Investment In What?

[jimmyjaz]

Got a question.

I have 200,000 GBP cash in an Uk offshore account.

i get 5.5% interest.

What's the best long term thing to do with the money?

I will be looking for an income from this, in about three years time to retire in Thailand on,

this figure will increase to around 300,000 in the three years.

Can it be done, or is it to small an amount.

i have a condo in BKK at present.

Thanks.

Edited December 5, 2007 by jimmyjaz

[jimmyjaz]

Can someone correct the spelling in the title please.

Invetment too investment

I don’t know how to do this.

Thanks

[BalthazarBeefheart]

Got a question.

I have 200,000 GBP cash in an Uk offshore account.

i get 5.5% interest.

What's the best long term thing to do with the money?

I will be looking for an income from this, in about three years time to retire in Thailand on,

this figure will increase to around 300,000 in the three years.

Can it be done, or is it to small an amount.

i have a condo in BKK at present.

Thanks.

For starters you can get 6.5% per annum offshore (at the moment) where interestingly deposits are more than base rates - so there is an extra 2 grand per annum straightaway. The biggest dilemma you face is what 300,000 sterling will be worth in Thai Baht in 3 years time - see the other thread GBP sterling which may help although maybe not a lot.

Cheers BB

[cmsally]

If you are not using interest at present, you would be better locking into a fixed interest acct which would give you around 6.5% over next year or two.

Interest rates are predicted to fall and in 3 yrs time maybe not that high. Additionally you have exchange rates and cost of living, all these need careful consideration.

[backflip]

What is your tolerance for risk? You can get 10-year US corporate bonds, rated CCC, that pay 12.5% per annum.

[Artamus]

As mentioned, depends a bit on your tollerance to risk. You didn't also say weather you were intending to live solely off the interest, or if you want to use the capital over the years as well. If this is your "total" pot you'd obviously not want to risk it excessively. If it were me I'd put some of it in high yielding ofrfshore accounts and probably half of it in some solid equities (which are getting hammered globally at the moment). But any equity route would probably not be recommended if you need access to the capital in the short or medium term. I guess you pays yer money and takes yer choice. Spreading it about a bit is probably not a bad either either.

[jimmyjaz]

Thanks for the replies guys.

I should have the money as said, in a 6.5% offshore account.

It’s in an instant access abbey international account at present.

As for risk, I can’t afford to loose it, so this is going to limit me on what I can do.

I won’t need any access to this money at all until say three years time.

Like you guys have said, if interest rates take a tumble, I would be well stuffed.

I would not be looking to dig into the capital over my time on this planet.

I have had a little read of the other thread relating to this one.

but no real options for me, I think.

I was considering buying a place back in the uk, then rent it out hoping

the value of the property will go up, but managing a property from Thailand.

I can see this being a nightmare, but if the property say doubles in price in ten years, this could be the way to go.

On say a 200 grand apartment in the south east, i think I could get about 800

GBP a month, minus tax and the other stuff, I would get about 500 GBP

In my hand a month, this is only a guess.

I have lived on this amount before in Thailand.

What you think.

Anyone with a crystal ball out there?

[PattayaParent]

I'd put 80% of it into booze down my neck and bargirls in my bed and generally having a good time and I'd squander the other 20% of it.

At least I would if I had that much.

[blizzard]

oh my lord.

he needs money for retirement and someone recommend ccc rated bonds..................lol.

but then again op needs to tell us his total net worth.

maybe ccc bonds r ok if op is worth over 10,000,000 usa dollars.

Edited December 6, 2007 by blizzard

[jimmyjaz]

That's it 200 grand GBP

and a 3 million, condo in BKK, in my name.

no pension, no uk house, no ex wife, no kids !!!!!!!!!!!!

[Khun ?]

Many live on less than your after tax returns than you get without work and worry.

See a reputable advisor whom someone you know and trust has dealt with.

If you really don't need it for 3 years at least half of it should take a bit more of risk.

