The Cost Of Living In Thailand

[howard251]

I just read this news story on the Internet and it touched on the question I was asking myself. Is this story the truth or have others found a way to live cheaper?

I have been visiting Thailand for 12 years now and pretty much fell in love with Chiang Mai. I already bought a new house there (paid cash), Just finished furnishing all the rooms including curtains. I will buy a new Honda City car, paying cash. I don't drink or smoke and try to watch where I spend my money. I had the belief that I could easily live on 25,000 baht a month, no kids and no family to support. I calculated my monthly bills to include UBC, electricity, food, medical insurance and gas for the car. After reading the story below I was a little nervous

Living for the moment <-- news story link

(THE STORY)

Somebody emailed me from the States recently. He'd read a couple of my articles about Bangkok. He'd been here before, liked Thailand, was in his early 50s and had something like 8 million baht in the bank.

How long would it last, he asked, if he lived carefully? He told me he was divorced, free of emotional entanglement, debt-free and looking for somewhere where he could live a happy life.

I admired his courage. I knew what he was thinking: "I've got 8 million baht in the bank; I'm over 50; life is passing me by; I'm unhappy where I am; I'm going to go to Thailand where life is cheap and fun; and I'm going to make every moment count".

I hated to spoil his dream, but a dream is all it is, I'm afraid, unless you are a very courageous person. Hard and unpleasant reality makes itself felt only too quickly and sharply when you examine his dream a little more closely.

Here's the first piece of gloom: To live happily here, you need to be free of anxiety, worry and stress. After two years, I told him, you will find that your capital sum, despite interest, is diminishing alarmingly fast. Then you will start to worry. Can you be happy if you worry every day?

Of course you will still have a decent sum in the bank, I told him. But you will also have realized that it's not going to last for ever, and sometime in your mid-60s you are going to find yourself in Thailand without enough income to live on. What are you going to do?

I did some mathematics for him. Eight million baht seems a lot of money, but with deposit rates low both here in Thailand and the States, the income it would bring in is insufficient to fund the lifestyle he wants, modest though that is.

I told him something else. Although it's true that he could live here and cover all his costs for 45,000 baht per month, including all necessary insurances, there were other factors he had to think about: The higher and higher cost of health insurance as you get older; the fact that capital goes down in real value as time goes by, which means you have to plough back some of the interest you make to support the value of the capital; emergency trips back home - one never knows!

In fact, I told him, 80,000 baht is a more realistic figure for necessary monthly income. Of course, he wouldn't spend all this but he'd need to reinvest what he didn't spend. He emailed back, he knew all this and had thought about it. He'd decided to invest the money as best he could and when it ran out he'd go back to the States and 'he'd find something'.

And he still wanted to know, how long would the money last, the 8 million? He'd take his chances about dealing with anxiety and stress. He said he wanted to live for the moment - have a good and happy time. He thought he had the inner mental resources to enjoy himself and not fall victim to self-pity when the money ran out just accept his penury as a fact of life and go home to the States and 'remember the happy times'.

I think he's wrong, completely wrong. But it's his life. But there are people who can live for the moment, enjoy their lives each day without worry for the future, and when disaster finally comes and the money is gone, accept their lot with courage.

I did the mathematics for him. Prices go up each year wherever you are. 50,000 baht a month is an amount you can live on here now. Ten years from now you'll need 100,000 baht.

All in all, I told him , taking inflation and emergencies, and insurance cover and all measurable factors into account, I didn't see his 8 million baht lasting much more than 10 years.

He might be lucky. Interest rates might go up. He might find a job. He might have a some luck. It might be 15 years, who knows?

I told him he would be better off living by the seaside, say in Pattaya. It's cheaper there. That is to say it's cheaper there now. But Phuket used to be cheap. Who's to say Pattaya will always stay cheap?

He thanked me and said he was planning the move. I admire him. He's going to have his fun now, while he can, spend his money, and face the uncertainties of the future with courage.

But I worry for him. I've seen too many people here spend all their money, or most of it, and then live a life of paralyzing anxiety and stress, with all happiness gone, and daily life a bottomless pit of agonizing depression. What's the point in that?

