Retire At 45

[Naam]

I cant seem to spend less than 120k per month and approx on average I send 8k EUR a quarter to Thailand.

i assume that excludes rent, am i right?

[LivinLOS]

Nope rent included.. Tho I have just radically downsized thanks to a landslide destroying the old villa !!! But I really dont live the high life.. Simple guy with basic pleasures and dont have any nasty / expensive habits (any more).. As per the poster some way back I am much happier at this stage of my life saving the bulk of my investment returns and rolling them into the pot and keeping things pretty simple.

The one luxury I do really want and keep toying with the idea of is a sailboat.. Its just such a great spot of the world for it.. But as the old adage goes, if it flies floats or fuc_ks, rent it !!

Edited January 23, 2008 by LivinLOS

[chiang mai]

Nope rent included.. Tho I have just radically downsized thanks to a landslide destroying the old villa !!! But I really dont live the high life.. Simple guy with basic pleasures and dont have any nasty / expensive habits (any more).. As per the poster some way back I am much happier at this stage of my life saving the bulk of my investment returns and rolling them into the pot and keeping things pretty simple.

The one luxury I do really want and keep toying with the idea of is a sailboat.. Its just such a great spot of the world for it.. But as the old adage goes, if it flies floats or fuc_ks, rent it !!

I'm 100% in support of Kuhn K's thoughts on these matters and I support his expenditure estimates. I also know he will keep looking forward - but sailboat, hmmm.

[ade]

what puzzles me in this and other threads are naive (no offence meant!) views and expectations that one can retire holding equities because "in the long run...".

Naam, I don't consider myself naive, but plan on having most my retirement portfolio in equities. I'll keep $150k in cash like investments that would cover my needs in Thailand for 5-7 years. This would put me in a good position to weather any of the equity market drops that happened over the last 50 years. It seems you are judging other people's needs based on your needs. Myself and the OP don't have the same income requirements as you.

Hey, maybe I'm naive. Help me comprehend my error in judgment. Not being sarcastic - find your posts entertaining and insightful.

i realized to late that my post could be construed as meant for you S-Am, but i assure you that is not the case. you mentioned that the $30k is dividend income and that means a calculable income assuming the companies are sound.

if you scour to the various "money/retirement" threads in TV-Forum you will find dozens of postings where potential retirees plan to hold equities and selling a part to finance their living expenses because "in the long run equities go up in value". some of these as well as others throw around figures and percentages concerning yield and inflation which raise the hair on my neck and again others neglect inflation completely. this is what i call naive. what i gather from your postings is that you belong to neither group but are a rather bright young man.

i also don't judge you according to my needs and have stated in this forum multiple times that even a Farang can lead a happy life on a tight budget in Thailand. we have a saying in german "one has to stretch according to the size of the blanket". needless to say that those (or most of them) with big blankets not only stretch as they please but might even roll around under it.

my answer to the OP of this thread states clearly my view:

"none of us is qualified to answer that question! it all depends on what lifestyle you expect to lead. the same goes for your question whether to retire or keep on working. if you retire and find out that you are (contrary to your expectations) living like a pauper when you are 50, well that's bad luck. you will say "i made a wrong decision". if you keep on working till 50, your capital has grown to 1 million dollars and you are diagnosed with terminal cancer you will say "<deleted>! how could i make such a stupid decision!"

Couldn't agree more with your sentiments which is what makes it a difficult decision.

The consencus is that $30,000 income may be on the low side Therefore more capital is required given the same risk profile to generate say $40,000 income.

Many people have offered investment advice which is not quite the point of this thead but since other peolple have mentioned it.

The current bear market has automatically prevented me from retiring imediately. Dividend income is currently as cheap as I have ever seen it. Building income and capital is the obvious imediate objective. A two or three year bear market followed by a bull market will suit me perfectly. I expect I will then be able to join all you fine chaps in the land of smiles.

[ade]

I am 45 and considering my options regarding retirement. I hope to to retire in Pattaya or Chiang mai. I have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

Any self funded retirees happy to tell me if this a comfortable position from which to retire?

