If You Had 25m Baht How Would You Invest It?

[Abrak]

Have you ever considered speaking to a professional investment advisor, rather than a bunch of strangers on the internet?

Well asking people on the internet may be of time but I find investment advisors a waste of time and money.

In fact my suggestion that he invest in stocks is based on the assumption that learning how to invest in value (if he doesnt already know how to) is very simple compared to running your own business. If you need an investment advisor to do it for you, you probably shouldnt be investing in the first place.

[neverdie]

"I do not wish to work, just invest it somehow that will bring in enough each month to live, maybe 100k or so, i'm mainly concerned with longterm growth of the original investment."

Have you ever considered speaking to a professional investment advisor, rather than a bunch of strangers on the internet?

Theres nothing wrong with chewing the fat with various stangers over this issue, why would there be?

Clearly, if the OP is truthful in what he has stated, then hes no fool and will explore various options & most likely do what you suggest.

OP Pity your money is in Thai baht & thank god mine is not

Edited November 1, 2009 by neverdie

[Abrak]

Op, dont worry too much about the baht thing. Almost by definition is you have a current surplus of 9% and the central banks is intervening to prevent appreciation to the extent that it has already increased forex reserves by almost 10% of GDP so far this year, you will be bloody unlucky if the currency depreciates.

Infact given you live in Thailand (I assume) so your liabilities are in baht, I would have thought it pretty risky to go punt another currency.

[bendix]

I love these kind of threads. It's classic blind leading the blind stuff. Buy shares. No, don't buy shares, they're rubbish. Live on dividends. No, dividends are crap. Gold is the thing - no it isn't . . . gold is rubbish. Blah blah blah.

With the exception of the OP, I know of only one poster on this thread who currently lives on investments. I would be inclined to pay more attention to him . .

I have some sympathy for the OP. 25 million at 32 is a lot, but not quite enough, particularly for a young guy with a family. If he was twenty years old and single, it might be enough. If it was 15 million extra it would be enough for him now.

As it is, he tends to fall between two stools.

[sokal]

reason: TV-member Sokal who claims he "is from the Austrian School", says fiat money is all shit², only gold is the real thing. but then he turns around and airs intentions to buy SET stocks (once they are cheaper) and advises others to invest in stocks because : "dividends adjust for inflation"]. what he must have also learned is calling anybody, who does not perform according to his liking, e.g. Bernanke, Geithner et al, idiots and reserves for TV-members the finer titles such as "son of a bitch" and "sucker".

All that I was saying is that in normal times you do not need to worry about inflation cutting into your dividends. In fact, dividends have three protections from inflation, raising dividends and stock price appreciation and stock splits.

These are not normal times and if they where I would dump all my gold and buy solid dividend paying stocks like Shell and Phillip Morris.

[sokal]

I love these kind of threads. It's classic blind leading the blind stuff. Buy shares. No, don't buy shares, they're rubbish. Live on dividends. No, dividends are crap. Gold is the thing - no it isn't . . . gold is rubbish. Blah blah blah.

With the exception of the OP, I know of only one poster on this thread who currently lives on investments. I would be inclined to pay more attention to him . .

I have some sympathy for the OP. 25 million at 32 is a lot, but not quite enough, particularly for a young guy with a family. If he was twenty years old and single, it might be enough. If it was 15 million extra it would be enough for him now.

As it is, he tends to fall between two stools.

I love these kind of threads. It's classic blind leading the blind stuff. Buy shares. No, don't buy shares, they're rubbish. Live on dividends. No, dividends are crap. Gold is the thing - no it isn't . . . gold is rubbish, then a guy says that 25million is not enough to live on, blah blah blah

[changnaam]

I love these kind of threads. It's classic blind leading the blind stuff. Buy shares. No, don't buy shares, they're rubbish. Live on dividends. No, dividends are crap. Gold is the thing - no it isn't . . . gold is rubbish. Blah blah blah.

With the exception of the OP, I know of only one poster on this thread who currently lives on investments. I would be inclined to pay more attention to him . .

I have some sympathy for the OP. 25 million at 32 is a lot, but not quite enough, particularly for a young guy with a family. If he was twenty years old and single, it might be enough. If it was 15 million extra it would be enough for him now.

As it is, he tends to fall between two stools.

I love these kind of threads. It's classic blind leading the blind stuff. Buy shares. No, don't buy shares, they're rubbish. Live on dividends. No, dividends are crap. Gold is the thing - no it isn't . . . gold is rubbish, then a guy says that 25million is not enough to live on, blah blah blah

The OP states that he has THB25 Million and wants to enjoy THB 100,000 per month as well as capital growth to combat inflation. I would totally agree that THB25 million is not enough unless you start talking about increasing the risk but then you want the capital guaranteed??

The 100k per month (or THB1.2 million a year) is 5% straight off so where will the capital growth come from??