And too many of those people took dramatic measures to get out of the anxiety. Some are dead - suicide - and some are in homes for alcoholics. Some are in mental asylums. One told me that when he reached 70, he was going to kill himself. He kept his word. He hanged himself on his 70th birthday. Did this take courage? Yes, it did. But did he think about the horror it caused to the person who found his body?

I wish my correspondent good luck. I hope he has his happy 10 years here, with no worry for the future. But I can't help but think it is not going to be the carefree time he thinks it's going to be.

Bob Wilde is a freelance writer, teacher, translator, proofreader and report editor who has been living in and associated with Thailand for some 27 years. He welcomes comments on his articles and all aspects of living in the Kingdom.

[ProThaiExpat]

Living too long (outliving ones capital) is one of the concerns in retirement planning.

The only justification for an annuity is that it pays out regardless on how long you live.

If one does not have an inflation adjusted pension, social security or the like, then you definitely should look to living too long.

I don't agree with the conventional wisdom that you need to have 75% of your pre-retirement income in retirement to be well funded.

My expense in Chiang Mai has settled down to about 30k a month as car and house are paid for and I am able to save half of my pension. There will be a day, perhaps ten years from now when I will not be able to save half my pension, but it is inflation adjusted so only if my home country's inflation rate is less than Thailand will I have a concern.

A partner of mine years ago asked my how I was planning my retirement and I said I would just take all the money I had upon retirement and pro-rate it to my 90th year and spend all the pro-rata each year, keeping in mind that after 85, it was unlikely that I would do much more than try to get from the easy chair to the toilet to the bed and the fridge when I was older than 85.

I could live on 25k a month in CMX if I lived alone however, there would be "entertainment" expense which I don't have now.

I would think returning to a western country to live when money got tight here would not be an option as living expenses there are so much higher, of course there is welfare.

I have no health insurance, too old and too expensive, but I have a bundle in the bank avaiailable to cover by-pass surgery and the like so I don't pay the 12k per month for health insurance. Worse case scernario, if my and my forbearers life long health experience doesn't pan out for me and I become chronically ill and require substantial medical expense above what I have planned, I would probably head home for the free medical care available there for me. Don't expect that, however, and choosing the time of ones death yourself is a blessing I firmly believe in.

howard251: Your profile seems to match mine and I am just three years ahead of you here in CMX so PM me if you want any further info particularily about health insurance, "entertainment" expense or housemate expenses.

[Tornado]

I would say that it would be quite easy to live on 25,000 baht per month in Chiang Mai, you own your house and car. Im not sure of your age, but guessing around 50 years old, 8 mil for lets say 30 years, if any "bonus" years are given to you sell the house and the car and rent..........

I have lived in Southern Thailand for about 6 years and some days only spend 200 baht if that (with ciggarettes), very easy if you live the "Thai life" and go out once a week for your entertainment (whatever that may be). I am sure with those types of figures you wouldnt even spend 15,000 baht.

Only two things could wreck your plan and that would be marriage or you decide to start drinking through sheer boredom

[ghengis]

How much per month do you need to live in Thailand?

The answer seems to be about 40,000/month for a reasonable lifestyle, assuming you own your own condo and car. Some people can live on less, maybe as little as 20,000, but they live ascetic lives. Most people don't need to spend more than 60,000 a month for a good lifestyle, unless they are sending children to private schools etc.

In the UK the best Annuity Rates are as follows:

• 55 - 6% (3.8% Index Linked)
  
• 60 - 6.6% (4.4 % Index Linked)
  
• 65 - 7.4% (5.3 % Index Linked)
  

So if a person aged 60 invested the sterling equivalent of 8,000,000 Baht in a UK Annuity he/she would get a monthly income of 44,000 or 29,000 index linked. Bearing in mind that in the UK you would also get a state pension at 65 you might consider the non-index linked option and allow for the state pension to give you an income boost later in life.

So in theory 8,000,000 may be enough (after you have paid for your condo/car etc) aged 60. Personally, I think 11,000,000 aged 60 is the right sort of number allowing for unknown contingencies and inflation.

