Becoming a frugal expat and budget conscious

[theguyfromanotherforum]

7 hours ago, wolf81 said:

 

 

Personally I think I could live here fine with my GF and daughter in the countryside of Thailand if I'd have around 300.000 EUR in investments (no housing and car loans, no rent costs, etc…). That should average at least around 45.000 Baht per month (assuming a 5% average profit). Of course I mainly eat Thai food and both me and my GF are not party people. 

 

If you're single and you got double the amount, you should be more than fine, right? Unless you like to spend much time in the bars and with bargirl perhaps, then you might get short on money, maybe.

 

Excuse me, but investing money and putting it in the market when you are retired is a complete lunacy. You know, just like the occasional real estate crashes, markets can also go down substantially and as in case with 2001 and 2008 many companies may disappear and never recover. 

 

When you are retired you should be taking your money out and putting it in "safe" and protected guaranteed investments like term deposits which give you lower yields. Also, investment income is taxed.

[wolf81]

1 hour ago, theguyfromanotherforum said:

 

Excuse me, but investing money and putting it in the market when you are retired is a complete lunacy. You know, just like the occasional real estate crashes, markets can also go down substantially and as in case with 2001 and 2008 many companies may disappear and never recover. 

 

When you are retired you should be taking your money out and putting it in "safe" and protected guaranteed investments like term deposits which give you lower yields. Also, investment income is taxed.

Safe bonds are a perfectly fine choice for retirement. But ideally you have a mix, perhaps with some property income as well. 

Edited September 7, 2018 by wolf81

[chicowoodduck]

15 hours ago, Guderian said:

If you want to live on the Baht bus routes because you can’t ride a motorbike you’ll find that accommodation is (much) more expensive than if you move away from them. Many older people are scared of riding motorbikes, but the smarter ones do something about it. You can get numerous modified motorbikes with three wheels in Pattaya if you’re worried about balance. Some have a very wide pair of wheels at the front or back, like one of those down-market Harley hogs you see, if you really feel unstable. Others have a narrower separation if you’re just feeling a little bit nervous. If you’re really pushed for money then you can buy a Thai-style samlor, like the street vendors use. Get a second-hand scooter like a Honda Click, maybe 20K or 30K Baht, and for around 10K-15K Baht you can have a sidecar made to your own specifications and attached to it. Quite a few disabled people in Pattaya get around in one of these, the sidecar is made to fit their wheelchair and they have a ramp at the back that lowers down for easy access. The other great advantage of the samlor is that you can have a nice, big sunshade fitted for around 2K Baht, no point in getting toasted in the sun if you don’t have to. Heck, you can even have a music system and cooling fan installed if you want, your imagination’s the limit. If those options don’t suit you then there are numerous small battery and petrol operated three wheel vehicles on sale, like mobility scooters for example, that will enable you to live in the cheaper areas and still get around where you want. Rent is probably the biggest single expenditure for most people here, so minimizing it while still having a nice place is important. Getting yourself fully mobile is one way to cut your costs in the long run.

 

Anyone that suggest you get a motorbike is off their rocker.....quick way to an unhappy ending at best.....lol....?????

[OneMoreFarang]

2 hours ago, chicowoodduck said:

Anyone that suggest you get a motorbike is off their rocker.....quick way to an unhappy ending at best.....lol....?????

Just think of a motorcycle like a bicycle with engine. And it's safer than a bicycle because you can ride with the same speed as the traffic.

A small motorcycle makes everyday life so much easier. I ride all the time to the fresh market, supermarket, street food, etc. Most of the time these are trips of less than 3km (one way, in Bangkok). It's nice to be able to drive to your favorite noodle shop and if they don't work that day just drive a km more to another shop you like. And on the way back pick something up in the (super)market.

Trips like that would be almost impossible with a car because of traffic and parking. And if you would ride on a motorcycle taxi most people wouldn't want to pay 40B for the motorcycle taxi and 50B for the noodle soup 2km away and then the way back.

If you have a small bike and drive it carefully it costs very little and makes life so much easier.