[Abrak]

The OP states that he has THB25 Million and wants to enjoy THB 100,000 per month as well as capital growth to combat inflation. I would totally agree that THB25 million is not enough unless you start talking about increasing the risk but then you want the capital guaranteed??

The 100k per month (or THB1.2 million a year) is 5% straight off so where will the capital growth come from??

I agree. The average Thai wage increases by about 4% a year so he needs a 9% return to generate a Bt100,000 that rises at the same rate as the average Thai. Now personally I think this is easily achievable with investments but only if you are prepared to do the work necessary to make above average returns. You will be lucky to achieve this from passive investing. You will receive excess returns if you put in a lot of work doing your research. Unfortunately with just assets of Bt25m the reward for your work could easily equate to being less than you have got from doing the same amount of work and being paid. There really is no such thing as a free lunch and with investment advisors you pay for their lunch everyday and often dont get much in return.

Bt25m is enough to live on if you come here aged 65.

[tingtong]

I think it is lots of money, and if you invest wisely, it should be just great.

Being your age around, having a kid of my own, and not looking to leave Thailand. ( only not having 1/10th of this money) here is what i would do:

1. dont work. there is much more to life if you can afford it. It is enough if your money work for you.

2. look into buying your place instead of renting. May you find that it would indeed save you 5-6% a yr ( which already not bad, very low risk) with the chance that your piece of real estate will increase in value. Of course no point to own an extravagant place, stay within your means.

3. diversify. whatever you choose to invest, make sure you pick multiple ways, and that they dont relate too each very highly. I would also go for REITs or Property Funds as they call them in Thailand, with less headache and about the same return as owning a real estate. Currently Thai real estate funds pay about 7-10%, dividend paid quarterly often, making your pallning more flaxible. they trade on SET.

I would definately include a higher %age of stocks, probably a larger portion on passive index funds. The reason that they have a lot less fees, but they tend to outperform most money managers all the time. In the same time, you are diversified.

I would vote against not too high portion of cash, rather have a flaxible money market fund, maybe divide between 2-3 different currencies, so, less exchange rate effect on you.

I also think that you being from UK, and the trend of the world now, many forgot to tell that thai baht probably will keep appriciating over the time, so, buying thai real estate funds or some SET index fund might bring you some extra gains compare to GBP funds or stocks.

4. being real young, i would definately use about 5-10% of the total fund trying some more risky but potentially higher return investments. Forex market managed accounts, or commodity market ( include gold) would be such. Oh yes, gold is risky investment too, ppl keep thinking it is one way street, but didnt think most about property too? a balance of sense, and timing is important everywhere. Anyway, riskier investments, even though a small % of the grand total, can make a large contribution, as may make 20-50% a year vs 4-5% on CDs.

5. maybe cutting slightly your expenses is a big help keeping up with the inflation, and preserving the value of your wealth. being young, you probably looking ahead of 50 yrs "retirement", value can erode a lot if you spend most income/interest/earnings.

6. as some suggested, education probably a great way to learn about your finances. DIY or just supervising your advisors/funds would both make/save you probably a lot over time.

Ok, generally this is what i think i would do, if i would have the 25-30 mill baht.

And once again: i dont think it is bad to sit back a bit and enjoy life without waking up for an alarm clock!!

Good luck to you!

[changnaam]

Ting Tong makes some good points, especially about reducing your income expectations, that will really assist you in reducing the inflation factor because if your health stays good during your 50 years "retirement" (if you don't work again) then that 25 million will be worth a hel_l of a lot less as those decades go by.

I would say though that you should spread your risk outisde of Thailand, there are far too many factors which could change things overnight here and keeping all of your wealth here is a big risk.

Also if you are not so well versed on investing and you have time on your hands why not find yourself an advisor who can manage part of your portfolio, possibly get you access to investments that are not available on the open market and teach you about looking after your money at the same time. It may cost you 1-2% per year, but if you do your own research on who you deal with could get you better returns than the "DIY" method and you may learn something along the way.

At the end of the day it is your money and you should take ultimate responsibilty, but getting good advice along the way may not hurt.

[neverdie]

Im still trying to work out what people spend 100,000 baht per month on, living here. Its Thailand not flaming down town Paris.

[sokal]

I love these kind of threads. It's classic blind leading the blind stuff. Buy shares. No, don't buy shares, they're rubbish. Live on dividends. No, dividends are crap. Gold is the thing - no it isn't . . . gold is rubbish. Blah blah blah.

With the exception of the OP, I know of only one poster on this thread who currently lives on investments. I would be inclined to pay more attention to him . .

I have some sympathy for the OP. 25 million at 32 is a lot, but not quite enough, particularly for a young guy with a family. If he was twenty years old and single, it might be enough. If it was 15 million extra it would be enough for him now.

As it is, he tends to fall between two stools.