There is nothing wrong with what you are doing now and just as an estimate every % more

would be about 30% more risk. Can you sleep well with the added tension in your life.

[blizzard]

problem for this guy is reputable advisor dont want such a small account.

[Khun ?]

Most of the big investment firms I know of would be more than happy to work with the amount

he has. Check out Vanguard, Fidelty, Goldman Sachs, Lehman, Barclays, HSBC and any number of them will

offer managed funds to his needs. Definetly will not get much professional advise out here on message boards.

[gregb]

My advice, whatever else you do, keep a sizeable percentage in gold. Streettracks ETF is the big one here (Google it). Annualized performance is close to 20%. Gold is the ultimate hedge against inflation, and inflation is the most likely scenario for the future.

A deflationary scenario will probably see a sell off however, though gold is likely to suffer less than other stocks and commodities. However, I think most would agree that nothing beats cash in that environment.

The question of whether the coming global financial crisis will be inflationary or deflationary in nature is a controversial one. Basically, nobody has any clue beyond "it will probably be big and ugly." When pressed, they can't really say ugly in what way.

So, I would come up with some mix that you are comfortable with, placing a sizeable amount in gold and the rest in a basket of currencies designed to spread risk. I am not a professional money manager, but I've looked at what peakoil is going to do to markets in the future, and it isn't pretty.

Personally, I wouldn't trust a professional money manager right now. I don't think most of them have any better idea than me what is going to happen in the future. And very few understand the implications of resource depletion, and the enormous, virtually impossible engineering challenge of replacing oil in the global economy.

[GuestHouse]

I have five bits of specific advice and then some general advice.

Specific Advice

1. Pay off any debts you have. (if you have any)

2. Ignore any Personal Messages from guys with bright ideas of what they can do with your money

3. Don't bring this money you can't afford to loose to Thailand (or at least don't bring the principal - just the interest)

4. Talk to an Independent Financial Advisor back in the UK

5. Don't even dream of going near a financial advisor in Thailand

General advice (basically things to discuss with a financial advisor).

You recognize that you can't afford to loose the money you have and that in itself should inform your choices.

With that in mind ask your financial advisor for advice on at least the following:

Should you leave your money offshore (are you paying a withholding tax on your offshore account? Are you getting the best interest rate?)

What should you do about UK state Pension contributions? Have you paid enough to get a full state pension, if not should you continue to pay?

Are there any low risk investments that he can recommend that will better the interest you get in the bank?

You haven't given your age, but I'm assuming that you are nearing Normal Retirement Age (65). If you are a lot younger than 65 then ask your financial advisor to talk through inflation v capital value over your expected life span.

£200K would if supplemented by a UK state pension give a 60+ year old a decent retirement, but its not going to be enough to keep a 45 year old retired for long (read the problems some are having with relatively small/short term changes in the Currency exchange rates.

You mentioned that you expect the £200K to be £300K in around 3 years, but did not say how you are going to get to £300K.

If you are hoping to achieve that growth through investments, then you are going to need to become a little more risk tolerant.

If you are hoping to save through salary or other earned income a further £100K in the next three years then that would suggest that you ought to be talking to a financial advisor about strategies to reduce the 40% tax you must be paying.

The obvious option may be ploughing money into a Pension to reduce your tax (every £1 you pay in the tax man will contribute the tax you paid to earn that pound, commencing at your highest tax rate).

Under current rules you'd be able to take a 25% tax free draw down when you retire and you'd have an income from the pension - again talk to a UK based Independent Financial Advisor.

Houses

I think houses are a risky investment to start making now, house prices are at a peak and house price growth is falling - in some areas house prices have started to fall.

I think 'Buy to Rent' is particularly problematic since the UK has a large number of buy to rent 'mortgage owners' who borrowed the maximum and are paying the monthly installments with rents. To me that is a very fragile set up - A rise in interest rates, a decline in people renting or able to afford renting or simply a loss in confidence could very easily force a these owners to sell.

