Retirement Plan Advice Needed

[Naam]

I know some guys who are on lower incomes who are saving $300 a month into offshore savings plans, looking at 8-12% return

Can you post a pointer to one or two of these schemes?

Sure, I will find out the bank or institution they are saving with. Think they are based Isle of Man or one of the offshore areas off the UK

i hope that nobody holds his/her breath till you come up with the promised information

p.s. a lot of people "look at" 8-12% returns. to look at them is easy, to achieve them is quite difficult.

[chiangmaibruce]

Wow, where to start? You need to hit this problem from several directions at once - there is no one fix (let alone an easy fix) ...

1. bring up your level of general knowledge about personal financial management, budgeting, etc. There are loads of self-help books available and heaps of info here free online. Just choose one or two books and read them, take notes. This will get you on the same page as people offering advice, and the other more specific advice you might read online

2. look to ways to increase income - you will almost certainly have to leave thailand to do that. see where the demand is (read widely) and do the necessary training to get a foot in the door. It may not be the dream job, it may not be an area in which you are greatly interested. focus on the longer term and bigger picture

3. change your lifestyle. sorry, but no way around this. you are probably going to be working longer hours and you WILL be spending less money on yourself. this may even mean mixing with different people, going

without things that you are used to, getting up earlier, errggghh. forget about buying new - become the second-hand king. forget about buying stuff you just want, but don't NEED.

4. get disciplined, especially with savings. if you aren't disciplined then lock it into investments that you must pay into regularly and can't extract the money from. for some people a mortgage works well. remove all debt from your life and avoid - unless it is the sort of debt which will come back with a return (e.g. margin loan to invest in shares)

5. seek out good advice, for e.g. a good accountant to make sure you you get all the tax breaks you are eligible for etc etc.

if it sounds like shock treatment then maybe it's what's needed - at least until you get into a new groove and start making progress with your plan. maybe then you can lighten up a bit into some sort of happy medium approach, but save the rewards for further down the line.

good luck

[flying]

p.s. a lot of people "look at" 8-12% returns. to look at them is easy, to achieve them is quite difficult.

Oh great now look you made me spit beer on my monitor

[Naam]

p.s. a lot of people "look at" 8-12% returns. to look at them is easy, to achieve them is quite difficult.

Oh great now look you made me spit beer on my monitor

that calls for an explanation Flying. details please! did you spit the beer on your monitor

-in disgust because you thought of the poor clowns for whom Madoff "made" 12%?

-roaring with laughter because of the jokes some xxxx xxxxxx present in Thaivisa?

[flying]

p.s. a lot of people "look at" 8-12% returns. to look at them is easy, to achieve them is quite difficult.

Oh great now look you made me spit beer on my monitor

that calls for an explanation Flying. details please! did you spit the beer on your monitor

-in disgust because you thought of the poor clowns for whom Madoff "made" 12%?

-roaring with laughter because of the jokes some xxxx xxxxxx present in Thaivisa?

That would be answer #2 sir & your lucky it didnt come out my nose then my keyboard would be kaput

Ok goodnight I'm off to dream of such returns

[xylophone]

888.......some good advice, however it is my belief you will need to earn more starting asap.

You must be good at something, so make a list of those things that you are good at, no more than 5 key areas, then seek a way to be able to put those skills to use.

For example if you are a handyman of any sort, what is to stop you going back to the USA/country of origin and with the help of family and/or friends look to buy a "distressed" property that is in need of renovation and set to work doing it up to put back on the market.

What about something simple like starting a small business such as looking after gardens, call it something like "Garden Rescue", build it up, and franchise it later on.

There has to be something which you are good at and which is of interest to you, which will enable you to increase your income or use as a foundation upon which to make a fortune.

Without something like that you will be struggling, irrespective of how many years you have left.

Nothing is impossible (or should I say impossible is nothing??)....... I started off as an apprentice earning US$4.00 a week, and ended up running the Investment Division of a bank.

The main thing is you have to want to do it, and it will not be easy, therefore best to pick something which you are good at and which you enjoy, because you may be in it for many years. Good luck.

[aussiebebe]

Assuming the OP is a genuine guy/girl with genuine needs: They seem to be saying that they earn 35,000 Thai Baht a month and are happy to live in Thailand. The OP's retirement plan must include:

1) becoming fluent in Thai

2) remaining single or marrying 'up'

3) saving 20% of income (if they are happy with present standard of living and income, they'll have enough).

If someone really is living in the way the OP claims, they could save enough in this fashion. I would guess that they would remain a renter forever, never buy cars, rarely visit home, and work until they are at least 70.

Open Question:

Supposing that the OP could save 7,000baht per month - how would such a sum be saved? It's one question that mystifies me more than any other Thai banks pay no interest, would others care to explain their strategies?

