How do expats protect against exchange rates

[LeeUklondon]

6 hours ago, Stevemercer said:

Leave the bulk of your capital invested in the UK. Make sure you have adequate liquidity to withdraw pounds and transfer when you need to. There should be tax-favourable retirement investment funds available.

 

Keep enough Baht in Thailand to live for up to a year if exchange rates take a dip (e.g. you can wait maybe 12 months before you have to transfer more funds across and, hopefully, the exchange rate may recover). It also serves the same purpose if the stock market dips and you want to avoid withdrawing any money for a year.

 

I used to use my 800,000 Baht kept in a Term Deposit for my 12 month retirement extension for this purpose. If the exchange rate (and market gains) were reasonable/stable, I would transfer a sum each month. But if the exchange rate dipped, I would draw on the 800,000 Baht until it improved. Unfortunately, they changed the rules a year or two back so it is no longer so easy.

 

I did change to a marriage extension (400,000 Baht) where there is more flexibility and figure I could draw it down (10 months at 40,000 Baht per month) if I had to. I started doing this early last year, when the Aussie dollar dipped, and the stock market also crashed due to Covid.

 

Fortunately both the Aussie and the stock market have recovered so I will shortly withdraw and transfer enough to replenish my 400,000 Baht (needs to sit for 2 months before renewing my extension).

 

 

Many thanks. 

 

I am thinking that having enough enough to cover immediate expenses and not being forced to buy at the bottom is probably the way forward. Whether this is stock market / exchange rate/ or even house. 

[bwpage3]

7 hours ago, spidermike007 said:

If I were in a position, I would have as much cash over here as I could, converted into baht, in whatever interest bearing accounts I could find, that are relatively secure. I realize there is some loss of interest income, possibly. But, I see the baht holding steady, or rising significantly over Sterling, the Euro, and the dollar, over the next decade. Possible 18-20 baht to a dollar. 

You see it rising on what facts?

[scubascuba3]

4 hours ago, LeeUklondon said:

Many thanks. 

 

I am thinking that having enough enough to cover immediate expenses and not being forced to buy at the bottom is probably the way forward. Whether this is stock market / exchange rate/ or even house. 

In your calculations have you included inflation for the next 20+ years? it has a massive effect, most people ignore it. The way I did it was have different expense options, A, B, C etc all incl inflation, include cash flow in such as drawdown, pensions etc, then apply different exchange rates, see how tight the money is over the period you plan to be here

[mahjongguy]

For the first 11 years that I lived in Thailand I imported USD on a quarterly basis regardless of the exchange rate. That's averaging. Anything else would be gambling.

 

But, in 2016 I became concerned about the future of the USD and began bringing in more dollars than needed for my expenses. That was a gamble but so far it has paid off. The baht that I am holding is worth about 10% more than I paid for it. That doesn't really amount to a whole lot but it feels good to get a bit ahead of the curve.

 

BTW, the Thai stock market does not offer Exchange Traded Funds like those on the NYSE. Just ordinary mutual funds, and they have done miserably over the past decade. Worse yet, they don't pay dividends on a scheduled basis, so they are useless as dependable income. 

 

[kingdong]

On 1/25/2021 at 11:51 AM, LeeUklondon said:

I suspect I will do the same. 

 

I am assuming at the time you thought the risk of transferring everything was too high? Political changes, relationship risks (not being able to get back if it went  bad).....I certainly don’t feel confident transferring everything as I don’t feel I understand thailand the same way I think I understand the uk.

I personally wouldn,t burn my bridges with the uncertain world at the moment,also you have to remember thailand is ran by a military government and the baht i feel is too strong at the moment,remember what happened in 97, still up to you.

[kingdong]

10 hours ago, scubascuba3 said:

She'll want gold, motorbike, pickup, house

And his undying love you old cynic.

[madmen]

7 minutes ago, kingdong said:

I personally wouldn,t burn my bridges with the uncertain world at the moment,also you have to remember thailand is ran by a military government and the baht i feel is too strong at the moment,remember what happened in 97, still up to you.

Your basing your investment advice based on a crash that happened 24 years ago and you put up no technical info to back yourself? You don't know what your talking about 

[kingdong]

2 minutes ago, madmen said:

Your basing your investment advice based on a crash that happened 24 years ago and you put up no technical info to back yourself? You don't know what your talking about 

???? I stated facts before i mentioned 97, so why don,t you enlighten me with your superior knowledge?

[madmen]

"Is this feasible? I get the impression expats keep their money invested in their home countries and transfer when needed?" 