Bearing in mind I will have to pay for visa runs probably to Malaysia every 3 months.

Currently I have the option of working which obviously means I will have more assets if I retire at a later date.

Great topic, plus some good posts above from a lot of perspectives, as well as aspects to consider.

Looking specifically at your model, and leaving aside the other issues, as the topic is otherwise too diverse: I feel you are underestimating the equity risk in your portfolio, when looking at your income/wealth. I believe it is better to look at overall return not just dividend income, for the following main reasons:

A) to better revalue/mark-to-market your capital. This is important in times like now. Unforeseen events may require you to realise your capital at undesireable times, eg a need for funds at this moment would hit you badly as you stand. I have large equity exposures now, but as I'm working could replace losses.

If you seek only dividend/high yielding shares you limit your investments. Additionally you make it harder to diversify your portfolio and reduce risk.

I'm a big fan of equities, even appreciating current market risks, because over time they outperform cash and bonds. I think you need to be careful in allocating your %s here.

For the last few years when I have been considering/planning early retirement I have been thinking along the following model, rather than fixed percentages. NB focus is on capital allocation. Insurance etc needs to come out of income. There's actually a few more elements to it, but these are the key ones.

1) 5 years cash or cash equivalent (perhaps some held to maturity govt bonds), but nothing with market risk to capital. Why 5 years? In the 25-ish years I've personally been investing in equities, there has never been a time I have lost money over a 5 year time frame. This will earn some interest/return, but the key is preservation of capital.

2) House paid, with a roof over my head.

3) The bulk of the remainder could be in equities: - although it would also include other instruments to diversify. This is the part if you told me 85% equities 12% bonds, 3% cash I would say OK under my model, if I have 1) and 2) in place

4) Assume a return of 7% on the portfolio. (I've proved longer term, i.e 5 years+ cycles I can regularly exceed this figure)

5) Take 4% from the portfolio in good years. Live off this 4% (or preferably less). Don't focus too much on dividend income or capital growth, but focus on ensuring your portfolio remains balanced as to your views on what are good investments. The danger on just taking dividend income is that over time you'll have a higher % of growth shares.

6) Leave say 2% for inflation, and 1% as your buffer.

7) The 2% inflation is left in the portfolio, so it grows with inflation. Next year your income you take is effectively 4% + 4%x2% under this method, i.e income grows in absolute terms in line with inflation although 4% is retained.

8) The 1% buffer you view separately in how you invest. Could be bonds, cash, equity, depending on your views. It is kept for the individual years you lose money on your portfolio. This way you can accommodate 4 years of positive returns and 1 year of negative returns, without dipping into your main pool of capital. Instead in the negative return year, you take from the buffer, and don't reduce your main portfolio capital

9) Any excess over 7% I would leave in the portfolio. But again you can vary from time to time

10) Regularly look back and check your numbers, to ensure you have 5 years cash, and your portfolio kept pace with inflation.

BTW You can vary assumptions 4) - 9) to fit your views on inflation, returns etc. In reality you will need to revise and tweak them as years go by, and they shouldn't be viewed as set in stone. Times change. The 5 years cash or cash equivalent lets you weather bad times, and ensure you don't get hit by short term shocks. Allowing you to make longer term adjustments spread over 5 years if necessary

Hence if I had your portfolio, and was using for myself. I'd want approx:

1) 5 years cash or cash equivalents: = $120k (NB 5 x $ 24k is what you have enough for, not 5 x 30k under this model)

2) Remainder of $580k would generate approx $23k a year to live off at 4%, $12k for inflation @2% kept in portfolio, 1% or $6k buffer

There are a lot of other factors to consider, and you can vary amounts according to your risks and views. But for me the 5 years cash zero market risk (NB not same as zero risk) is key. It covers the foreseeable market downturns. You can always do the adjusting your expenditure up and down.