I note here that the housing market has traditionally been stable because houses where a home first and an investment next. Mr.and Mrs who have invested spare cash in a Buy to Let will be very aware that if they loose money on there 'Buy to Let' house, they might also loose their home. My gut feeling (and it is only a gut feeling) is that a slight twitch in the Buy to Let market could easily bring that house of cards down - Good news for first time buyers who have been pushed out of the market by the Buy to Letters.

However, I think housing might be a good buy in a years time if things keep getting gloomy.

A sixth piece of specific advice

I know I said 'Five' but as it was I've changed that twice already.

So indulge me and I'll add a sixth.

6. Don't ignore the fact that one of the single biggest mistakes people make when moving to Thailand is to be under funded. - Have a frank discussion with a financial advisor about your likely needs based on your age and where you want to live (keep in mind that while Thailand is cheap, it is not dirt cheap).

And finally an observation from life - it may or may not apply

As a general rule (sweeping generalization) most guys moving to Thailand will not long after arriving find themselves and settle down with a younger woman.

All well and good - But never forget, a young woman comes with a young woman's needs (and don't get distracted thinking about the needs you'd be pleased to satisfy - focus on the needs that will inevitably cost you money).

[Khun ?]

Great advice GH

Most things in life come down to what you don't lose.

Vanguard started some new retirement funds with payouts of 7% adjustable in later years to the

return average or something of the sort.

Just start reading and their is alot of free investment info. Empower yourself with knowledge.

I was looking for the newest of their funds that have a set payout and adjust after time but from faulty

memory in mu advanced age seems 7% to 8% was the higer risk ones and dependant on risk the investor

was willing to hold on to there would be a fund that fit your needs.

http://articles.moneycentral.msn.com/Retir...yAndForget.aspx

http://www.vanguard.com/VGApp/hnw/CorporatePortal

[Khun ?]

Here is part of the article and site below. Many of the large investment firms are coming out with low cost

retirement funds that distribute a monthly income/dividend. There is more to the article than I posted.

http://www.marketwatch.com/news/story/reti...8D09F961ECEA%7D

RIP tide

Retirement income products reduce guesswork with nest eggs

By Robert Powell, MarketWatch

Last update: 8:12 p.m. EDT Oct. 10, 2007Print E-mail RSS Disable Live Quotes

BOSTON (MarketWatch) -- Everyone is tripping over themselves to launch retirement income products, funds (and annuities) that take the fuss and mess out of how retirees figure out what they can withdraw from their nest eggs without having to worry about outlasting their money.

To wit: Vanguard has announced plans to offer three "Managed Payout" funds designed to provide income and preserve capital, and Fidelity Investments last week launched a "suite of retirement income" products, including income-replacement mutual funds and a deferred variable annuity with a guaranteed withdrawal benefit.

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In the case of Vanguard, the firm is offering target-risk funds for retirees: Managed Payout Real Growth, Managed Payout Moderate Growth and Managed Payout Capital Preservation.

"The philosophy behind them is the observation that investors in retirement want a 'spend only the income strategy' that allows them to keep principal secure," Daniel Wiener, editor of The Independent Adviser for Vanguard Investors, said in a release. "Vanguard wants to do that for you."

According to Wiener, the three products are designed to act like endowment accounts, making substantially equal (or level) monthly distributions while attempting to preserve capital. The payments will be determined in January, based on the prior three years' performance. "Until the funds have three years under their collective belts the payouts will be fudged, and most likely based on back-tested strategies," he said.

Unlike any other Vanguard fund, Wiener said these funds will invest not only in stocks, bonds, cash, REITs and inflation bonds, but also in market-neutral strategies and commodities, primarily through ETFs. "But, at their core these are essentially funds of Vanguard funds," he said.

