom flat in London at £550.00 a week will get you a proffesional person/couple, who will not piss you about.

I know, I rent flats in London.

I tell my tennants that they must maintain the flat themselves, and any expendature(?) can be deducted from the rent and invoice to be posted to me. So far this has cost me £172.00. Not bad for 10 years of renting.

Rent to proffesionals, but make sure you get refferances. Extremelly important.

Also, these type of tennants tend to rent for a few years at a time.

That someone was me. I have never mentioned though Scotland.

I have said that one is better of with that kind of money to find undervalued markets, and invest in them, and not in a boom market such as London. That does not equate to become a slumlord. That sort of money buys you in cash one small flat in London, and if you get financing, maybe two or three flats at most. If you want to invest in places such as London or Paris - you better come with several million pounds.

Very risky. One bad tenent, and your whole financial calculations will be off. One crash in the market, and you are gone.

Common sense is to spread your risk, and buy a whole apartment complex. In many European countries what can buy you one small flat for in London, can buy you a midsized apartment block. Management is available and not very expensive. And if you do your homework - you get in excess of 10% returns, plus a solid appreciation. And that is all that counts when you invest in real estate long term - returns and appreciation, and not how fancy the town or country is where you invest.

You may be lucky with your tenents, but things can go the other way. I have had "professional" tenents go bonkers on me, destroying the apartments, not paying rent, and whatever. If you just have one apartment, then you are in trouble. It can take ages to get tenets out via the court system. If you have ten or more apartments, you risk is evenly spread.

That should be common sense.

[NovaBlue05]

100K of disposable income is a great target. Just cuz you have it doesn't mean you spend it every month. Some months maybe more...most months probably less. Im sticking it out for 4 more years and then retire to Isaan. I have 21 years in now but my govt pension is backloaded so it doubles between 20 vs 25 years. It would almost double again for another 5 years but I just dont think I could pull another 9 years as I would likely have no operating brain cells left. By that time , my pension and modest investments should bring me in 100k - 120k /mo after setting up housekeeping. This would allow me to keep my house rented in the US...for a period anyway.... in the event I needed/wanted to bail and go back. I want to travel as well but my travel interests are more focused on Asia and developing regions rather than back to the US. At that point, I will have no real ties family wise in the US anyway.

Chok Dee to ya!

[Moonfruit]

Bearing in mind that the OP is a young fella, 100,000thb/month just isnt gonna cut the mustard in my opinion.

Im a (relatively) young guy myself. Ill be 30 later this year. Something missing from many of the above posts is the fact that young guys will end up getting married and have kids. When this happens, your living cheap lifestyle goes out of the window as you want to provide better living for your wife and most especially your kids.

Before being married here in the LOS, i lived alone on about 40,000THB/month, and it was a struggle. I would go out twice a week. I lived in a decent apartment (about 10,000/month) and have a taste for farang food. Factoring in a trip to the beach every month it was all gone plus a little of my savings every month.

Now i am married (my wife isnt Thai, i must be one of the only farangs that came to thailand and ended up marrying another foreigner!). I have 2 kids. Between us, we pull in over 200,000THB/month. Now, figure in rental of 2 bedroom accomodation. International schooling (the good Thai demonstration schools cost more than international schools and are IMHO better educational institutions!) Vehicle running costs, UBC tV, 2xcellphone bills, broadband internet bills et al. UBC, cellphones and internet run at over 6,000THB.

I certainly do not live an extravagant lifestyle on this amount. I work 80-90hours/week, and so dont go out very much. Once a week now for a few hours on a sunday night. Max spend is 2,000THB. I havent bought any new clothes in over six months, and when i do i buy MBK specials. The only clothing i splask out on is Guess jeans at 4000THb/pop.

Persuing hobbys. You wanna buy a computer, you will allways be buying peripherals. You wanna go rock climbing you will always need another rope. You wanna go waneboarding, you will need a board. Whatever, you get the picture.

Now we havent even covered holidays abroad. Im British, so a family holiday for 4 is gonna set me back 200,000THB. If i was single it would still set me back 600-70K.

Anybody who can get by on 25,000THB/month and live comfortably, i really do take my hat off to them. In my opinion it simply isnt possible.