Other factors:

A) You're still talking in dollars. Expand the model above to address currency risk. Again the 5 year cash or cash equivalents should largely address this. You'll be living in Thailand you need THB assets. Sure the 1%-2% return on cash, or 3-5% on Thai govt bonds is poor. but there is no currency risk

I haven't included returns on cash or cash equivalents above. This is actually an additional sum you can factor in or consider a bonus. Remember interest rates go up and down. So in some years could be next to nothing anyway

C) Remember your cash in a bank account or bonds is not 100% safe. No market risk, but there are other risks, eg fraud, credit risk.. Spread it around. Similarly don't have all your equities in the same account. Frauds and bankruptcies happen. You can have a great portfolio, but if someone steals/loses it you're in big trouble.

D) "Stress test" the above. What happens if USD halves, inflation doubles etc. Your 5 years gives you time to adjust, but longer term shifts could happen. The above covers normal cycles, there's always that once in 30yrs event. Think and anticipate them.

Lastly the above is not for everyone. It also doesn't cover lifestyle issues. It only covers one financial model idea, on managing finances. It also lets people play around with what they are happy/comfortable with.

Summary:

= 5 years cash or cash equivalents + a roof over your head + portfolio yielding enough to live on (at say 4%) + inflation (2%) + buffer (1%) for years you get it wrong. All adjusted for currency risk + insurance, etc . Plus regularly do "what ifs", including the life changes, eg a wife, eg one kid could cost an extra $10k a year in school fees

I enjoy investing and finance, some people don't. I have a reasonable idea of what I'm good at, what risks I take and how often I get it wrong. To some the above would be more hassle than it's worth, and give more headaches than it solves. After all it's only dealing with the money issues, which are much easier in my view

I am very sorry but I also enjoy my investing but this reply still gives me a headache.

I follow the keep it simple, stupid mantra.

Earn a suitable return long term hence the 85% equities.

Withdraw a sustainable income in this case = dividend or below.

Maintain suficient low risk funds for liquidity. Perhaps a bit low in this case but my solution should be to increase the size of the overall portfolio not alter the asset allocation.

Anything more complicated than this does hurt my brain.

[ade]

As Guest House suggests taking a year out might be a good idea. I took a year or so out here in Thailand at one point. Went to university, learnt to read and write Thai, travelled the country, watched the World Cup, did a TEFL, and generally enjoyed life, etc with a view to what I wanted to do next. Helps focus life.

I also left Thailand a couple of years later, for about two of years, because after 7 years I felt I wanted to leave for a while. Don't underestimate you may feel the need for change. I'm very glad I did leave, work/visit other countries, and come back with a few different perspectives.

I also used to track my spending as a single guy. I don't bother so much now as a married guy and my wife tells me off if I spend too much. . In those years I experimented "just to see" and could live off THB 30k a month, staying in a one bed 5k a month place. The other extreme was probably spending 200k a month including sharing a large house for 90k rent between 2. That was on expat terms and still saving after the 200k. i.e around 7 times as much. I would say the enjoyment was not "7 times", but on the other hand, one was obviously preferred

To be honest, my happy medium was around the THB 100k mark as a single guy, doing all the things I wanted. That's now 150k being employed with a lovely wife and family. I'm not knocking the THB 30k a month life. I enjoyed it. It's just not for me long term in a city (maybe up country tho').

keep your options open. Travel around quite a bit in Thailand. Live in a few different places. It's very different to short trips and holidays. There's much nicer places than BKK and Pattaya. eg Chiang Mai, Hua Hin. Horses for course tho'

Unfortunately because of my career and personal circumstances taking a year out is not practical. I did not mention that I do get generous holidays and currently spend 9 weeks a year in Chiang mai.

Take your point about about being comfortable on THB 100K. Others have expressed similar sentiments.

[LivinLOS]

Nope rent included.. Tho I have just radically downsized thanks to a landslide destroying the old villa !!! But I really dont live the high life.. Simple guy with basic pleasures and dont have any nasty / expensive habits (any more).. As per the poster some way back I am much happier at this stage of my life saving the bulk of my investment returns and rolling them into the pot and keeping things pretty simple.

The one luxury I do really want and keep toying with the idea of is a sailboat.. Its just such a great spot of the world for it.. But as the old adage goes, if it flies floats or fuc_ks, rent it !!