According to Wiener, Vanguard's goals for two of the funds (Managed Payout Real Growth and Management Payout Moderate Growth) are tied to inflation, while Managed Payout Capital Preservation's goal is to produce a 7% distribution rate. According to Vanguard, both the Growth and Moderate Growth funds' goals are to exceed inflation by 5%. But the Moderate Growth fund's goal is to distribute 5% per annum while the Growth option distributes 3%.

"The idea here is that the Growth option will have the lowest payout but will provide the greatest opportunity for capital appreciation while the Moderate Growth option will temper growth and produce a higher payout. Obviously, the Capital Preservation option is not concerned with growing capital but, instead, paying out lots of income," said Wiener.

Of note, many financial advisers suggest that retirees withdraw no more than 4% to 5% per year (on an inflation-adjusted basis) from their retirement funds.

[jimmyjaz]

Thank you all for the advice. Sorry it was so long for my reply

Got a bit lazy the last few months.

I will be getting some professional advice back in the uk.

And a big thank you to guesthouse, great post.

I only got one guy trying to sell me something.

Via a pm, was quit surprised it was only one.

Thanks again all.

[egg6447]

yep g/h does it again. just a little fine adjustment i would make is, stand buy to but property, if you have cash. not done homework recently but i believe its a buyers market now or very soon. do your homework. the down side would be management, can be a nightmare.safety, annuities, never thought i,d say that in my younger days but i must be getting old, certainly lazy, hence not keeping up with property markets, . nowa days i sit back with my rentals, drawdown pensions, pensions, eguities and stocks. what do i know about investments?. zilch.but i seem to have got it right. oh i probably have just a bit more than your forecast in three years. so there ya go. regards

[sparrow]

I was considering buying a place back in the uk, then rent it out hoping

the value of the property will go up, but managing a property from Thailand.

I can see this being a nightmare, but if the property say doubles in price in ten years, this could be the way to go.

On say a 200 grand apartment in the south east, i think I could get about 800

GBP a month, minus tax and the other stuff, I would get about 500 GBP

In my hand a month, this is only a guess.

I have lived on this amount before in Thailand.

What you think.

Anyone with a crystal ball out there?

Property prices might go down a bit in the next 1-2 years and then hopefully pick up again. I'd say this is a safe place for your money and provide a regular monthly income for living expenses, plus should be a good investment. An agencey could take care the propperty for you but fees are quite steep. Also I belive I'm right when I say if your not in the uk for more than 3 months a year your classed as non-resident and don't have to pay any tax. You don't even have to fill out any special form, the fact your not there is enough, don't pay the inland revenue and if they ask questions point to your passport. Similarly any tax on interest from saving accounts can be reclaimed.

Alternatively you could buy condos in thailand to rent out as your income. Given that the bht looks set to continue strengthenning this may suit you best if you wish to stay permantly in thailand and easier to manage perhapse.

[Nomad97]

quote: Also I belive I'm right when I say if your not in the uk for more than 3 months a year your classed as non-resident and don't have to pay any tax. You don't even have to fill out any special form, the fact your not there is enough, don't pay the inland revenue and if they ask questions point to your passport. Similarly any tax on interest from saving accounts can be reclaimed. quote

I am sorry to disappoint but I do not think you are quite right in your assumption that you do not have to pay UK tax if you live overseas. For sure, after the necessary qualifying time, you may apply to become "Ordinarily non-resident for UK tax purposes". Any money that you earn overseas will not be subject to UK tax. However, it is my understanding that any money earned in the UK is still subject to UK income tax, e.g. pensions, house rentals, investments etc. That said, you get your full personal tax allowance to offset your UK tax liability.

[Naam]

What is your tolerance for risk? You can get 10-year US corporate bonds, rated CCC, that pay 12.5% per annum.

a meagre yield for a CCC rating!

[pkrv]

That's it 200 grand GBP

and a 3 million, condo in BKK, in my name.

no pension, no uk house, no ex wife, no kids !!!!!!!!!!!!

Just one missing, and critical point, age?