Every month, we have nothing left. We are lucky in the fact that we both own property in our home countries, and that is our fallback.

Here, my bottom line is this.

A single guy can live here in a lifestyle to which he is accustomed with nice dwellings and few beers and whatever on 60,000THb/month on which he might stand a chance to save a bob or two.

A younger guy needs a hel_l of a lot more!

[sfokevin]

Going back to the original thread - It seems that 670K BP (1.3 million USD) is a rather high number required to get you to a 100K baht/month... Is your assumption that you will need the 670K (plus inflation cushion) at the end of the 20 years? If your plan is retirement (and then death) seems like you could spend down some of the principal over the 20 years... with this assumption you can start with a smaller nest egg?...

[Lucifer]

Back to the flat renting..

Someone mentioned six flats in Scotland at 100k each. Bad idea. It means six lots of tennants, six lots of maintainance.

Way too much hassle. Cheap flats=rubbish tennants(rule of thumb).

Renting a one/two bedroom flat in London at £550.00 a week will get you a proffesional person/couple, who will not piss you about.

I know, I rent flats in London.

I tell my tennants that they must maintain the flat themselves, and any expendature(?) can be deducted from the rent and invoice to be posted to me. So far this has cost me £172.00. Not bad for 10 years of renting.

Rent to proffesionals, but make sure you get refferances. Extremelly important.

Also, these type of tennants tend to rent for a few years at a time.

That someone was me. I have never mentioned though Scotland.

I have said that one is better of with that kind of money to find undervalued markets, and invest in them, and not in a boom market such as London. That does not equate to become a slumlord. That sort of money buys you in cash one small flat in London, and if you get financing, maybe two or three flats at most. If you want to invest in places such as London or Paris - you better come with several million pounds.

Very risky. One bad tenent, and your whole financial calculations will be off. One crash in the market, and you are gone.

Common sense is to spread your risk, and buy a whole apartment complex. In many European countries what can buy you one small flat for in London, can buy you a midsized apartment block. Management is available and not very expensive. And if you do your homework - you get in excess of 10% returns, plus a solid appreciation. And that is all that counts when you invest in real estate long term - returns and appreciation, and not how fancy the town or country is where you invest.

You may be lucky with your tenents, but things can go the other way. I have had "professional" tenents go bonkers on me, destroying the apartments, not paying rent, and whatever. If you just have one apartment, then you are in trouble. It can take ages to get tenets out via the court system. If you have ten or more apartments, you risk is evenly spread.

That should be common sense.

No it wasn't. It was Neeranam.

Common sense should tell you that the thread starter wants to retire. Not piss about with ten flats, ten tennants etc.

'You may be lucky'. No I'm not. It's called doing your homework and getting good refereances.

So you've had 'professional' tennants who pay £500-600 a week for a one bedroom flat go bonkers have you? That simply means you've not done your homework. Nothing to do with luck.

[Naam]

"Common sense should tell you that the thread starter wants to retire. Not piss about with ten flats, ten tennants etc."

*****

in this respect i'd like to add my two cents (for what they are worth). even totally drunk i'd never consider putting any part of my investments in immobile rental property thus being at the mercy of markets and tenants and complete paralyzed to make a move should the necessity arise. except for the roof over our head, a condo abroad for exclusive personal use once in a while and some building land abroad which does not need to be cared for my alpha and omega was always "never buy anything which you can't sell 30 minutes later (if the markets are open)!"

London and Paris are booming since years, no doubt about that. other european cities (especially in Germany and Italy with its tenant protecting laws) are a bust.

[maccaroni man]

i really don't understand why the op is being attacked for asking about a standard of living 100k baht provides. As he said this will include travel, entertainment, housing and basic running cost. I for one can say with a family of 3 that 100k goes very quickly and quite frankly i can not run my modest household on that amount. also when people compare salaries with teachers at 25k that is not real as real teachers earn 100k including, housing, and airfares home.