I'm 100% in support of Kuhn K's thoughts on these matters and I support his expenditure estimates. I also know he will keep looking forward - but sailboat, hmmm.

I know sounds so decadent doesnt it !!

But I know its just one of those ideas that keeps popping up like a bad penny.. I didnt even splash out on a hobie cat when one was selling recently so what chance of me pulling the trigger one a proper toy ?? Slim at best.. We do have great conditions here on Phuket tho.

Gold at 2k might get me to tho

[ray08]

for the record:

the three sh*ttiest countries on this planet as far as taxes are concerned are Germany, Canada and Australia.

I agree with the Australia as too high in taxes Direct and Indirect and worse still topped off with a very Agressive ATO

and welfare state mentality

Back to original question , thb 60-70k a month , really in not much after , rent , car ,health insurance ,border runs and not even

counting a trip back home which might arise , not even taking into account if you indulge in wine-ing and dining being a single person,

Not on the smell of an oily rag , but not much room for a rainy day , unless you begin to eat into your capital

[pkrv]

Also a subject close to me (48 and 1/2). Although others have commented on a roof over your head, I note the OP did not say that he has excluded property from his 'capital'.

If no property he will have to buy or rent - one of the two. IMO renting over the long period (40 + year) would be catastropic, and I'm afraid any pension provision will not actually be that much, given he will (again IMO wisely) not actually be paying into it, he wil be retired.

Something that has not been talked about is the western concept of down sizing as a strategy i.e. selling up your home and buying a cheaper (not necessarilly smaller) property, then repeat as necessary.

Anyone tried this in Thailand?

Errr... has anyone factored in 40 years rent or are we just all taking out the big willy and showin it to all?

[bmanly]

I am 45 and considering my options regarding retirement. I hope to to retire in Pattaya or Chiang mai. I have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

Any self funded retirees happy to tell me if this a comfortable position from which to retire?

Bearing in mind I will have to pay for visa runs probably to Malaysia every 3 months.

Currently I have the option of working which obviously means I will have more assets if I retire at a later date.

Hello ade, I am a self funded retiree and have been so for 7 years. The amount of capital you have is more than enough to give yourself a comfortable life in Thailand even if you do end up married there. The only thing I question is why is your return so low on your investments? It works out at a 4.2% return. If you are an Australian please PM me and I will only be too happy to help you. I can't help you if you are from another country because I don't know their tax laws. There are some very good stocks in Australia right now that are giving you 6 to 7% fully franked dividends (means no tax to be paid).

I know guys who have been retired for 14 years, 8 years and 6 years who all live in Pattaya and all live very active lives and miss out on nothing. All of them have less than 700K. The true answers lie with the guys that are already doing it, 45 yo is not too young to retire. I've done it and others have done it, if your smart you can do it too. The only other thing I might add is that while all the sharemarket turmoil is on right now I would just work another 3 Months and put the money into the best blue chip dividend paying stock you can find, share prices are cheap right now. This will beef up your holdings and it's like putting cream on that proverbial cake, good luck.

[fletchsmile]

...

The current bear market has automatically prevented me from retiring imediately. Dividend income is currently as cheap as I have ever seen it. Building income and capital is the obvious imediate objective. A two or three year bear market followed by a bull market will suit me perfectly. I expect I will then be able to join all you fine chaps in the land of smiles.

I am very sorry but I also enjoy my investing but this reply still gives me a headache.

I follow the keep it simple, stupid mantra.

Earn a suitable return long term hence the 85% equities.

Withdraw a sustainable income in this case = dividend or below.

Maintain suficient low risk funds for liquidity. Perhaps a bit low in this case but my solution should be to increase the size of the overall portfolio not alter the asset allocation.

Anything more complicated than this does hurt my brain.