Investing your funds outside Thailand means that you have exchange rate risk - if the Baht appreciates against your investment currency. However getting 1% return in Thailand is not so hot either. Putting all your money in Baht also has risks, since the Baht may crash again in the future, especially if irresponsible bank lending goes unchecked and the Thai economy goes into meltdown.

[KevinN]

I do not know how he bought a house,maybe condo, and he said that he had figured in everything, I don't know what ins. costs as I am to old to get it anyway. but ain't real crazy about doctors,never went to the doctors over 10 times in my life over being sick.and also believe it should be my choice when I get the ticket punched.

I can see no reason why the fella can not live on 25K a month,I would be able to do it and did before I got married and I had to pay rent out by San Sai and transport to CMX most days.and 20 baht everyday at AA meetings.

Now I got a wife,coarse she got a steady job and 4 yrs.til retirement. A kid goin to school,a house to support and a car and a M/C. so now we up to maybe 40K some months and 20K some months but always 5K for electric bill.

Go for it DUDE,you only live once and if ya can't make it,go to the american embassy and maybe they will give ya a ticket,lord knows they charge the rest of us enough for services to be able to front a ticket.

[Johpa]

Just what are you city folks doing to need 25 or 30k baat per month or more to live on even after you have bought a residence and vehicle?!? Still going out to the bars every night and buying lady drinks? Still eating three meals a day at restaurants instead of shopping at the local food market? Oops, I forgot, there are no food markets or even any noodle stalls in those new style "modern" housing projects where Isaan maids sit morosely on the steps with nowhere to congregate for basic social activities like gossiping.

Pardon the naivete of this Chiang Mai Hillbilly, but just what all do you folks spend upon with your 30k monthly needs after you have paid for your home and car with cash up front?

[Nam Kao]

I can live like a king on 20,000bt / mo upcountry

Most familes live on 3-5000 in my neck of the delta

[ProThaiExpat]

Happy to re-examine my 30k estimate per month, I am CMX too but not a hillbilly.

Electric - Now 5500 down to 1800 in winter

Gasoline 2000

UBC, cellphones 5000

Lunch at foodcourt 110x10 --1100

Water 110

Tennis 140x12= 1500

Insurance for car 2000

Carrefour for groceries, cleaning products, etc 4000

Home repair and remodel 4,000

Vacations abroad, trips to Pattaya etc ???????

I will stick to my 30k estimate per month

[Tornado]

How much per month do you need to live in Thailand?

The answer seems to be about 40,000/month for a reasonable lifestyle, assuming you own your own condo and car. Some people can live on less, maybe as little as 20,000, but they live ascetic lives. Most people don't need to spend more than 60,000 a month for a good lifestyle, unless they are sending children to private schools etc.

In the UK the best Annuity Rates are as follows:

• 55 - 6% (3.8% Index Linked)
  
• 60 - 6.6% (4.4 % Index Linked)
  
• 65 - 7.4% (5.3 % Index Linked)
  

So if a person aged 60 invested the sterling equivalent of 8,000,000 Baht in a UK Annuity he/she would get a monthly income of 44,000 or 29,000 index linked. Bearing in mind that in the UK you would also get a state pension at 65 you might consider the non-index linked option and allow for the state pension to give you an income boost later in life.

So in theory 8,000,000 may be enough (after you have paid for your condo/car etc) aged 60. Personally, I think 11,000,000 aged 60 is the right sort of number allowing for unknown contingencies and inflation.

Investing your funds outside Thailand means that you have exchange rate risk - if the Baht appreciates against your investment currency. However getting 1% return in Thailand is not so hot either. Putting all your money in Baht also has risks, since the Baht may crash again in the future, especially if irresponsible bank lending goes unchecked and the Thai economy goes into meltdown.

I am unsure if you live in Thailand?

40,000 baht per month for a "reasonable lifestyle"?

I happen to have a few $, I also have a house, car, boat, motorbike, wife and lots of electricity useage.............. I live very easy on 20,000 baht per month and I do not scrimp on anything. I also do not have a fixed budget, I actually could spend 100,000 baht per month and never be broke!