[bmanly]

I agree with you Dr Namm with regards to "immobile rental property". I had rental property for many years but when the boom came I sold out. Whilst you can get lucky and get a good tenant that never misses a payment you can equally get a total pig of a tenant. I used the facilities of Licensed Real Estate Agencies that do all the background checks on prospective tenants and we still got duds. When the time came to sell the rental property the tenant demanded a rental reduction just because of the inconvenience they got from open for inspections. An eviction from start to finish takes 2 Months here in OZ and you may never get back the money they owe you. Yes you can insure against this but if they trashed the place as well it could take weeks to repair and then you need to find a new tenant.

Plus in some Countries the tax is terrible, Australia is one such place.

We get charged for land tax, income tax, massive stamp duty tax when you buy, capital gains tax when you sell as well as real estate agents fees. Plus the law here says we owners have to pay for water rates, council rates, maintenance levies, all repairs and all insurances. After tax and all the ongoing costs we were getting a return of 3% on our investment. Sure we get capital appreciation but is it worth all this?

Now I invest in portfolio of shares and cash investments. My stocks return me tax paid income of about 6% and I never have to worry about a thing. I can liquidate all my assets for about $600 in broker fees and I can do the lot in about 15 minutes online and have the money in the bank 3 days later. No checks, no waiting, no pullouts of buyers, and best of all no lawyers. I am far more happier with these investments than any real estate one that I ever had. The last thing I need is when I am in Thailand having the Real Estate Agency calling me with big problems. Everybody is different but for me I don't need the hassles of "immobile rental property". Best wishes to everyone whatever your investments may be.

[Heng]

i really don't understand why the op is being attacked for asking about a standard of living 100k baht provides. As he said this will include travel, entertainment, housing and basic running cost. I for one can say with a family of 3 that 100k goes very quickly and quite frankly i can not run my modest household on that amount. also when people compare salaries with teachers at 25k that is not real as real teachers earn 100k including, housing, and airfares home.

Some folks are resentful. And under the current law, there's very little upward movement (and therefore little upward movement in income... with the exception of the minority who don't burn their bridges and maintain and manage diverse investment/property portfolios overseas) for falangs here once they are 'permanently' living here. Thus to a certain extent it's understandable... nothing wrong with being competitive, but IMO it's kind of unhealthy for these folks when it's always assumed/believed that anyone with a higher income is a jerk, wasteful, living on credit, a criminal of somekind, etc. In the end it'd probably be better to just accept that there will always be those with more and less, and to be happy with what you have.

[Desertexile]

Dr Naam - that is a tasty lifestyle. Good for you!

What did you do back in the world to afford you that kind of monthly pay cheque?

i am a retired physicist but i hold also an M.A. in mech. eng.; worked for years in the desert, the african bush and locations (where i wouldn't advise any of my enemies to go) building industrial complexes/factories including running them for the first several months till the locals took over. "work" at that time meant 14 hours a day, seven days a week and dreaming of work when sleeping. received princely tax free remunerations and all possible expenses and perks (you name them i got them) the easiest way that money piles up. no way to spend any money except when stealing a few days vacations abroad.

made and kept my first million in a savings account because i had no bloody idea about investing. much later i used my mathematic capabilities and taught myself as an autodidact about making money by investing going alternative pathways. turned out that i could make more dough by sitting in an airconditioned home instead of crawling around in 40ºC heat. quit my job when i was 46 and concentrated on letting my capital work hard under my personal supervsion. that was 17 years, one month and 21 days ago. never really regretted quitting my job although i liked very much what i was doing. now i am an old man (no heirs except a good asian wife of nearly 28 years) and try to enjoy life a bit by trying hard not to sit 10 hours a day surrounded by 4 PCs staring at half a dozen screens. it used to be fun making money, but it isn't anymore once a certain saturation point has been reached.

progress is slow i have to admit. built a home in Thailand (designed by ourselves) last year (duration ~12 months which nearly killed me or i could have well ended in a thai jail for manslaughter and premeditated murder serving at least a life sentence) but somehow i managed. read already two books, planning to read more books and (as mentioned) enjoy life. does that answer your question?

p.s. i live in a suburb of pattaya on a tiny lot of one rai in a gated community. my dream would have been to live up country on fifty rai, living a rural lifestyle, raising all kinds of animals, keeping half a dozen dogs and perhaps growing my own vegetables. alas, the old lady would have hit me with a hard object faster than i could have said "Isaan Province". my favourite thread in TV is "how was your day in Isaan?" i bloody envy those guys! some people have all the luck.