[marko kok prong]

Of course you could go gold prospecting in New Guinea,hard yakka,and damned dangerous,but rewarding,we found on one expedition in an extremely remote area full of crazed cannibals a nugget the same size and shape as Kim Kardashian's butt ,however due to the oddity of my two partners ,Carruthers and Snodbury [English public school types],and the travails which followed,the details of which i will not bore the op or other posters with as i have extensivley documented them in other threads,i am no longer undertaking any more expeditions,anyway just a thought.

[SheungWan]

6 hours ago, OneMoreFarang said:

Just think of a motorcycle like a bicycle with engine. And it's safer than a bicycle because you can ride with the same speed as the traffic.

A small motorcycle makes everyday life so much easier. I ride all the time to the fresh market, supermarket, street food, etc. Most of the time these are trips of less than 3km (one way, in Bangkok). It's nice to be able to drive to your favorite noodle shop and if they don't work that day just drive a km more to another shop you like. And on the way back pick something up in the (super)market.

Trips like that would be almost impossible with a car because of traffic and parking. And if you would ride on a motorcycle taxi most people wouldn't want to pay 40B for the motorcycle taxi and 50B for the noodle soup 2km away and then the way back.

If you have a small bike and drive it carefully it costs very little and makes life so much easier.

Until you hit something or something hits you.

[OneMoreFarang]

Just now, SheungWan said:

6 hours ago, OneMoreFarang said:

Just think of a motorcycle like a bicycle with engine. And it's safer than a bicycle because you can ride with the same speed as the traffic.

A small motorcycle makes everyday life so much easier. I ride all the time to the fresh market, supermarket, street food, etc. Most of the time these are trips of less than 3km (one way, in Bangkok). It's nice to be able to drive to your favorite noodle shop and if they don't work that day just drive a km more to another shop you like. And on the way back pick something up in the (super)market.

Trips like that would be almost impossible with a car because of traffic and parking. And if you would ride on a motorcycle taxi most people wouldn't want to pay 40B for the motorcycle taxi and 50B for the noodle soup 2km away and then the way back.

If you have a small bike and drive it carefully it costs very little and makes life so much easier.

Until you hit something or something hits you.

And how exactly can you prevent that something hits you? Accidents happen, with and without motorcycles. There is always some risk.

 

[SheungWan]

16 hours ago, CharlieH said:

Why not sell the property then take 50% and buy another in Oz somewhere and rent that out.

Use the other half to establish yourself better in Thailand then you havnt burnt your bridges and can return if you need/want to.

With 10mil you can set yourself up nicely if your careful and you'll have an income from the rental and can forget the super til later.

 

Just a thought. Worked for me.

I have discussed the downsizing option with a number of guys, but other than the ones who had already managed to work it out for themselves and done the business, the one's remaining just won't go there. The reluctance is as stubborn as the guys who refuse to get a smartphone.

[SheungWan]

11 minutes ago, OneMoreFarang said:

And how exactly can you prevent that something hits you? Accidents happen, with and without motorcycles. There is always some risk.

I would like to tell you that you are talking rubbish but you are talking to someone who one time fell down a drainage hole in the pavement.

[Lacessit]

14 hours ago, theguyfromanotherforum said:

 

Excuse me, but investing money and putting it in the market when you are retired is a complete lunacy. You know, just like the occasional real estate crashes, markets can also go down substantially and as in case with 2001 and 2008 many companies may disappear and never recover. 

 

When you are retired you should be taking your money out and putting it in "safe" and protected guaranteed investments like term deposits which give you lower yields. Also, investment income is taxed.

I disagree. In Australia, it's a matter of spreading risk across a number of investment classes. If one is going to rely on income from term deposits in Australia, they won't even keep up with the rate of inflation in many years.

The big banks in Australia pay about 2% on shorter term deposits, a bit more if you are willing to tie up capital for 2 - 3 years.

If you own bank shares, you will get about 5.5% yield in dividends, plus another 2% from the taxman thanks to our franking credit system. If the share price goes down, the yield goes up. Plus one can also increase yield by selling covered call options on the shares they own. Big banks in Australia are never going to disappear off the share register. In the words of our regulators, they are too big to fail.

I'm reminded of a comment by Willie Sutton, an American bank robber. He was asked why he robbed banks. He replied " Because that's where the money is".