I also like the KISS mantra, but as you've shown it has its limitations. Consider tweaking your model, for some of the risks you overlooked, eg bear markets which cause havoc with many people's calculations. IMHO you have a good start, but perhaps a little too KISS. Consider:

1) Put a roof over your head in Thailand - buy at some point

2) Have enough cash/cash equivalents (mainly in THB) to last 5 years. This 5 years will let you ride out bear markets/market fluctuations, and adjust your thinking along the way. As well as address short-medium term currency risks. In your case take $120-150k out of your portolfio, put it largely in THB and estimate what returns the rest generates and are you happy to live off it

3) Plan to have 4 good years and 1 bad year on average on your portolio. Tuck away a buffer/reserve in the 4 good years, where it is safe, and draw on the reserve in the bad. 1% pa.a is conveniently simple

4) Have your investment portfolio. Mine is based on earning average total return of 7% p.a over 5 year periods, and taking 4%p.a out.

Again IMHO you perhaps only looked at step 4) where 85% equities is too high a weighting for you.

Your alternative as you say is build up a much bigger pot. At the end of the day the simpler your model, the bigger pot you'll need. The more advanced and accurate your model the smaller the pot.

The other KISS mantra you might want is : "if in doubt do nowt.." . You've obviously got doubts on your finances. Keep going till you don't.

Unfortunately because of my career and personal circumstances taking a year out is not practical. I did not mention that I do get generous holidays and currently spend 9 weeks a year in Chiang mai.

Take your point about about being comfortable on THB 100K. Others have expressed similar sentiments.

Not quite sure what you mean when saying taking a year out is not practical for your career. You can always take a career break and leave your current job. You just may not get another job, and the break may become permanent

For me, my company didn't offer a sabatical, = year out and then return to them. I simply gave up working for that company and took time out for myself. That depends on your confidence in getting another job. As someone else mentioned above age is a factor in that too. I did it in 30's. 40's is a little more difficult, and 50's probably very dangerous.

Edited January 24, 2008 by fletchsmile

[fletchsmile]

funny you should mention that Fletch . in fact i raised this concern only a couple of weeks ago with my banker (whom i know personally since nearly two decades) and was told if i apply enough pressure on him UBS could arrange for me to spread my cash with two or three other SG banks. they did that for a client in december albeit for a big shot who would consider my cash as pocket money. i am still thinking about it but

1. i'm not sure about the legal implications if UBS "arranges" the "spread" and got p*ssed off reading a dozen pages in legal lingo and another half a dozen pages of waivers which i would have to sign.

2. until recently i held cash in €UR, AUD, NZD, ISK and TRY on a weekly basis with stop losses and did a little in/out trading too. i won't be able to do that with the proposed different arrangement and i don't want to be handcuffed if opportunity knocks in these interesting times. nowadays i hold €UR only (besides some peanuts amounts in other currencies) but that applies today and i don't know whether it will apply tomorrow.

i can't ask my friends for advice because they are all fully invested and consider my stance as... i don't want to mention the expressions they use as far as my cash quota is concerned

what's your advice? that is a genuine question!

Naam

Apologies in advance if this sounds like Treasury 101 with some practical experience thrown in. Also has only minor relevance to OP, but anyway MHO on banking arrangements. Probably also a bit boring and dry topic to some

1. Not really an expert on legal matters, tho' have done enough law studies to be able to spot where I need help . Essentially you'd be swapping some credit risk/diversification for perhaps some extra legal risk. At least that's still reducing the likelihood of a total wipeout, so an improvement in my opinion. If there's legal paperwork that's a hassle to you and boring to read + headaches. In my experience, banks were usually better than me in writing agreements, anyway. You could get caught where something goes wrong and UBS as arranger simply blames the other bank and vice versa. Hassle and time.

I'd still say using a second and perhaps even a third bank in addition is a better option IMHO. I've done this in Treasury roles for companies, and found there's no major disadvantage of using 1 lead bank, and 1 or 2 smaller ones. Essentially it still comes down to transaction vs relationship banking, tho' as Thailand teaches: somewhere in the middle path is often best. Besides banks limit their large exposures to a single counterparty. No harm in the man on the street taking a leaf out of their book.

The lead bank is still happy to have the majority of your funds, and be the main bank. They know it and should still offer you their best rates or they know you can switch at a moments notice. You also make it clear that you will regularly review your arrangements, though appreciate the benefits of loyalty and continued quality service. The other 2 are also happy to have a foot in the door, tho' might get cheesed off for after a while.

