Americans Retired In Thailand

[Naam]

Well, here we go again...another thread discussing personal finances. The last time I laid out my finances, I had a couple of idiots really flame me. So running that risk again, my monthly income has a base of $4,800 in fixed retirement funds and another $2,400 per month when I'm renting our home in Santa Fe. My cost of living in Bkk is 60,000 baht to 80,000 baht. So having the dollar drop to 25/1 is not going to impact me.

flame! envy flame!

....................................

[cloudhopper]

I'm considering a move back to Mexico, but not sure yet. Its currency has remained remarkably stable against the US$, actually weakening in contrast to the Thai baht which strengthened. Their inflation is higher than here or the US, but probably no more than ten percent per year. I could survive here on 25 baht to the $, but it would be tougher. My contacts in Mexico say that I might spend less money there. I could speak the language. I could teach legally. I would be closer to home. I could even eat half the food, and tell them how to cook my eggs!

You'ld also be far more likely to fall victim to the rapidly increasing violent crime rate there too. I know this thread is about money, but you really have to ask yourself - how much is my life worth? This of course holds true for other risks like transport, public and private construction/inspection practices, contracting (and successfully getting treatment for) a water/food/air borne illness, legal/public/private attitudes toward foreigners in general etc. etc. that all must be carefully weighed in the bang for buck equation too.

[farang prince]

Well, here we go again...another thread discussing personal finances. The last time I laid out my finances, I had a couple of idiots really flame me. So running that risk again, my monthly income has a base of $4,800 in fixed retirement funds and another $2,400 per month when I'm renting our home in Santa Fe. My cost of living in Bkk is 60,000 baht to 80,000 baht. So having the dollar drop to 25/1 is not going to impact me.

flame! envy flame!

....................................

Ah, you are so right Dr. Naam. By the way, happy birthday. Are you really that young?

[Jingthing]

Surprisingly you left out Cambodia which is not only tied to the US dollar, it's their primary currency.

Cambodia is entirely inappropriate as a retirement destination. No medical care.

I agree that Argentina is a bad bet for Americans, their money is likely to strengthen and there is high inflation. But I do love the wine and steaks.

[britmaveric]

I don't think it will affect much of anyone unless they are living on the edge. Let's face it, living on the edge has more chance of hurting you in the long run then in the short term. However I wouldn't worry too much Yanks will be fine. Expected increase of GNP in 08, of 2-4% isn't too shabby for the worlds largest economy.

[Jingthing]

I don't think it will affect much of anyone unless they are living on the edge. Let's face it, living on the edge has more chance of hurting you in the long run then in the short term. However I wouldn't worry too much Yanks will be fine. Expected increase of GNP in 08, of 2-4% isn't too shabby for the worlds largest economy.

I don't agree with you at all. Many people perhaps being reckless moved over here expecting a 40 to 1 exchange rate perhaps thinking they could easily handle 35 to 1. 25 to 1 means a major downgrade. As the poll results show, either alot more people are living on the edge than you think, or as I think, this currency move would have a generally wide fallout.

A move this dramatic will really weed out many of the economic refugees from those who really love Thailand. I am a mix, so again, I am not sure I would do yet. Probably keep my options open as usual.

Edited November 5, 2007 by Jingthing

[Firefan]

I agree with Britmav, that one needs to ensure a certain buffer, either in income OR in capacity of adjusting ones standard of living (downgrading rent, car, travel, eating out Etc.) when one plans retirement (or early retirement) anywhere.

Not only have the Thai currency gotten stronger, but inflation also seem high - my personal inflation rate have been in the range of 10%/year looking at everything from groceries to services, utilities, eating out, transport(except taxis) Etc. That is a double blow for the retiree with a USD base.

Cheers!

[Jingthing]

What one needs to do and what MOST people actually do are not always in the same universe. How many people plan and are prepared for a world depression? I find that talk kind of elitist really.

Edited November 5, 2007 by Jingthing

[farang prince]

What one needs to do and what MOST people actually do are not always in the same universe. How many people plan and are prepared for a world depression? I find that talk kind of elitist really.

Jingthing, my biggest concern is if the USA goes into a deep recession, which is being predicted by some of the leading economists in the USA. If that happens, then everything will be open to review.

[britmaveric]

Worrying about living in the future isn't living, so best to make sure you have no need to worry later in life when u are retired.

[Jingthing]

Well, now we are the ones who know how it feels to be carrying the impotent money.

[Jingthing]

Worrying about living in the future isn't living, so best to make sure you have no need to worry later in life when u are retired.

You mean when you are dead? What a load of idealism. You are talking about maybe 5 percent of the population.