There are other options, such as peer-to-peer lending at various risk levels. My aim is to generate 5% return pa average on my capital.

Taxation? I have about 1 million baht a year in income, and I pay zero tax.

Excuse me for thinking a Canadian offering investment and tax advice to an OP who is Australian is more than somewhat daft.

 

[theguyfromanotherforum]

5 minutes ago, Lacessit said:

If you own bank shares, you will get about 5.5% yield in dividends, plus another 2% from the taxman thanks to our franking credit system. If the share price goes down, the yield goes up.

 

 

 

Thanks for the lolz.

 

Banks are known to cut dividend often to zero. See 2008

 

Speaking of daft.....

[Lacessit]

33 minutes ago, theguyfromanotherforum said:

 

Thanks for the lolz.

 

Banks are known to cut dividend often to zero. See 2008

 

Speaking of daft.....

I've been to Canada once. I do know Canada has more fresh water than anywhere else in the world, and the Yanks are very busy trying to filch your oil reserves. I don't pretend to know anything about Canadian banking or investment.

FYI, Australian banks cut dividends in 2009 by 30-40%. It's back to business as usual. Short sellers have never attempted to take on the banks, because they know they will get bruised badly.

Have you ever been to Australia? What on earth makes you think you are somehow qualified to post investment and taxation advice about a country you obviously know nothing about?

When you've dug yourself into a hole, it's best to stop digging.

[Lacessit]

21 hours ago, georgegeorgia said:

You might not understand Sydney Real estate..my house is worth in the $850,000 to 900,000 ...and going down in price unfortanetely..thats very cheap in Sydney...my superanuaion i cannot access until im 60.approx 150k at this stage....

 

To move to Pattaya i would have to sell up and live off the sale.

 

No its not a gee up, sounds a lot of money but im not going to risk it by selling up everything  yet.and nowadays its not a lot to live off in Thailand.

 

Sorry it just occurred to me you thought i had a milion dollars too...no just the house and superanustion...so im asset rich cash poor i guess.

 

 

 

Stop worrying. Fear does tend to paralyze us.

Like you, I had a house in Australia. I used to come back every six months, spend a month catching up on maintenance, and pay ever-escalating rates to the local council.

When I sold my house, it was liberating. I also had productive capital.

You can  rent the house, with all the worries of an absentee landlord. Let's say you clear $800,000 from the house sale. While you are waiting for your superannuation, if you can't generate a 5% return - $40,000 a year - you haven't been educating yourself financially. You'll pay about $4000 in tax, assuming you don't buy any shares for franking credits. My tax bill is zero.

You do have to be careful to maintain residency in Australia somehow, because otherwise the ATO slugs you 32.5 cents on every dollar.

While I don't know your personal tastes, I can live here very comfortably on $30,000 a year. A week's rent in Sydney or Melbourne is the same as a month's rent in Chiang Mai.

 

 

[theguyfromanotherforum]

40 minutes ago, Lacessit said:

I've been to Canada once. I do know Canada has more fresh water than anywhere else in the world, and the Yanks are very busy trying to filch your oil reserves. I don't pretend to know anything about Canadian banking or investment.

FYI, Australian banks cut dividends in 2009 by 30-40%. It's back to business as usual. Short sellers have never attempted to take on the banks, because they know they will get bruised badly.

Have you ever been to Australia? What on earth makes you think you are somehow qualified to post investment and taxation advice about a country you obviously know nothing about?

When you've dug yourself into a hole, it's best to stop digging.

 

I was married to Australian. She lived in Camden.

 

For the record, I liked Australia much better than Canada. However this topic is about some old guy investing his life savings in equities. Markets do tank and sometimes take really long time to recover. Yes, banks will always survive and will be bailed out, but certainly the peasant shareholder won't come out on top. If he has enough money to retire in Thailand than the difference between 3% in safe term deposit vs 6-7% in equities really doesn't make sense to me IN OLD AGE.

 

 

Edited September 8, 2018 by theguyfromanotherforum

[Lacessit]

11 hours ago, theguyfromanotherforum said:

 

I was married to Australian. She lived in Camden.