Often you need to switch the 2 minor ones more regularly than the lead one, and churn the secondary banks for better rates. i.e relationship bank with the lead one. Transaction bank more with the secondaries. Anyway, keeps them all on their toes. Each competes for your business. Also makes switching banks quicker and easier if you see something you don't like. The accounts are already in place. Each also have strengths in different areas. No one bank is best at everything. If the time comes you need to switch your lead bank, you've already at least started contact and relationships elsewhere.

2. On the second bit. Many banks should offer similar services on currency portfolios, so shouldn't be a hassle.

As an alternative: Most people also have one currency they favour, eg USD, EUR etc. They hold a core balance in that currency which they rarely go below. So an alternative is open that currency only with the other 2 banks, and put part of your core balance in. Tell them they need to match rates from your lead bank or you move on. Use your lead bank for switching etc.

Again it's not uncommon for companies to use one bank for FX, one for money markets, one for bond trading etc. HNW Individuals can do likewise. Doesn't really work for the man on the street, but should for HNWI, who are sought after. All the banks will try and sell you the one stop shop idea. It's just rarely in your interests.

Personally I'd try and talk some of your friends/syndicate into the idea. Even if it's only 10 - 20% you move. If it all went pear shaped at least you'll have some left.

BTW All the above does minimize your credit/fraud risks. But doesn't fully eliminate systemic risk in banking, so make sure you keep Mrs Naam happy and she allows you to have a nice roof over your head. Keep letting her choose the curtains

Edited January 24, 2008 by fletchsmile

[ade]

Hello ade, I am a self funded retiree and have been so for 7 years. The only thing I question is why is your return so low on your investments? It works out at a 4.2% return.

I know guys who have been retired for 14 years, 8 years and 6 years who all live in Pattaya and all live very active lives and miss out on nothing. All of them have less than 700K.

I would just work another 3 Months and put the money into the best blue chip dividend paying stock you can find, share prices are cheap right now. This will beef up your holdings and it's like putting cream on that proverbial cake, good luck.

Thanks for the very informative reply.

As for the 4.2% income I am being deliberately cautious. I only mentioned only the dividend cash return which for your information is actually higher than the figure mentioned.

I have mentioned in a previous reply that dividend stocks are currently very cheap. so will fully agree with your thoughts to postpone my retirement. Thoungh I might be thinking in terms of years rather than months.

A bit chicken perhaps.

[ade]

[

Your alternative as you say is build up a much bigger pot. At the end of the day the simpler your model, the bigger pot you'll need. The more advanced and accurate your model the smaller the pot.

The other KISS mantra you might want is : "if in doubt do nowt.." . You've obviously got doubts on your finances. Keep going till you don't.

Not quite sure what you mean when saying taking a year out is not practical for your career. You can always take a career break and leave your current job. You just may not get another job, and the break may become permanent

Always an interesting reply

Being simple financially as you suggest is actually a luxury which I am lucky enough to be able to afford.

Again as you say if I leave my job I might not get another or certainly not another with the same pay and perks. Now imagine I am eating into my capital and I will be a poor old man. One risk I am not willing to take. I believe you have answered you own qyestion.

[fletchsmile]

Funny you should mention that Naam.

What would you put as the probability of default of UBS in a 5 year or 15 year time frame? It's not fully zero. Perhaps 0.0X% or 0.00X%? Reallistically it's a very very small risk of default, but it's still there. Maybe even the same odds as winning the UK lottery? The point is there's a lottery winner most weeks in the UK

funny you should mention that Fletch . in fact i raised this concern only a couple of weeks ago with my banker (whom i know personally since nearly two decades) and was told if i apply enough pressure on him UBS could arrange for me to spread my cash with two or three other SG banks. they did that for a client in december albeit for a big shot who would consider my cash as pocket money. i am still thinking about it but

...

what's your advice? that is a genuine question!

BTW I hope by SG you mean Singapore, and not Societe Generale

The $7.2bio loss from a rogue trader/fraud is a good reminder on spreading your assets a little, just in case.