[ProThaiExpat]

I wonder if globalization will eventually make all living standards about the same. When I came to Thailand five years ago brought in my dollars at 44 and was able to live on them in the interim. Now I am bring in dollars as needed at 33. That depreciation in the conversion rate ate away half of my buffer. At 25 all of my buffer will be gone. No change in lifestyle, just no margin for error. At 25 it might be that cost of living in Thailand will be close to that of the U.S excluding housing.

However, owning my own home here makes a major difference. If I had to pay rent in the U.S. to live, I would be on poverty row or living in the boonies where you can get an apartment for 500 USD a month.

It is conceivable that with a new administration in the U.S., an end to the government paying full price of medicare funded drugs for seniors, the end of the war in Iraq, etc. the dollar will strengthen. The pig has been at the government trough for almost eight years and the value of the dollar reflects profligate spending by the government, the vast increase in government employees and consumer spending on imported goods.

A recession will do much to decrease the buying of imported goods, as will the every lessening of the value of the dollar. I believe in cycles in all things. I disagree with those who say what goes up cannot come down. The complexity of intergovernmental banking is such that I think trying to beat the currency market is a recipe for financial disaster. At least for me, when I see the vast rooms filled with Wharton graduates sitting behind multiple computer screens trading currencies for a living, I am given pause. Go to it if you think you can but it has to be more luck than anything as these traders eat lunch together and command such vast resources that they can affect market prices as a group, and then of course there are the computerized trading programs to outwit!!!

[Firefan]

I agree that many do not follow a prudent planning course, but many others do - nothing elitist about it at all - just common sense.

A world depression (which is the extreme case you bring up) would naturally noth be something one can avoid all together, but again; rents would drop, real estate would be cheap, gov. pensions would continue to pay out, maybe gold/precious metals would surge Etc. Most important in retirement (or early retirement) is to stay nimble and flexible - especially with ones spending.

(Ps. jingthing -you hate the "elite"?(whomever they are))

Cheers!

What one needs to do and what MOST people actually do are not always in the same universe. How many people plan and are prepared for a world depression? I find that talk kind of elitist really.

[Jingthing]

(Ps. jingthing -you hate the "elite"?(whomever they are))

Yes, I am a communist. There you have it.

But just in case, I have a very diversified equities portfolio. You can't be too careful!

But, really, I do believe there is class warfare in the US and everywhere. And the elite class is winning the war big time!

Edited November 5, 2007 by Jingthing

[LinkPopularity]

well, you can ask your bank for a secure currency account, in that case you have a fic currency rate, it costs ya 2% extra on each transfer and some other requirements, but then your sure of what you'll get.

[Firefan]

Clever move Jingthing. So do I. Incl. global bonds, commodities, reits Etc. Hopefully some will go up when others go down. (diversification into non-correlated asset classes).

Even more importantly I have bought condo here thereby reducing my risk/dependance on as much Baht being brought in monthly - I.e. I take less of a "blow" on the currency side than people that rent.

Also; I am willing to downgrade from my current lifestyle, be it Leo instead of Heineken, renting out my current place and rent myself elsewhere for less, sell the car and use public transport, eat out at less expensive joints Etc. I.e. I have the buffer and will to do so should it become relevant.

If it comes to a no-window shoebox of a room, and testing out whether Whiskas is better than Meow Mix while drinking Lao Kao I would be hard pressed, and looking for alternatives (if any). Cheers!

[Jingthing]

I have bought condo here

Me too. And I think I could handle 25 to 1, but not sure I want to handle it.

One idea I had is that if the dollar crashes the Euro and Pound will still be strong. So sell my condo and rent and take a huge profit just based on currency movements, and then move somewhere cheaper in Thailand.

[altman]

cambodia is tied to the dollar but if the dollar falls then won't cambodian prices rise to reflect that? property there is already grossly over inflated.

a condo on the beach? what about rising ocean levels from global warming? won't that effect your chances of selling? even if it is not true your buyers might think it is true.

forex trading? did some pretend trades and lost my shirt.

etf and other stock and bond trading? sure, for some people that might help, but things go down as well as up. no safety in that.

basically if you exist on a limited or fixed income you will have to adjust your standard of living. whether it is here or in south america.

since it is GWB's 'strong dollar' policy that has caused this drop, (yes i know. war, deficits, oil, etc but who is responsible for these?), then my only hope is to hold out for the election and hope the world economic community thinks that a change at the top will make a difference. false hope probably, but that's the way i see it.

more likely the fall in the dollar will cause a decrease in imports and a drop in the world economy bringing about a drastic re-alignment in all currency values and standards of living.

[Jingthing]

Bush actually had a weak dollar policy. It helped temper the budget deficits. I don't see a big change in this with Hillary. A weak dollar is also good for the domestic US economy. Just rough on us expats.

