Never Invest In Thailand More Than You Can Afford To Lose

[scotwumman]

Show off! but you make great posts

[Heng]

Um... hey bebby what's your sign? I'm a Pisces.

[OlRedEyes]

Interesting conversation, fascinating to see such diverse thought processes.

As one of the strongest proponents of the RULE... Never invest more in Thailand than you can walk away from. I feel called on to justify that position.

First, let me be very clear, its not really my position or something I came up with. In a past life, I used to be hired to go in a fix sick companies. Early on, it becomes pretty apparent that the transition from a healthy vibrant company into a sick company has to do with management. Duh.... So if you are under a gun, which we were, you go back to the last management that worked and LISTEN carefully. Successful old timers know the ropes, they know the market, they know how to make it work. They can also see easily and clearly what went wrong. They are not always right, or even clear, but with a little patience you can get a huge jump in the experience factor and reduce mistakes out of the gate.

So when I came to Thailand as a raw newbie, the old habit of learning the traps and tricks quickly caused me to search out old timers here. Honestly, anyone with less than ten years here and not completely fluent in Thai is not worth listening to, at best confusing, at worst plain wrong. One of the things that I heard from them over and over is "NEVER INVEST MORE THAN YOU CAN AFFORD TO WALK AWAY FROM". Almost every one of them let slip that jewel during my education.

It surprised me, like some here I wanted to argue with the premise. Over the years, I began to understand what they are alluding to. It has nothing to do with "investing in a condo" or "investing in a gogo bar" and everything to do with the rule of law and our status here. Our legal protections, our ability to protect ourselves and our interests.

There is the heart of the issue. Not only an investment of money, the investment of our time effort and heart.

Why? Over the years I have come to believe that there is no real rule of law here. No protection other than money and connections. No one goes to the police or courts for help or justice, if they do then they are sadly disappointed. As foreigners, we have even less protection than the Thais who enjoy slightly less than no protection.

There are a million examples, every day, every hour. If you want a few I remember off the top of my head there is poor Bill Monson who funded Thaksins first cellphone business and provided the equipment. After Thaksin simply stiffed him he tried for decades to bring the case to court. Poor Bill never got his day, Thaksin never showed up and the court refused to hear the case without a defendant. Last year the statute of limitations ran out and our multimillionaire buddy learned the RULE the hard way.

Or the poor monk that bought the land in front of his temple for 10 million baht only to find out the lady who managed it and the Land Department employees (her daughter) who gave him the clear deed docs were bogus.

We could go on with these horror stories for months. Is it us? No, none of the erudite posters on Thaivisa. But..... Think about investing in any third world country without the rule of law. With no protections, theft and fraud rule the day. Would you invest in Nigeria? No, why not? Then why would Thailand be any safer? Because the generals have nicer uniforms?

No, as westerners we assume rights and protections that don't exist anywhere except in the west and a few countries that got the hang of it. That assumption is deadly and can culminate on a high balcony in Pattaya if we are not forewarned.

The beauty of the RULE is that it fits all of us. Those with money to smoke are fully justified in investing whatever they want, and a few are very successful in that endeavor. If I were to guess, the probabilities are that fewer are successful here than in their home country where they know all the rules and have the contacts, but thats just a guess.

I think (now) that common sense should tell us to be careful. Its a different culture, a different way of doing things. At best we are a guest here at the whim of bureaucrat somewhere. That could change momentarily as most things here do, and seldom for the better.

In my way of thinking, these style of boards are for the dissemination of experience and practical wisdom. People here have helped me do everything from get a drivers license to importing motorcycles on a pretty large scale. The least we can do is pass some of our experience on to newbies reading this board. Would anyone here with good conscience tell the new immigrant to bring and invest everything here. I doubt it. At best we might tell them Jai Yen, get the lay of the land, learn your limitations before burning bridges. To do otherwise is in my opinion highly disingenuous.

I believe it is a RULE, and it applies to any place that is ruled with corruption or brute force. I have a tendency to lose in those battles when faced with those parameters, I think most of the people reading this are in the same boat. So, Russia or Nigeria, Indonesia or Thailand, China or Saudi Arabia, that rule helps us remember that we are not natives and without even the most basic of rights and legal protection. We are instead at the mercy of a chaotic and violent society and should act with extreme diligence. Its still a lovely place to live, just be extra aware and vigilant because even the simplest assumptions can cause us great distress (such as looking left when stepping off a curb).

Argue all you want, hide from the reality if it makes your world more comfortable, but dont do a disservice to those naive and fresh off the boat.

Excellent post.