Dr. Nam - you are a success story and semi retiring at 46 is certainly the way forward - life is so short after all.

I know how you felt with the whole 'dreaming about work' problem. But needs must and all that.

As for the murder wrap - my Mrs just finished building our house and whilst its just a 2 bedroom bungalow, the little diamond could quite easily have done bird for GBH.

Isaan? Yeh, the grass is always greener!

[Doza]

I love hearing jealous idiots come on here and criticise people for what they spend per month. Even call them names. Hillarious!

You might not spend 100k per month but one month you need some serious dental done, another you need medical, you buy two tickets home to farangland and spend a couple of weeks there and all of a sudden, 100k as an average is looking tight.

And as someone said. Teachers don't earn 25k. People pretending to be teachers do. Real teachers earn from 80 - 150k ++ (at least). Are they jerks too???

[Desertexile]

Back to the flat renting..

Someone mentioned six flats in Scotland at 100k each. Bad idea. It means six lots of tennants, six lots of maintainance.

Way too much hassle. Cheap flats=rubbish tennants(rule of thumb).

Renting a one/two bedroom flat in London at £550.00 a week will get you a proffesional person/couple, who will not piss you about.

I know, I rent flats in London.

I tell my tennants that they must maintain the flat themselves, and any expendature(?) can be deducted from the rent and invoice to be posted to me. So far this has cost me £172.00. Not bad for 10 years of renting.

Rent to proffesionals, but make sure you get refferances. Extremelly important.

Also, these type of tennants tend to rent for a few years at a time.

That someone was me. I have never mentioned though Scotland.

I have said that one is better of with that kind of money to find undervalued markets, and invest in them, and not in a boom market such as London. That does not equate to become a slumlord. That sort of money buys you in cash one small flat in London, and if you get financing, maybe two or three flats at most. If you want to invest in places such as London or Paris - you better come with several million pounds.

Very risky. One bad tenent, and your whole financial calculations will be off. One crash in the market, and you are gone.

Common sense is to spread your risk, and buy a whole apartment complex. In many European countries what can buy you one small flat for in London, can buy you a midsized apartment block. Management is available and not very expensive. And if you do your homework - you get in excess of 10% returns, plus a solid appreciation. And that is all that counts when you invest in real estate long term - returns and appreciation, and not how fancy the town or country is where you invest.

You may be lucky with your tenents, but things can go the other way. I have had "professional" tenents go bonkers on me, destroying the apartments, not paying rent, and whatever. If you just have one apartment, then you are in trouble. It can take ages to get tenets out via the court system. If you have ten or more apartments, you risk is evenly spread.

That should be common sense.

I rent my house to my brother - best tenant you could hope for, hel_l I'd invest the lot and rent his a beautiful pad if he could afford it. I see where you are coming form regards the one tenant argument and perhaps that would suit a fully retired Gent. Regards spreading the rish with 5 places, that would involve work and headaches but there are definate advantages.

Its finding the balance between a real steady Eddy with bonds, to taking chances with stocks and property somewhere in between where over 20 years, ya cash is ... safe?

[ColPyat]

"Common sense should tell you that the thread starter wants to retire. Not piss about with ten flats, ten tennants etc."

*****

in this respect i'd like to add my two cents (for what they are worth). even totally drunk i'd never consider putting any part of my investments in immobile rental property thus being at the mercy of markets and tenants and complete paralyzed to make a move should the necessity arise. except for the roof over our head, a condo abroad for exclusive personal use once in a while and some building land abroad which does not need to be cared for my alpha and omega was always "never buy anything which you can't sell 30 minutes later (if the markets are open)!"

London and Paris are booming since years, no doubt about that. other european cities (especially in Germany and Italy with its tenant protecting laws) are a bust.

It all a question of expertise.

I would never put my money in stocks. I don't know anything about stocks, i am not interested in learning about stocks, and most of all - i do not want to spend every day in front of the computer to observe the markets. And i have known more than enough amateurs, and a few professionals who have lost all their money in that game by investing badly.