I shop at the local market and spend about 300 baht per week on food and eat like a king. I go out to a restaurant at least 2 times per week and go out for a few beers with friends at least once per week.

40,000 baht per month? In Australia that is an average monthly salary after taxes, but that salary also is used for monthly house repayments, school for the kids, taking care of the kids and all of the other costs associated with living in a western country....

To the thread starter: dont listen to these caviar eating looneys, 8 mil is plenty!

[exp9696]

8 mil. plenty ,if you keep your brain in your head ( not between your legs )

Food is verry cheap ,en a normal lifestyle

Afther 10 years in LOS , you can guess what is expencive

[RamdomChances]

"up country" 20,000 is plenty, and thats living good (I dont spend this). In the cities, tourist areas, i would of said more like 30,000 to 40,000 depending on your sleeping and drinking arrangments, and which of your brains you use!!

[Thaiquila]

I think there is such a thing as too little money to retire on in Thailand, and it seems 8 million is cutting it pretty close to the bone.

The goal of course is to live a decent life and not run out of money before the last wai in the sky.

With a small amount like 8 million, there is a dangerously low cushion against health emergencies, inflation, exchange rate risk, etc., etc.

However, it is also not in the realm of possibility that it could work for a very thrifty, careful, and healthy person. Just a greater risk of being washed out ...

Also, if the person is quite unhealthy and has a shorter life expectancy, the money might last that way too.

Another factor, if the person has a future pension coming due at a later age, such as US social security, that could be very important.

Another factor, there is a lot to be said in continuing to invest part of retirement capital in potential growth areas, such as stock markets, which are historically better than fixed investments over time, to fight inflation risk.

And remember, people go broke and outlive their nest eggs in western countries too! And in some ways the risks of doing so can be greater in western cpuntries due to the high cost structure.

[moziman]

Just a few money saving ideas if you want to live here in the LOS.

Check your electric rates and usage, good thread on this already, try and get Gov rates. (Gas cookers/ovens work out very cheap)

Mobile phones, look for monthly payment deals, the cards are expensive.

Avoid gas guzzling cars and cars that have expensive replacement parts or repair bills.

Check out buying a big sat dish where you don't pay the UBC rentals. Pays for itself very quickly another good thread on this one.

Make your own food in bulk and freeze it if you can't eat Thai. (Filing up a freezer saves leccy. )

Veg, fruit and meat is much cheaper from open markets.

Drink cheaper beer, Leo is drinkable and very reasonable. Thai whiskey even better, all gets you drunk.

Fans over aircon is an obvious one but direct the fan directly at you and let your body cooling system do the work.

Not for every one but drinking at home with friends is cheap and can be fun.

Fishing is cheap entertainment.

Computer games is cheap entertainment.

Cards, board games, golf, books, gardening, DIY etc etc

A lot of restaurants and entertainment places allow you to bring your own booze, just pay ice and mixers.

You don't have to live like a bum to save money and it can be surprising how little effect on your quality of life is by making a few adjustments here and there to your living standards, the money savings can be huge over time.

With out a doubt the biggest expense over time is bars and bar girls, money literally evaporates in front of your eyes, super bad combo of drink and flirty women, only solution I can think of is to set a budget and leave the ATM card at home. (or abstain)

I am sure there are many more but the trick is applying them and sometimes shelling out now to save in the long run.

I think the biggest deception in Thailand is that it is super cheap to live here, it is if you live Thai, if you want to live Farang it is not especially when you have so much free time on your hands.

moziman

[possom]

moziman has hit the nail on the head . if you live a thai lifestyle or a farang lifestyle is the question . some people cant live without farang food and housing etc.. for those of us who live a thai lifestyle ,life is very cheap !! i am not knocking people with different lifestyles, just pointing out that life in thailand can be very cheap. pesonally i rarely spend over 20,000 a month , and i enjoy a few days away each month with that . however this is an endless question , we are all different

[ghengis]

I don't live in Thailand, but I am considering it as a place to retire. I have seen a couple of polls on the cost of living in Thailand and Stickman has written about this on his website.