[mellow1]

I hope at 25 to 1, I can sell all our property here in Thailand, ride out the storm and make a great profit. I,m just not sure what will happen to the Thai economy if this happen, and if people will have the funds to buy anything.

[Sakeopete]

Excuse my ignorance of world money matters but if the worlds largest economy's currency falls too much so does their buying power. Since Asia's biggest market is the US doesn't that affect their exports? And if their factories lose orders will that not hurt Asian economies therefore lowering Asian currencies?

[ProThaiExpat]

I am the last to join conspiracy theorists, however, it has occured to me that the G-7 and many strong currency nations have been very benign in protecting their currencies from strengthening against the dollar and thereby ruining their export market. Granted, Mercedes makes their cars in the U.S., but what what about the majority of exporters from countries exporting to the U.S. They are all hurting and yet no one seems to be intervening to any great degree. China is deliberately keeping the value of their currency down to not fall into this trap, as the U.S. is their largest trading partner.

My thought is, how does a world leader who's population is against the war in Iraq, help the U.S. without seeming to? My thought is by allowing the U.S. dollar to weaken against one own's currency and taking the export hit, you are helping the U.S. finance its war against terror without seeming to.

What do you guys think? Am I losing it?

[cloudhopper]

The $ is falling and will continue to fall because the US is printing it as fast as it can. Why? Think about the massive US debt, a huge fraction of which is owned by China and the Middle East, which must be repayed in - what currency?

[Firefan]

Thing is that only way to counter the weaker USD is to "weaken" (relatively speaking) your OWN currency, basically by "printing" more money (or by direct governmental control for countries like China having a restricted currency).

That IS probably happening - but not to a scale that can counter the wads of USD floating around in the global monetary system.

ALL currencies are weakening when comparing to real stuff like gold, oil and other commodities.

Cheers!

[Jingthing]

I hope at 25 to 1, I can sell all our property here in Thailand, ride out the storm and make a great profit. I,m just not sure what will happen to the Thai economy if this happen, and if people will have the funds to buy anything.

Well, in farang heavy markets, sure they would.

You point out the obvious, in even the darkest sounding economic news, there are winners and losers, sometimes (like people who are hedged like me) the same people are both.

Edited November 5, 2007 by Jingthing

[Firefan]

Owning ones own condo here surely soften the currency and inflation "blows" and gives a few more options/flexibility as mentioned.

First of all; rental inflation and currency changes will not affect the owner; meaning a more stable budget measured in foreign currency(currency devaluation+inflation) as well as THB(inflation).

Should the real estate market go downhill both buying and rental price wise it does not really matter as one live in the apt. anyway but there are still options if one need more income due to weaker USD; If one owns a more expensive place/good location that in "good times" would rent out at say Baht 70k/mth, in "bad" times one can maybe rent out for say Baht 50k/mth and rent at cheaper place/other location(that also drops in rental price) for say Baht 20k.

Finally one can as mentioned consider selling should the Baht hit 25/USD - and simply invest the money abroad (hopefully in different currencies/assets and not just USD based assets ) and use that incme to pay for the rent/extra income needed.

Just leads back to my main point; ensuring flexibility in choices/spending is key for any retiree.

Cheers!

[Jingthing]

Unscientific poll of course, but I am surprised by the large number of people who would definitely leave as well as the undecideds. When you add those numbers together as of now, its a majority.

Will we be missed? (Don't answer that.)

Edited November 5, 2007 by Jingthing

[tropo]

My rent has already gone up over $100 per week since last year...

I'm also not going to move into a one-room dump to compensate for the falling dollar.... it would be bye bye Thailand for me.

you are paying nearly 15,000 Baht more rent than last year, i.e. your monthly rent exeeds 70,000 Baht? if that is the case you still have a long way to go to a "one room dump". a friend of mine just rented a nice, brand new and fully furnished but rather small house (120m², 3 bedrooms, 2 bathrooms) Pratumnak Hill area and pays 25,000 Baht a month.

I'm sorry, that was an error. I meant to say my rent has gone up over $100 per MONTH, not week. It's just an old habit from Australia where most rentals are indicated in weeks.

[bubbaba]

For the sake of many I would hate to see the baht fall to 20 to 25 to the dollar. But if you own your own home and control your spending, you could live on much less then you think. IMO I think staying would be better then moving.

Also, if married, remember that imigration considers your wife's pay plus yours. Easy to show 45,000 bhat per month and be allowed to stay.

Don't ever think that the grass has gotten greener back home. From what I hear it would be hard to exist in the USA on my income as compared to what it was 15 years ago.