Since i have been born i know about real estate for long term investment (not speculation, that's a completely different game!!!). It's simple, once you made your initial research and due diligence and decided where to invest there is only simple standard work to be done. No need to be particularly talented, intelligent, or ambitious.

If you invested in a stable economy, found your object at a good price, best just after a crash when the market has bottomed out, it only goes up. It does not even matter how much it goes up, because your basic returns stay the same. Market fluctuations don't really affect you that much, and there are no huge and sudden overnight fluctuations anyhow. And if it crashes, then it will go up again.

Just don't listen to the banks, they only steer you to their own affiliated agents who try to get rid of non productive projects to unsuspecting buyers. Do your own research.

The day to day work such as checking on prospective tenent's credentials, upkeep, and finding new tenents a managing company will do. Once a while you get a nasty tenent, but if you have enough projects it's not a desaster.

Given all the other options, it's relatively low risk, and not much work involved. I don't have the ambition to get rich quick, i just want a stable basic income for which i have to do as little work as possible so i can keep myself busy with the far more important things in life, such as living and loafing here in Asia without having the stress of being dependent on the volatile Asian economy. And god forbid - being forced to work regularly, or being even in the hel_l of regular employment.

[Desertexile]

Nova blue - good post mate and good luck to you too. I'd say it's best to hit Thailand with some brain cells, cause sure enough you'll be shedding a few on arrival. Its also a good idea keeping yopur pad back in the USA. If you got to DD.

SOFKevin

I feel that the 670K would maintain a 100K liefstyle, rising each year. For me I can;t really let the capital dwindle. My great aunt lived to 104 and my 99 year old Grandad drank me under the table and Christmas then tried to pull my Mrs...... we tend to live long.

Moonfruit, yep I'm youngish. I left LOS at 28 and am coming up 33 now. I'll hit targets by 38. No kids, just herindoors.

I dont imagine I'll retire then BUT to me freedom is the ability to choose. Living on 35K a month in Thailand, through some eaching gig with nothing else, just isn't freedom. No matter how hard you rub, you can't polish a turd and I've never been one for convincing myself that I'm sorted and free when I'm not.

I may not even touch the intested (starting at 100K) it may all get saved and I'll get a good gig back in Thailand which affords a comfy life. When I left Thailand after 6/7 years I was a teacher.... then I found that making money really is quite enjoyable. That said, if I decide at 38 that I want to kick back, ride my Ducatti and spoke spliffs on the beach all day, I can.

Money ain everything but its certainly takes the sting outta being poor.

Maccaroniman - you and me both Bud - some cats always want to take a dig when you rise above your station. 100k isn't much.

Bmanly - I know guys that have done the same as you and a few that have sold up whilst in Thailand after the tenants and agents were ######ing them around. Good luck to you.

Heng - so this is where you are hiding. How's the ยาดม business going? Have you taken over your soi yet?

Doza - EFL has it's place, for sure but its not any kind of gig to bring up a family. I worked with a fella and his daughter got hit by a car. He played the rich farang card and made out he could pay the medical. 760,000 baht bill and 100,000 savings with a 35k monthly gig. Ouch

Gents, this thread is becoming very informative. I guess a lot of readers and getting some good info here. Nice one.

Edited January 22, 2007 by Desertexile

[ColPyat]

I rent my house to my brother - best tenant you could hope for, hel_l I'd invest the lot and rent his a beautiful pad if he could afford it. I see where you are coming form regards the one tenant argument and perhaps that would suit a fully retired Gent. Regards spreading the rish with 5 places, that would involve work and headaches but there are definate advantages.

Its finding the balance between a real steady Eddy with bonds, to taking chances with stocks and property somewhere in between where over 20 years, ya cash is ... safe?

Having several places is actually less work than just one, because the you can afford to pay for a management company who does all the day to day work for you. I have a distrust to stocks and all that. And you gotta watch them all the time.

Important with rental property is to make your due diligence before you buy. You gotta look at the social and economical situation of the place you intend to invest. How is the market, how was the price development?