[astral]

Can't be bothered to vote, but I don't know why we need to add the word 'Thailand' to the phrase.

Surely you should never invest more than you can afford to lose in any environment or country?

This sage advice was offered to me by an old friend, when I first decided to buy a house in Thailand.

I always include the word Thailand, because this forum is about Thailand, however Bendix is right

to say that it can be applied in many situations.

People often come to Thailand with rose tinted spectacles, hoping to buy a small business or property,

and over the years I have seen people get their fingers burnt in such transactions, for many reasons.

For example.

Exchange rate fluctuations. 1986 there were 35baht to the UK pound, in 1997 that rose to 90 baht

and now sits around 60-70baht. When you buy and sell can make a tremendous difference.

Businesses can go bust.

The nice little estate where you live, can have a big industrial complex built behind it, a few years after you move in,

or the neighbours from hel_l move in nextdoor.

Wives/girlfriends/boyfriends make life impossible.

Government regulations on ownership and visa may change.

[scotwumman]

To xbusman

I agree an excellent post. What can be done to advise the people considering settling in Thailand when they do not have access e.g. to Thai Visa for information. I know it took me many years of short visits to form an opinion on the reality of living full time or investing in Thailand.

I don't know how that knowledge can be imparted to those people, the ones prepared to listen anyway. Warnings from travel agents are not an option in lots of cases as most people I know anyway are independent travellers.

[calmichael]

Interesting conversation, fascinating to see such diverse thought processes.

As one of the strongest proponents of the RULE... Never invest more in Thailand than you can walk away from. I feel called on to justify that position.

First, let me be very clear, its not really my position or something I came up with. In a past life, I used to be hired to go in a fix sick companies. Early on, it becomes pretty apparent that the transition from a healthy vibrant company into a sick company has to do with management. Duh.... So if you are under a gun, which we were, you go back to the last management that worked and LISTEN carefully. Successful old timers know the ropes, they know the market, they know how to make it work. They can also see easily and clearly what went wrong. They are not always right, or even clear, but with a little patience you can get a huge jump in the experience factor and reduce mistakes out of the gate.

So when I came to Thailand as a raw newbie, the old habit of learning the traps and tricks quickly caused me to search out old timers here. Honestly, anyone with less than ten years here and not completely fluent in Thai is not worth listening to, at best confusing, at worst plain wrong. One of the things that I heard from them over and over is "NEVER INVEST MORE THAN YOU CAN AFFORD TO WALK AWAY FROM". Almost every one of them let slip that jewel during my education.

It surprised me, like some here I wanted to argue with the premise. Over the years, I began to understand what they are alluding to. It has nothing to do with "investing in a condo" or "investing in a gogo bar" and everything to do with the rule of law and our status here. Our legal protections, our ability to protect ourselves and our interests.

There is the heart of the issue. Not only an investment of money, the investment of our time effort and heart.

Why? Over the years I have come to believe that there is no real rule of law here. No protection other than money and connections. No one goes to the police or courts for help or justice, if they do then they are sadly disappointed. As foreigners, we have even less protection than the Thais who enjoy slightly less than no protection.

There are a million examples, every day, every hour. If you want a few I remember off the top of my head there is poor Bill Monson who funded Thaksins first cellphone business and provided the equipment. After Thaksin simply stiffed him he tried for decades to bring the case to court. Poor Bill never got his day, Thaksin never showed up and the court refused to hear the case without a defendant. Last year the statute of limitations ran out and our multimillionaire buddy learned the RULE the hard way.

Or the poor monk that bought the land in front of his temple for 10 million baht only to find out the lady who managed it and the Land Department employees (her daughter) who gave him the clear deed docs were bogus.

We could go on with these horror stories for months. Is it us? No, none of the erudite posters on Thaivisa. But..... Think about investing in any third world country without the rule of law. With no protections, theft and fraud rule the day. Would you invest in Nigeria? No, why not? Then why would Thailand be any safer? Because the generals have nicer uniforms?

No, as westerners we assume rights and protections that don't exist anywhere except in the west and a few countries that got the hang of it. That assumption is deadly and can culminate on a high balcony in Pattaya if we are not forewarned.

The beauty of the RULE is that it fits all of us. Those with money to smoke are fully justified in investing whatever they want, and a few are very successful in that endeavor. If I were to guess, the probabilities are that fewer are successful here than in their home country where they know all the rules and have the contacts, but thats just a guess.

I think (now) that common sense should tell us to be careful. Its a different culture, a different way of doing things. At best we are a guest here at the whim of bureaucrat somewhere. That could change momentarily as most things here do, and seldom for the better.