 

For the record, I liked Australia much better than Canada. However this topic is about some old guy investing his life savings in equities. Markets do tank and sometimes take really long time to recover. Yes, banks will always survive and will be bailed out, but certainly the peasant shareholder won't come out on top. If he has enough money to retire in Thailand than the difference between 3% in safe term deposit vs 6-7% in equities really doesn't make sense to me IN OLD AGE.

 

 

We'll have to agree to disagree on this one. At age 75, I've been holding about $100,000 ( AUD ) in bank shares for 15 years. I refused to panic during the GFC. At worst in 2009, I was still getting 5% return when they cut their dividends to conserve capital.

Obviously the entry point in terms of share price is important. Right now, IMHO they are  undervalued due to the Royal Commission.

I'm not saying all a retiree's money should be in equities - a mix of risk levels depending on one's level of comfort is what's required.

You won't get 3% on term deposit in Australia. You will have to lock up your money for 3 years to get 2.6%. Shorter periods are 2%.

The crux of the argument is there is not much point to having everything in safe term deposit if it is not generating enough income to prevent erosion of the capital base, by inflation and drawdown. That's a downward spiral. Unless you have so much capital the rate of return becomes irrelevant.

For the record, I thought Canada had some of the most gob-smacking scenery I've ever seen. Although I can appreciate living in a country where many areas are under snow for six months of the year could get tedious. I was mostly in Calgary and Vancouver.

[Farangwithaplan]

On 9/7/2018 at 9:55 PM, pr9spk said:

My wife hates me spending money at the market here because she knows I will probably pay too much, 10 baht here and there extra is a lot for her. So she buys all my clothes and food. They're not all money grabbers.

I shudder when I hear non thais talk about money grabbing women, It makes me wonder where they found them. It is great you have found a good woman. I'm sure you will have a terrific life ?

 

[georgegeorgia]

19 hours ago, Lacessit said:

Stop worrying. Fear does tend to paralyze us.

Like you, I had a house in Australia. I used to come back every six months, spend a month catching up on maintenance, and pay ever-escalating rates to the local council.

When I sold my house, it was liberating. I also had productive capital.

You can  rent the house, with all the worries of an absentee landlord. Let's say you clear $800,000 from the house sale. While you are waiting for your superannuation, if you can't generate a 5% return - $40,000 a year - you haven't been educating yourself financially. You'll pay about $4000 in tax, assuming you don't buy any shares for franking credits. My tax bill is zero.

You do have to be careful to maintain residency in Australia somehow, because otherwise the ATO slugs you 32.5 cents on every dollar.

While I don't know your personal tastes, I can live here very comfortably on $30,000 a year. A week's rent in Sydney or Melbourne is the same as a month's rent in Chiang Mai.

 

 

If you can get 5 per cent i would love to know how,my CBA bank shares right down, my Fortesque metal shares down , investing now in the ASX is risky

[55Jay]

I was nervous about money when we moved here.  Created an Excel spreadsheet and sat with my mate, who'd retired here 5 years before, and he gave me ball park figures on the things they spend money on each month.  Then I tracked our actual expenses for a month.  Seeing it all laid out in black and white was good perspective and allowed me to calm down about the money issue.  We were going to be just fine. 

 

So now, we (no kids past or present), live in a modest, comfortable house in an older moo baan.  Couple cars, motorbike, everything paid for so, and we live quite well on about $2,500 US Dollars/month.   More available but prefer to live slightly below my means and maintain financial discipline. 

 

When it all starts to feel a bit stodgy, we spend more on travel down to Pattaya, BKK, etc., and then a trip abroad every year or every other year.  I call the latter "sanity check" trips.  It's good - I would say necessary for me -  to get the hell out of Thailand once in a while.