Are there many industries, many new investors, and what sort of industry, as that will give you a hint on the employment situation. How is the traffic connectivity, is there an airport. And then you have to have a look at the particular locations and find out about them, how is the social environment, etc.

The ideal project is where your prospective tenent is solid middle middle class - teachers, low and mid ranked civil servants, long term employees of industries. You don't want extreme low, and extreme high, they are both trouble.

Nice is to find a place just after a speculation bubble has burst, many people who lost a lot and need to sell quick. But stay away from auctions after insolvencies, because there you buy into projects with lots of unsolved arguments, and that is for the sharks specialised in that. Often there also the upkeep has suffered pre insolvency. The guys who are in that business usually have their own or affiliated construction companies and inside information and what goes with it from the companies dealing with the insolvencies. A very nasty business with very nasty people in for a quick buck and no compassion.

[Firefan]

The rule of thumb used by most experts is that one can safely pull 3-6% a year+inflation from a well diversified(both geographically and asset-class-wise), low cost portfolio. This could be spread out between stocks(or my preferred; index funds and ETFs), bonds, commodities, real estate(if one does not want the work of directly owned RE - then simply through REITs and similar structures).

3% is very conservative and 6% a bit agressive. Let's pick 5%. So if one wants 100k Baht($2850 at rate 35B/$) then one needs $570k being about half of the Pounds 670k mentioned. Even at the very conservative 3% $950k is enough.

Investing as above does NOT require anyone to sit and stare into multiple PC screens 24/7! In fact; a quick re-balancing check once every 1-3 years is perfectly fine as long as one has set an initial asset allocation one can accept the risk from. Especially the fixed income/bond component size is important here. Not too small to expose overall portfolio to too much volatility(from stocks Etc.) and not too large to start risking overall portfolio does not keep up with inflation. 30-40% of portfolio for such an early retiree would probably be the right range.

Cheers!

[ColPyat]

The rule of thumb used by most experts is that one can safely pull 3-6% a year+inflation from a well diversified(both geographically and asset-class-wise), low cost portfolio.

That's good.

I have a steady 10% return (after costs) on a solid rental project i invested in 16 months ago, plus a 20% appreciation within that year and a bit.

And i didn't have to learn lots of complicated terms.

Edited January 22, 2007 by ColPyat

[Firefan]

Colpyat; if you re-read my post you will see that I did not leave out the option of also having directly owned RE. I do. But it IS a bit more work, especially if not located in the same country as the RE. Stocks and REITs already did about 20% in the period you mention. They can drop in price again yes, but so can your RE. Cheers!

[ColPyat]

Colpyat; if you re-read my post you will see that I did not leave out the option of also having directly owned RE. I do. But it IS a bit more work, especially if not located in the same country as the RE. Stocks and REITs already did about 20% in the period you mention. They can drop in price again yes, but so can your RE. Cheers!

True, real estate is a bit more work than low risk stocks, but higher returns.

Real estate can go down, but in stable western economies it's a bit more predictable than stocks that give you equal returns (and demand far more attention).

And, for lazy people like me, it's not exactly rocket science, but stocks are. If i bought at an initially low price chances are that it won't fall below, and i still get my rent. I don't understand the mechanics of stock markets, and i really don't want to learn them.

And, it's a moral issue for me as well. I don't want my money in some funds, or companies where i don't know how they make their money. They could be investing in weapons companies and such, and that is something i do not want my money to be in, regardless how much profit it makes.

But that is just me.

[Briggsy]

Col - I think that Firefan makes some very valid points about stocks. But I respect the fact that you don't wish to invest in them. I think they are a valuable part of an investment portfolio. They consistently outperform building society a/c's. And you do not need to constantly monitor them. Buying and selling stocks every day is often a mug's game. You need to think longterm and you should have diversification though. Large chunks of your wealth with only one company or one industry is high risk. I have a large percentage of my assets invested in shares/unit trusts and I feel happy with this.

Firefan - Your rough calculation using inflation + 5% over the long-term as an investment return sounds too good to be true. I would tend to be more conservative. Maybe that's my personality. If you could guarantee this, I think you would be the next Warren Buffet