 

OP Those guys repeating the mantra of "never put even one baht in a Thai bank, keep your money back home where it's safe" totally screwed themselves watching there money hemorrhaging against the baht over the last 7 years and after paying taxes on their western investments means most are deep in the red. 

 

TV is the worst place for investment advice. You are far better talking to a financial advisor in Thailand. 

[madmen]

6 minutes ago, kingdong said:

???? I stated facts before i mentioned 97, so why don,t you enlighten me with your superior knowledge?

"I feel the baht is to strong" this is your FACTS? 5555 

Go look up foreign reserves. Do some diligence, don't be lazy 

[kingdong]

1 minute ago, madmen said:

"I feel the baht is to strong" this is your FACTS? 5555 

Go look up foreign reserves. Do some diligence, don't be lazy 

And how long will that last when the worldwide depression starts? Facts?yeah thailand is ran by a military government,fact the baht crashed from 35-90 in 97 fact,it was also a fact  the other 2 points were personal opinions to consider.so you feel anyone would be better talking to a financial advisor in thailand ? 

 

[Salerno]

21 minutes ago, kingdong said:

the baht crashed from 35-90 in 97 fact

 

Not fact at all. The Baht was pegged at 25 not 35.

[zoza]

on the day and for weeks afterwards, when it was reported world wide that a rocket propelled grenade was  fired in the carpark of the main airport in Bangkok ,(red shirt v yellow)

the Thai Baht did not alter in regard to other currencies (  i think the uk had pictures of MP,s sleeping in Parliament) 

gave up on trying to figure money exchange rates and any ''logic'' in Thailand.

[kingdong]

55 minutes ago, Salerno said:

 

Not fact at all. The Baht was pegged at 25 not 35.

I was referring to £1 sterling not usd,the posters avatar is leeuklondon which would give a clue to his country of origin and currency used.

[Salerno]

3 minutes ago, kingdong said:

I was referring to £1 sterling not usd,the posters avatar is leeuklondon which would give a clue to his country of origin and currency used.

 

I sit corrected.

[Ron jeremy]

Never sell up in your home country. You never know what may happen, keep your cash there as well

draw in as needed 

[scubascuba3]

4 hours ago, madmen said:

You are far better talking to a financial advisor in Thailand. 

That's probably the worse advice I've ever read on here 

[spidermike007]

9 hours ago, bwpage3 said:

You see it rising on what facts?

 

The general decline of the Western world, and the general rise of Asia, as the center of growth, over the next century. I just do not see much in the way of forward policy in the West, anymore. Just more of the same. Sure, they do have some of the technology, but so does China now. It will be fascinating to watch this unfold, but I do see these next couple of decades as the last days of American influence and might. It happens with all nations. America's days as a leader are coming to an end. It has been slowly unfolding for at least 30 years now. 

 

This was written in 2012. Very prophetic. Though I question why Russia in on the list.

 

The collective strength of the West is, however, on the way down. During the Cold War, the Western allies often accounted for more than two-thirds of global output. Now they represent about half of output--and soon much less. As of 2010, four of the top five economies in the world were still from the developed world (the United States, Japan, Germany, and France). From the developing world, only China made the grade, coming in at No. 2. By 2050, according to Goldman Sachs, four of the top five economies will come from the developing world (China, India, Brazil, and Russia). 

 

https://www.theatlantic.com/international/archive/2012/03/the-decline-of-the-west-why-america-must-prepare-for-the-end-of-dominance/254779/

Edited January 27, 2021 by spidermike007

[rickudon]

Crystal ball gazing is never easy ........

 

My thoughts/experiences. When i first came to Thailand, i got 68 baht to the pound, and i was making 6% per annum on my UK bonds. Also had index linked pension. So what could go wrong! Answer nearly everything! I planned on having 50 baht to the pound minimum, and did apart from a few months, until Brexit destroyed the GBP.  Interest rates fell steadily over the last 12 years (and now basically non-existent). No inflation also meant no pension increases. My UK investment ISA invested in UK stocks also failed tp grow practically at all over 5 years. Shortly before Brexit i moved that investment into an international fund, which has done reasonably well (5-9% a year).

 

I think money invested in Thailand is slightly more vulnerable to fraud, and i would agree the baht has probably peaked - nearly everything now cheaper somewhere else in the world. Future - who knows?

[bwpage3]

10 hours ago, spidermike007 said:

 

The general decline of the Western world, and the general rise of Asia, as the center of growth, over the next century. I just do not see much in the way of forward policy in the West, anymore. Just more of the same. Sure, they do have some of the technology, but so does China now. It will be fascinating to watch this unfold, but I do see these next couple of decades as the last days of American influence and might. It happens with all nations. America's days as a leader are coming to an end. It has been slowly unfolding for at least 30 years now. 