 

[AtoZ]

If I would be in this situation I would 

 

1. sell the house ASAP - the market in Sydney is cooling off, and the downside is much higher than the upside (banks increasing interest rates even before RBA, potential Chinese economy issues etc)

 

2. place the funds in fairly liquid safe vehicles (term deposit, bonds), and slowly DCA over years the funds into Aussie and Thai dividend paying shares (possibly include US ETF)

 

probably also hunt for a well priced (second hand, not the sardine coffins) condo in Thailand which would lover monthly expenses greatly and allow a lot of breathing space in case of another global crisis

[rickudon]

Setting a budget is fine, but the FIRST issue if retiring to Thailand is what are you going to do with your time? Pattaya may be fun for a holiday, but do you see yourself living there for 15, 20 years? To many propping up bars and destroying their liver as nothing else to do. So consider what your interests are, and where would be the best place to pursue them.

 

SECOND, having decided on what you will do, go and stay in those areas which meet your criteria and see if they click with you. And different areas will have different issues, rent can vary a lot, and if buying property remember selling in Thailand can be very difficult. So try to get it right first time.

 

THIRD, domestic arrangements, Are you going to rent companionship or try to find a long term partner? Renting is safer but a good companion can be more satisfying in the long run, but can be more problematic - and also usually more expensive! Also if out of big urban areas a car is better (and safer).

 

Now do some budgets.

[SheungWan]

On 9/9/2018 at 2:23 AM, Lacessit said:

We'll have to agree to disagree on this one. At age 75, I've been holding about $100,000 ( AUD ) in bank shares for 15 years. I refused to panic during the GFC. At worst in 2009, I was still getting 5% return when they cut their dividends to conserve capital.

Obviously the entry point in terms of share price is important. Right now, IMHO they are  undervalued due to the Royal Commission.

I'm not saying all a retiree's money should be in equities - a mix of risk levels depending on one's level of comfort is what's required.

You won't get 3% on term deposit in Australia. You will have to lock up your money for 3 years to get 2.6%. Shorter periods are 2%.

The crux of the argument is there is not much point to having everything in safe term deposit if it is not generating enough income to prevent erosion of the capital base, by inflation and drawdown. That's a downward spiral. Unless you have so much capital the rate of return becomes irrelevant.

For the record, I thought Canada had some of the most gob-smacking scenery I've ever seen. Although I can appreciate living in a country where many areas are under snow for six months of the year could get tedious. I was mostly in Calgary and Vancouver.

Re: "The crux of the argument is there is not much point to having everything in safe term deposit if it is not generating enough income to prevent erosion of the capital base, by inflation and drawdown. "

Actually that is not a good argument IMHO. It is not a good argument to take additional risk (which may not be justified) to cover erosion of capital base. The argument may be to not liquidate the income generating property in the first place as the alternatives of low income from safe investments or higher income from higher risk investments are poorer options. The conclusion may be to delay getting rid of the property while one still has the health and ability to manage it. The whole issue of what to do to manage an expat existence can be argued round the houses. Sometimes the best thing to do is just make a move and review the situation on an annual basis as to whether one's spending and net income requires readjustment.

 

[Dick Crank]

It's really hard to not participate when there are so many around you partying.

I'm really frugal minded and have lived in various locations in Thailand and abroad.
Patts was the only place where I spent money like a fish and could not seem to budget.

There's just not a lot to do other then spend, and the town is geared around getting you to do that.

[wolf81]

1 hour ago, Dick Crank said:

It's really hard to not participate when there are so many around you partying.

I'm really frugal minded and have lived in various locations in Thailand and abroad.
Patts was the only place where I spent money like a fish and could not seem to budget.

There's just not a lot to do other then spend, and the town is geared around getting you to do that.

I think it's very much related to you as a person. When I lived in Pattaya (Na Jomtien) I didn't spend too much. But I personally don't enjoy bars and discos and perhaps those are the biggest money sinks. The only things I value a lot is the occasional massage and having a swimming pool near my apartment and both are not too expensive. With my GF we did went out for dinner every night and that was also really affordable, I am thinking for dinner (2 of us + some drink) would be between 600 - 800 Baht a day. And for breakfast my GF would get some food from the local market and cook some nice Thai dish. We also lived well enough in a 15.000 Baht / month apartment. 

Edited September 11, 2018 by wolf81

[georgegeorgia]

You can cut out some expense by eating at home.

For e.g. beautiful cooked whole fish at the  markets 80..

 

But the poster about what to do with your time is right, I see expats all day sitting in bars ...but then again maybe they want to meet up with mates etc