[Naam]

The $7.2bio loss from a rogue trader/fraud is a good reminder on spreading your assets a little, just in case.

a valid point. but trust and corporate accounts makes that an extremely difficult task

[bombdefuzer]

I'd take a year off and consider your options.

Its a personal thing I know, but 45 years is far too early for retirement in my book.

Move on and do something else, yes, retire no.

Agree.

I tried retiring at 43. I found myself bored and spending too much time in the bars. I tried going to thai language school, traveling, and riding motorcycles around thailand. Although it was fun, I just needed some mental stimulation and challenges so I went back to work.

I still get back to bkk every 7 weeks for a 2 week stay and then return to work.

[poshthai]

As a rough guide,700,000 dollars invested at only 55 net will bring in approx 22,000 baht a week.Are some of you saying that you cannot live in most parts of Thailand with that income.ADE you can live a decent life over here with that money so dont listen to some of these budding tycoons.Many weeks you would not spend that once you have settled down so maybe a few thousand baht a month savings too,then a real good blowout.I dont think i could spend 22,000 baht and be any happier which is the crux of the matter,enough money to be Happy, AND I AM DELERIOUSLY HAPPY SPENDING LESS THAN 22,000 BAHT A WEEK.If you can overcome an early retirement go for it full speed.

[GuestHouse]

And the inflation rate in Thailand is ....... ?

[meom]

No idea about inflation. Myself I assume 5% a year and based on spending 30,000 baht/month I would require about 35 million baht savings to be able to retire at 45 and die at 75.

Since I'm 45 already and nowhere near 35 mil in savings I guess I have to work until at least 60 or something.

[johnnyk]

for the record:

the three sh*ttiest countries on this planet as far as taxes are concerned are Germany, Canada and Australia.

I agree with the Australia as too high in taxes Direct and Indirect and worse still topped off with a very Agressive ATO

and welfare state mentality

Back to original question , thb 60-70k a month , really in not much after , rent , car ,health insurance ,border runs and not even

counting a trip back home which might arise , not even taking into account if you indulge in wine-ing and dining being a single person,

Not on the smell of an oily rag , but not much room for a rainy day , unless you begin to eat into your capital

You should try France, Canada is a relative tax haven.

[lazeeboy]

I'd say it's marginal at best. the problem with retiring without a big enough nestegg is, you have to change how you invest. You can't any longer be looking to "growth", which is too volatile and risky for retirement. You have to invest safely and "not to lose", which can drastically limit expected returns. It's doable, but you may get married still at your age, may have children, etc.

Thanks for the reply for your infomation I do not intend to get married or change my life style. You will notice my investments pay an income of $30,000 this is not capital withdrawal. I am also due a pension at 60 and 65 but consider this to be too far away for imediate consideration. How big a nest egg or income will you recommend? my back of envelope figures suggest I will have 60,000 to 70,000 baht per month.

Inflation and exchange rates are an ever present risk of which I am aware.

you have enough money ,dont worry

[Chaimai]

Thanks for the reply for your infomation I do not intend to get married or change my life style. You will notice my investments pay an income of $30,000 this is not capital withdrawal. I am also due a pension at 60 and 65 but consider this to be too far away for imediate consideration. How big a nest egg or income will you recommend? my back of envelope figures suggest I will have 60,000 to 70,000 baht per month.

Inflation and exchange rates are an ever present risk of which I am aware.

The addition of the pension income (no figures mentioned) make it a financial "no brainer". You could even (although not great advice!) borrow any shortfall until retirement in the knowledge that the capital requirement will be less when the pension income kicks in.

At the risk of being accused of plagurism (or flattery) I think Nam's overriding comments were 100% spot on:-

"none of us is qualified to answer that question! it all depends on what lifestyle you expect to lead. the same goes for your question whether to retire or keep on working. if you retire and find out that you are (contrary to your expectations) living like a pauper when you are 50, well that's bad luck. you will say "i made a wrong decision". if you keep on working till 50, your capital has grown to 1 million dollars and you are diagnosed with terminal cancer you will say "<deleted>! how could i make such a stupid decision!"