[CaptainNemo]

I'm guessing you're American, which I'm aware can make life tougher than for us socialist Brits!

If you are American, from my limited knowledge, your best bet might be to join the military... (try the blue ones for less chance of getting deadded?!)... I'm pretty sure they'll train you and qualify you in something useful in return for all the squarebashing...

hahahah yes the Brits will do just fine this year I'm sure. Trust me this is one mess all the white boys will feel this equally

Depends what sector you're in old bean... and anyway, i was hinting at the well-known fact that we don't have to worry about health insurance, pensions, and funding education to quite the same extent as many Americans reputedly do (not that I'm saying it's brilliant what we get, but aught's better than naught).

Sounds to me that the OP has just woken up in a cold sweat and realised the holiday might be over... at least he can be relieved he's cottoned on to this in his 30s rather than in his 40s... otherwise it could be much, much, worse.

Sounds to me like he's going to have to leave Thailand for about 10 years or more to sort out a career, and maybe some options might emerge before retirement.

I suppose you could always try and do a "B.Ed" in maths or physics and try to get hired as a proper teacher [that's about a 5 year plan...]; or, run away to sea... more training though. Anything else and you are competing with people with either more experience or more youth than you I reckon, which can be tough even if you can match their qualifications.

This sort of stuff should be obvious to most people by the time they're 33 though... I wonder what he's been up to since he first landed in BKK?

[888]

very interesting posts, but it seems that the majority thinks i should go back home... maybe i can find something here though - it's not like i was looking into it.

To answer some of the questions: I am not a girl - so marrying "up" ain't an option for me i think. I am fluent in spoken and written Thai, and can speak a couple of other languages, but not aisian though...

i think i would give myself a few months to look for something around here first, and if fail to find something appropriate - just pack my stuff (luckily not much is there).

Now the question is: how much do you think will be enough for me to save a month? Is there some kind of "standard" to which i can sort of refer?

[hhgz]

"maybe i can find something here though - it's not like i was looking into it."

Since you don't want to leave Thailand, that's a big problem, and is indicative of why you are in your current situation. It's good to know that you are fluent in Thai. Do you believe that alone will make you wealthy.

"how much do you think will be enough for me to save a month?"

Another incredible question, 888 and, again, it clarifies why you are where you are financially. I'm not sure what you think it takes to become "successful", and "financially independent". I would like to give you a hint. It's a lot more difficult than donning a turban, crossing your arms, and nodding your head. Without a serious change, the rest of your life will be absolutely brutal.

[xylophone]

very interesting posts, but it seems that the majority thinks i should go back home... maybe i can find something here though - it's not like i was looking into it.

To answer some of the questions: I am not a girl - so marrying "up" ain't an option for me i think. I am fluent in spoken and written Thai, and can speak a couple of other languages, but not aisian though...

i think i would give myself a few months to look for something around here first, and if fail to find something appropriate - just pack my stuff (luckily not much is there).

Now the question is: how much do you think will be enough for me to save a month? Is there some kind of "standard" to which i can sort of refer?

Look at this website from NZ..........has all you need to understand and plan. www.sorted.org.nz

Edited September 5, 2009 by Philnz

[Jingthing]

Retirement is a relatively modern concept. Still in this day I reckon the vast majority of people in this world work until they drop. That's an option. Do you think the masses making 1 or 2 dollars a day have a retirement plan? Also, not waking up to reality until your 30's is quite common.

Edited September 5, 2009 by Jingthing

[CaptHaddock]

The problem is as follows:

I am 33 y.o. expat living in Thailand and really not wanting to go anywhere else in the future. So far I have lived my life pretty much on a day to day basis, which now can be summed up like this: savings - 0, investments - 0, assets - 0.

I currently hold a job that pays about 1,000 US a month

Congratulations, you have now correctly identified the biggest problem in modern life--how to pay for retirement. Retirement is the most expensive purchase you will make in your life (i.e. paying for living expenses for 30 or 35 years with no labor income). It's difficult to arrange, but possible to do. But you have to work at it and make decisions that enable an eventual retirement. I had neither career nor academic degrees at age 30, but have been able to prepare for a retirement in a year or two (aged 60 now with bachelor's and master's degrees.) But I did it in the US where I worked pretty hard and had some luck. I would imagine the chances of doing so in Thailand to be fairly low, but I don't know from experience.

The main point is that your chances of success are vastly increased by having a plan to fund retirement. And while retirement is indeed a recent invention that is not to imply that it is necessarily optional. Here in the US 40% of retirements are involuntary, mostly due to loss of job or health problems.