 

This was written in 2012. Very prophetic. Though I question why Russia in on the list.

 

The collective strength of the West is, however, on the way down. During the Cold War, the Western allies often accounted for more than two-thirds of global output. Now they represent about half of output--and soon much less. As of 2010, four of the top five economies in the world were still from the developed world (the United States, Japan, Germany, and France). From the developing world, only China made the grade, coming in at No. 2. By 2050, according to Goldman Sachs, four of the top five economies will come from the developing world (China, India, Brazil, and Russia). 

 

https://www.theatlantic.com/international/archive/2012/03/the-decline-of-the-west-why-america-must-prepare-for-the-end-of-dominance/254779/

General rise of Asia? Come on.

 

China is still buying commercial aircraft from abroad, has no world class cars of their own and relies on incessively dumping copyrighted and low class goods all over the world into third world countries.

 

Thailand as we can see, has no solution for any of their problems including air pollution, floods etc. No space program, no world class manufacturing of anything, except corruption.

 

Give it a couple years, you won't even be able to see or breath in Bangkok.

 

American influence? Come on man. Do you have your eyes closed? Look around Thailand, it is and has been being replaced with ALL things American. Iphones, Fast Food out the wazoo, brand names, even cars. 

 

It's 2021. Asia will never rise to meet the standards of the rest of the world. Corruption and inaction will always be the downfall in Asia.

 

Hooters! McDonalds! Burger King! Carl Juniors! Western Sizzler! American brands are all people aspire to obtain.

 

Carabo's song "Made in Thailand" comes to mind. Thai people won't buy the same shirt made in Thailand for 30 baht, but will pay 1000 baht when it comes back branded from America.

 

Thai politician's care about themselves only. They could care less of the status of the country.

 

I suspect that is why you see so many rich Thai's in Florida and other countries these days.

 

[LeeUklondon]

17 hours ago, scubascuba3 said:

In your calculations have you included inflation for the next 20+ years? it has a massive effect, most people ignore it. The way I did it was have different expense options, A, B, C etc all incl inflation, include cash flow in such as drawdown, pensions etc, then apply different exchange rates, see how tight the money is over the period you plan to be here

Good point on inflation. I am aware that it is the pension “killer” and that is why it is recommended by some people to keep some money invested as it will go up with inflation, but I have not included it yet in my calculations. 

 

Now it is getting pretty complicated maybe I should just invest in the assets my gf recommends, gold necklaces, pick up truck, house in Isaan ???? 

Edited January 27, 2021 by LeeUklondon

[oldhippy]

Inflation is a pension killer only if your country of origin does not adjust your pension to inflation rates.

[LeeUklondon]

8 minutes ago, oldhippy said:

Inflation is a pension killer only if your country of origin does not adjust your pension to inflation rates.

I was thinking more of my parents who keep their money in the bank, because they don’t want to take any risks. They get 0.5%, whereas inflation is 2%

[scubascuba3]

5 hours ago, LeeUklondon said:

I was thinking more of my parents who keep their money in the bank, because they don’t want to take any risks. They get 0.5%, whereas inflation is 2%

I'm thinking more inflation in Thailand, last time I looked it's around 3%, based on that a 100 baht expense would become near 200 baht in 20 years time. So if you are living off 40,000 baht now you'll need 80,000 in 20 years

[LeeUklondon]

8 hours ago, scubascuba3 said:

I'm thinking more inflation in Thailand, last time I looked it's around 3%, based on that a 100 baht expense would become near 200 baht in 20 years time. So if you are living off 40,000 baht now you'll need 80,000 in 20 years

Ouch. I am thinking more and more that you have to keep your money invested, so that it grows with inflation. Risk a stock market crash versus risk inflation, 

[scubascuba3]

1 hour ago, LeeUklondon said:

Ouch. I am thinking more and more that you have to keep your money invested, so that it grows with inflation. Risk a stock market crash versus risk inflation, 

markets do crash but they seem to recover. With pension drawdown you can keep your pension invested and just drawdown (sell some investments) when you need it, or reduce drawdown when markets are low such as from March last year

[AgMech Cowboy]

On 1/26/2021 at 3:27 AM, kokesaat said:

Over the past 20 years, my advice to people considering a move to Thailand has been to plan for the worst (as in 20 Baht to $1 during GI daze in the 70's).  If you can survive on the worst, then you won't be sweating small dips in the exchange rate here and there.

Good luck with your plans

Very good advice!!!