Frankly, you could book your flight tomorrow and with prudent management comfortably see out the rest of your life.

The real question is non-financial - are you SURE you WANT to do this now

If you do, you are in a position where you can mentally commit to Thailand and come and test the water. If, after 6/9/12 months you find that financially (or emotionally) you are not ready then you can go back and earn some more money and reconsider your options.

Good luck.

[CaptHaddock]

Ade,

Are you still around? How reasonable does that 85% equity allocation seem to you now that the S&P is down 20% from its peak of last October? I hope by now you have a refined appreciation of the risks of the equity markets. And the US equities slide is by no means over. The folks who talk of a "safe" 7% return or a "safe" 4% withdrawal rate don't begin to appreciate the nature of market risk in my opinion, prticularly over the long term.

By the way, your plan to retire at 45 to Thailand struck me as risky, but not nearly as risky as an 85% equity allocation just as the US is coming into the biggest credit/housing/stocks bust in decades.

Capt Midnight

[glyph]

"myself , i got a thai wife and 2 children ... sadly enough, i am not even 40 years old ..."

Are you sad because you are young, or are you sad because you are saddled with a wife and 2 kids?

[ozsamurai]

The financials seem fine, but I would take a look again at some of the advise in the earlier posts, I retired at 36, been relatively bored ever since. Its not about the cash really although it does help, its about what you plan to do with your time out of the work environ. Take a few years off, see if you feel the same. My 2 cents worth....

[zorro1]

have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

If I had that kind of money, i would turn it all into cash and deposit to StGeorge Bank in Australia into "Direct Saver Account".

It would be about 780K A$, 7% interest rate would bring in 55,000K a year, 1.55 mil baht, or almost 130K baht per month. Minus 10% that they take as tax for non-resident citizens, still makes it nice money. Rate fluctuations have been 5.45 (the lowest I remember) and now 7%. If the income dropped to 100K a month it's still more than I would spend anyway.

For now, i need a few years of pushing the stone uphill, hope I get there before I am 55. In fact, with that kind of money I can live even better in tropical Queensland (Carns and around).

Good advice thats what I did

[Naam]

have total assets of $700,000 of that about 85% equities 12% bonds 3% cash. These pay an annual income of about $30,000.

If I had that kind of money, i would turn it all into cash and deposit to StGeorge Bank in Australia into "Direct Saver Account".

It would be about 780K A$, 7% interest rate would bring in 55,000K a year, 1.55 mil baht, or almost 130K baht per month. Minus 10% that they take as tax for non-resident citizens, still makes it nice money. Rate fluctuations have been 5.45 (the lowest I remember) and now 7%. If the income dropped to 100K a month it's still more than I would spend anyway.

For now, i need a few years of pushing the stone uphill, hope I get there before I am 55. In fact, with that kind of money I can live even better in tropical Queensland (Carns and around).

Good advice thats what I did

but why do you pay taxes? and why are you happy with 7%? e.g. on a 12month fixed deposit the rate should exceed 8%

Edited July 14, 2008 by Naam

[Briggsy]

You might think of getting out of those equities. You're very heavy in that sector. With the economy as it is, they may be worth a lot less in the future.

Monitor your monthly spending like a hawk at the beginning. You might be surprised how much you spend in Pattaya.

Don't burn your bridges as you may need to go back to your old life.

Don't buy any big ticket items in Thailand thinking you'll be able to get your money later. You probably won't.

Don't put property, cars etc in the names of Thai birds for convenience. They will consider them a gift whatever you say.

Apart from that, you can retire if you live relatively frugally.

[JimsKnight]

Just to add a personal note, I retired at 45 after working for a couple of years in Thailand. Now, three years later, I find my brain under-challenged. I've just signed up for a Masters Degree by distance learning. This is very expensive (by Thai standards). You too might find that living a relatively comfortable but cheap life isn't enough for you for the next 50 years or so, and that to retain your sanity you have some unexpected expenses.

This is wisdom, keep yourself occupied and mixing with good dudes, find some work or a good hobby and you'll have a whale of a time