In my way of thinking, these style of boards are for the dissemination of experience and practical wisdom. People here have helped me do everything from get a drivers license to importing motorcycles on a pretty large scale. The least we can do is pass some of our experience on to newbies reading this board. Would anyone here with good conscience tell the new immigrant to bring and invest everything here. I doubt it. At best we might tell them Jai Yen, get the lay of the land, learn your limitations before burning bridges. To do otherwise is in my opinion highly disingenuous.

I believe it is a RULE, and it applies to any place that is ruled with corruption or brute force. I have a tendency to lose in those battles when faced with those parameters, I think most of the people reading this are in the same boat. So, Russia or Nigeria, Indonesia or Thailand, China or Saudi Arabia, that rule helps us remember that we are not natives and without even the most basic of rights and legal protection. We are instead at the mercy of a chaotic and violent society and should act with extreme diligence. Its still a lovely place to live, just be extra aware and vigilant because even the simplest assumptions can cause us great distress (such as looking left when stepping off a curb).

Argue all you want, hide from the reality if it makes your world more comfortable, but dont do a disservice to those naive and fresh off the boat.

Excellent - excellent - excellent.

My first trip to Thailand, I met an old - old timer in Bangkok. In the USA this guy was a highly respected tenured professor and businessman. His advice to me, in the chairs at the Nana hotel, was: "In Thailand, be it women or property -always be a renter, never a buyer" Very good advice from a man that knew how the world worked.

[Naam]

As one of the strongest proponents of the RULE... Never invest more in Thailand than you can walk away from. I feel called on to justify that position.

yawwwwnnnn... i feel called on that my claim "2 plus 2 equals 4" is justified.

next please!

[Edonista]

Excellent - excellent - excellent.

My first trip to Thailand, I met an old - old timer in Bangkok. In the USA this guy was a highly respected tenured professor and businessman. His advice to me, in the chairs at the Nana hotel, was: "In Thailand, be it women or property -always be a renter, never a buyer" Very good advice from a man that knew how the world worked.

Bullshit,bullshit,bullshit.

Just here in View Talay I know many farangs who own many condo units and cash a good income renting them out, plus enjoying a 100% increase in value in the latest five years.

I bought just the unit I live in, paid it 700,000 baht in Dec 2003 , now it's worth 1,400,000 and saved approximately 400,000 baht in rent.

But if you prefer to follow the advice of your "highly respected tenured professor and businessman"....well, up to you.

[Edonista]

Surely you should never invest more than you can afford to lose in any environment or country?

You mean you should not buy Treasury Bonds because USA could possibly default ?

The reality is we have to invest more than we can afford to lose (actually , we have to invest everything we own if we want all our capital to work for us), but of course we must be careful in picking our investments , best defense being diversification.

[jasreeve17]

Excellent - excellent - excellent.

My first trip to Thailand, I met an old - old timer in Bangkok. In the USA this guy was a highly respected tenured professor and businessman. His advice to me, in the chairs at the Nana hotel, was: "In Thailand, be it women or property -always be a renter, never a buyer" Very good advice from a man that knew how the world worked.

Bullshit,bullshit,bullshit.

Just here in View Talay I know many farangs who own many condo units and cash a good income renting them out, plus enjoying a 100% increase in value in the latest five years.

I bought just the unit I live in, paid it 700,000 baht in Dec 2003 , now it's worth 1,400,000 and saved approximately 400,000 baht in rent.

But if you prefer to follow the advice of your "highly respected tenured professor and businessman"....well, up to you.

The fact that you're in minority ownership (by law), and that the majority owners (Thais) have different rules, laws, ethnics, ideas, etc, is a huge potential problem. It's additional risk that you just don't need.

Owning a condo, and sitting on the committee, I've found the yocals are a nightmare. No interest in mid / long term benefits to all apartment owners, only interested in short term financial benefits to themselves. Add to this two or three big mouth bullies that buy up a few condos and have 'connections'... It's always a problem. You can literally see these bastardoses systematically ruining the place day by day.

Some (many?) foreigners benefit from buying condos here, and good luck to them. However, if your 'Thai colateral' is a major part of your portfolio then you're a fool, in my opinion. This country has fuked over many foreigners from the top (Mr T) to the bottom (Mr Somchai) and will continue to do so til kingdom come...

Edited June 9, 2008 by jasreeve17

[Heng]

Amen.

[jasreeve17]

Amen.

One day Heng, when the shoe's on the other foot...

[Heng]

Someone will buff it to a perfect shine like the other one?