40,000b/month seems to a consensus figure of what people actually spend, with 20,000 being a lowest people claim to live on and very few people paying more than 60,000 per month unless they are on some fat expat deal where the company pays for everything.

Maybe it is possible to live on 30,000/month, but if you factor in health insurance, trips back home, buying a new car every few years I am sure this would bump up the figures.

If I retire in Thailand at 58, I could expect to live another 30 years. Allowing for 2.5% inflation means that 40,000b would deflate to about 20,000 in that time. Also exchange rates have fluctuated wildly since 1997 - you might find that your income is 40% less because the baht appreciates, so your adequate 40,000b may turn into something more like 12,000b in todays money in 30 years time – i.e. you would be old and broke and unable to pay medical bills at the very time you are likely to need them most.

With all this in mind I would say is possible to retire on 8,000,000, but risky in the long term unless augmented with a nice state pension. On top of the 8 million investment fund you would need another 3-4 million to pay for a condo, car and other set-up costs.

[KevinN]

orig. Post;;I have been visiting Thailand for 12 years now and pretty much fell in love with Chiang Mai. I already bought a new house there (paid cash), Just finished furnishing all the rooms including curtains. I will buy a new Honda City car, paying cash. I don't drink or smoke and try to watch where I spend my money. I had the belief that I could easily live on 25,000 baht a month, no kids and no family to support. I calculated my monthly bills to include UBC, electricity, food, medical insurance and gas for the car. After reading the story below I was a little nervous""

There is no reason that you can not make it very easily.

You never said what country you are from,but if you are from USA then you will undoubtedly be in line for some social security pension money when in your 60's or some other form of pensions,so you can add that to your base income later.

A Honda city will take 800,000 right off the top,and your house is payed for,so that is one expense you have already covered.

You don't drink so some of the posts do not count for you, I do not drink either so i would have no idea about the cost of booze.

I have not been out of the country for over 3 years and before that,just some border runs for visa's and have no plans to ever leave,so the cost of trips home do not bother me.My short trips to town are done on a motorcycle,and I can drive half the way across the country for 500 baht worth of gasoline in our Honda car.

As has been posted somewhere ,you can get a good maid or a live in for 7000 or less a month , and she can do your cleaning,cooking and shopping and maybe if you are nice,get some fringies that will keep you home more and take care of the rampant hormones.

I say again "go for it"

[mbkudu]

Howard 251, ask yourself this question: Will it be easier for me to retire in (America, Europe) or Thailand? Pretty easy to answer I think.

[Up2U]

I don't live in Thailand, but I am considering it as a place to retire. I have seen a couple of polls on the cost of living in Thailand and Stickman has written about this on his website.

40,000b/month seems to a consensus figure of what people actually spend, with 20,000 being a lowest people claim to live on and very few people paying more than 60,000 per month unless they are on some fat expat deal where the company pays for everything.

Maybe it is possible to live on 30,000/month, but if you factor in health insurance, trips back home, buying a new car every few years I am sure this would bump up the figures.

If I retire in Thailand at 58, I could expect to live another 30 years. Allowing for 2.5% inflation means that 40,000b would deflate to about 20,000 in that time. Also exchange rates have fluctuated wildly since 1997 - you might find that your income is 40% less because the baht appreciates, so your adequate 40,000b may turn into something more like 12,000b in todays money in 30 years time – i.e. you would be old and broke and unable to pay medical bills at the very time you are likely to need them most.

With all this in mind I would say is possible to retire on 8,000,000, but risky in the long term unless augmented with a nice state pension. On top of the 8 million investment fund you would need another 3-4 million to pay for a condo, car and other set-up costs.

Remember please that the Immigration boys will want to see 800,000 baht imported every year to justify your visa.

This is not 800,000 stationary in your bank, but an active amunt to be transferred in every year - a very good reason to keep the bulk of your funds outside the country.