There are several important points to keep in mind:

1. when you are young the most important component is your savings rate. By saving a substantial portion of your income you build up investment seed money that can provide you with income later in life to replace labor earnings. When you are older your rate of saving becomes much less important than the rate of return on your investment. How much to save when your young? I don't have a formula, but my minimum estimate would be 15%, although 25% gives you a much better shot if you can manage it. I usually was able to save more than 25% during my career.

2. you need to become knowledgeable about managing your household finances. That means paying attention to such basics as always living below your means so that you can save and never paying interest on credit card debt. You can look for books by Jane Bryant Quinn on managing your household money. Even if they are older books most of it still applies.

3. As you accumulate seed money for investments you need to educate yourself about investing by reading books. You simply can't turn your money over to someone else. Here is a good website including some very knowledgeable investors: www.diehards.org. I don't think they have the last word in investing, but they are way above the average. They will educate you to the importance of paying attention to the costs of mutual funds, for example. I myself wouldn't invest in Thai stocks or anything else in Thailand for that matter. If you are an American you should be able to arrange access to American investment products, although it's not trivial for an expat.

Most of my friends and family who can expect a comfortable retirement achieved that by being successful in careers that pay well, by not getting divorced, by living below their means, and by avoiding stupid expenses such as credit card debt and extra automobiles. On the other hand, I do know a few who have managed it just by marrying well, or hitting some kind of jackpot that they never have foreseen, such as winning a lawsuit. The rest are struggling and will have a difficult time in old age.

[aussiebebe]

I thought the post by CaptHaddock was excellent; it does answer 888's question;

"how much do you think will be enough for me to save a month?"

Another incredible question, 888 and, again, it clarifies why you are where you are financially. I'm not sure what you think it takes to become "successful", and "financially independent". I would like to give you a hint. It's a lot more difficult than donning a turban, crossing your arms, and nodding your head. Without a serious change, the rest of your life will be absolutely brutal.

Every pension has an annual management fee and is only a 'projection' based on an estimated rate of inflation; if 888 really is happy living in Thailand on his current income, there's no need to suggest his life 'will be absolutely brutal' - maybe only for someone accustomed to more. For 888 to secure a pension of half of his current income when he retires at age 65, he'll need to save, at least 30% of his present income. If he leaves it until he's 40, he'll need to save over 40% to achieve the same effect. This is just a guess assuming 3% average inflation, and that his pension grows by 6% annually (this isn't guaranteed) and that he pays a typical average management fee of 1%. No one can predict the future.

If 888 is happy living from 700 dollars per month in Thailand now, and can put aside 300 dollars per month, consistently, then he can retire aged 65 with a projected monthly income of the future-equivalent of 500 dollars per month (i think around 1,500 dollars in 2045). It's all relative and depends on his required standard of living, which as I noted before, will probably need to border on spartan-like frugality in most people's eyes. As he's fluent in Thai, he'll have a great life here and it's not for others to judge. I agree with VIBE on that aspect.

I also admire the realism of Jingthing's post; if you could take 100 university graduates and predict where they would be in 40 years time, 1% will be rich, 30% will be living on hand-outs, and at least 30% will have passed away. Everyone thinks they are going to sail into their 90s but so few of us will.

I also appreciate Jingthing's assessment of retirement; its a concept misrepresented as 'better than work' when in fact more and more professionals continue to work into retirement. There's got to be more than just teeing up the next golf ball and many notable people have accomplished their best work in what should have been their retirement years; the British guy Richard Attenborough, or the American Warren Buffet, for example.

[Jamie]

888,

You need to come back to the US asap. If you don't have an education or some type of trade, you need to look at that. Not to say you can't find a good paying job without, but having a skill or degree definitely increases your chances.

If you are lucky enough, you can land a job with a company that has a 401K which will match what you put in dollar for dollar up to a certain percent. You also need a job that offers decent health insurance. If you don't have health insurance now, well don't think you will remain young and healthy for ever. Get sick once and land yourself in a hospital for an extended time and kiss any savings you may have good bye.

I suggest you look online at various retirement calculators. They leave out a lot of variables, but this will give you an idea of what you need to put away month after month to retire with X amount of money.

[pkrv]

"... I am not a teacher - nor in leisure." Well, what are you in? Maybe you should use a keen eye to see what opportunities you might uncover with something you do, as of today, know about here in Thailand. Think ahead to when the economy picks up. Sometimes opportunities present themselves today because those already invested are having tough times.

You may have more going for yourself than you realize and it is not the current salary that is important; just that you are working in Thailand right now which puts you ahead of many.

Interesting comment he appears to have a work permit.

888 do you have/had a Thai partner? That makes a difference.

[WhiteShrek]

Might I humbly suggest your first investment be 3,000 baht for a vasectomy... I'm only thinking of your future, any potential partner... and well to be honest society at large.