(Dr PP - others - please correct the above if you think my reasoning is wrong)

[ProThaiExpat]

Up2u: You mistate the financial responisbility regulation: You are required to have a balance in excess of 800k, when you apply for your one year extention, in your savings account with regular withdrawals shown for living expenses, with only one "replenishment" augmentation required yearly from abroad to bring the account back up the the minimum 800K at the time of extention.

You said

This is not 800,000 stationary in your bank, but an active amunt to be transferred in every year

Your estimate of funds needed is certainly reasonable, but a little on the high side by my reckoning. Automobiles in Thailand last at least ten years before needing replacement, at the earliest. Anyone who hopes to live in retirement on a fixed capital investment has a lot of planning to do, including management of currency fluctuations. My guess is that your scenario is the situation of perhaps only 10% of the expats retired in Thailand at the present time. The other 90% have a lot less, although how many of them are living off capital and opposed to pensions is unknown to me.

[KevinN]

And just think,,it costs more to live in the USA than it does here,so with a little money you can last a long time here,and if you run out of money and they will not give you a visa,the US embassy will front a ticket to get you back to the USA.

and if you go broke either here or the USA you only have one recourse,,live on the street and beg for food,just because you are an American does not mean that you can live there any easier than you can live here broke.

[Khun ?]

Working sounds like more fun than what I have read here. Anyone can stop working and exist almost any place cheaply. Sounds like 50 years ago style retirement, stay at home and take care of the garden if your just trying to not work. For each their own fun travel and adventure.

[tampon]

I bet you will get a lot of e-mails from dodgy people, telling you how and with who to invest your bit of dosh...

35.000 - 45.000 comfy

[sometime]

I say just go for it, thats my plan next year.

After reading loads of posts on expat sites it's not to hard to work out THE MORE YOU HAVE THE MORE YOU SPEND, as the old saying go's cut your cloth to fit.

[mbkudu]

Lots of retired US military guys live in Thailand or the Phillipines for a few reasons: A military pension isn't enough to live on in the States, the elderly in Asia

are generally treated with much more respect than in the US and of course last but not least, obtainable women are much prettier, younger and more accommadating

in South East Asia. The irony in all this is that often these beautiful, young affordable women are the ultimate downfall of the old soldier. The last 'Bullet in the heart,' so to speak.

I think for many retirees or soon to be retirees, there isn't a choice in the matter.

It's just too expensive to live at home, and for others it's just too lonely.

[Boon Mee]

Lots of retired US military guys live in Thailand or the Phillipines for a few reasons:

And a lot of 'em drink themselves to death. Saw it happen, especially in Pattaya...

[thaihome]

Lots of retired US military guys live in Thailand or the Phillipines for a few reasons:

And a lot of 'em drink themselves to death. Saw it happen, especially in Pattaya...

Which brings up the issue what do you do all day when you are living on the amounts discussed here.

I have seen UBC cost, Internet connection, computer games, etc, but that sure doesn’t sound like a good way to spend the 6 or 8 hours of free time you will have every day.

I know what I intend to do and among them is play golf at least 3 times a week. That alone will come to at least 20K a month (probably over 30K, since I like to play nice courses) for my wife and me. That makes the 40K more like 60K. What about trips away from home? Are you going to spend the rest of your life within 20Km of your house? I can see spending at least another 10K a month just seeing Thailand.

I’m sure that there are a number of people that are very happy living on 25K or 30K or even 40K, but for me to enjoy my life I just don’t see how you can do it for less the 80K. I have 3 close friends retired in Thailand and that is about what they spend.

TH

[dutch]

thaihome,

Your reaction could have been written by me.

Looks like a duplicate of our (my wife and I) planning.

Only difference is that you have some expat friends and we have some Thai(golfing) friends.

Life is good

[Boon Mee]

To enjoy a decent standard of living, anything less than 2kUSD a month would be constrictive. Personally, I don't want to be strapped behind a buffalo working the rice fields in my dotage!

[pnustedt]

Personally, I don't want to be strapped behind a buffalo working the rice fields in my dotage!

Personally, I'd rather do that than chase little white balls around a field with a stick!

[thaihome]

[Personally, I'd rather do that than chase little white balls around a field with a stick!

Good, one less duffer I will have to wait for.

TH