I love these kind of threads. It's classic blind leading the blind stuff. Buy shares. No, don't buy shares, they're rubbish. Live on dividends. No, dividends are crap. Gold is the thing - no it isn't . . . gold is rubbish, then a guy says that 25million is not enough to live on, blah blah blah

The OP states that he has THB25 Million and wants to enjoy THB 100,000 per month as well as capital growth to combat inflation. I would totally agree that THB25 million is not enough unless you start talking about increasing the risk but then you want the capital guaranteed??

The 100k per month (or THB1.2 million a year) is 5% straight off so where will the capital growth come from??

-Dividend increases

-Stock value appreciation

-stock splits

-currency revaluation

That will combat inflation

[pitrevie]

check out premium bonds maximum of 30k but each month u have a chance to win a million an shed loads of other smaller cash prizes! i know some ppl who have won 10k off just a mere 5k investment. good thing is ur money is always safe as houses!

I invested the maximum amount several years ago and the highest prize I have ever won is 100 pounds. These days I get the occasional 25 pounds, I actually won two of them this month.

[wordchild]

Ting Tong makes some good points, especially about reducing your income expectations, that will really assist you in reducing the inflation factor because if your health stays good during your 50 years "retirement" (if you don't work again) then that 25 million will be worth a hel_l of a lot less as those decades go by.

I would say though that you should spread your risk outisde of Thailand, there are far too many factors which could change things overnight here and keeping all of your wealth here is a big risk.

Also if you are not so well versed on investing and you have time on your hands why not find yourself an advisor who can manage part of your portfolio, possibly get you access to investments that are not available on the open market and teach you about looking after your money at the same time. It may cost you 1-2% per year, but if you do your own research on who you deal with could get you better returns than the "DIY" method and you may learn something along the way.

At the end of the day it is your money and you should take ultimate responsibilty, but getting good advice along the way may not hurt.

while there has been lots of advice and much of it appears contradictory ,I think there is one clear theme from this thread which is worth paying attention too.If you want to get the benefit of your hard earned money dont be lazey with it ,there are any number of things you can do but you need to take the trouble to learn about the options yourself. Only you can be the best judge of what is right for you but you need to base that off thorough research.If you decide to become an investor ,in whatever form, learn about it,read a few books ,ask people who do it themselves. The good news is ,is its not that complicated and can be fun. Sadly I know quite a few guys over the last few years who made alot of money and then took their eyes off the ball , sat back thinking they had done their bit only to see their cash frittered away by financial advisors in schemes they had no understanding of .

1) be very very careful of fin advisors,esp in Thailand

2)be very very careful of investments that are "not available on the open market" .( A favourite line of many a conman) This can mean opaque structures,hidden risks,large and hidden charges at best or at worst a complete scam. people have lost a ton of money this way!

3)In anything you do try to learn as much about it yourself as possible,do not get tied to one person or source for advice cross-check everything, the internet is a fantasic tool in this respect.

4)watch out for the charges,in many products they are hidden or at least not obvious (eg trail commisions or rebates paid to an advisor by the product providor).1% may not seem a great deal but if your annual return is only say 5% its a 20% charge on your income. Much better to use a fee based advisor say in the UK or a low-cost platform like a Hargreaves Lansdowne and get them to rebate all commisions to you

Edited November 3, 2009 by wordchild

[changnaam]

2)be very very careful of investments that are "not available on the open market" .( A favourite line of many a conman) This can mean opaque structures,hidden risks,large and hidden charges at best or at worst a complete scam. people have lost a ton of money this way!

4)watch out for the charges,in many products they are hidden or at least not obvious (eg trail commisions or rebates paid to an advisor by the product providor).1% may not seem a great deal but if your annual return is only say 5% its a 20% charge on your income.

Mr Wordchild, I do hope that wasn't aimed at myself when you spoke about conmen, as I would take offence. I was talking about specific investments developed by global banks which can only be accessed through finance professionals rather than retail consumers, or can be accessed exclusively by reputable online platforms similar to the one which you mention or alternatively through private banking but I guess the principle is not quite there in terms of the amount.

In response to your point 4 would you rather pay a 1% management fee to a fund manager who has a proven track record in a particular market or industry rather than trust your own judgement?

I think it is horses for courses but for an inexperienced investor to start by trusting their own judgement solely could be suicide, similar to the people you spoke of who lost a lot of money.

Back to my earlier point, do your research, spend some time learning as well as taking some advice until you increase your own knowledge and experience.

[Naam]

Im still trying to work out what people spend 100,000 baht per month on, living here. Its Thailand not flaming down town Paris.

for the record: in downtown Paris, France (NOT Paris, Illinois) you have problems to find a studio apartment that rents for €UR 2,000 (100,000 Baht) a month. i live since five years in Thailand and have no problems to spend without any effort in excess of 300,000 Baht every month. and mind you! i hate to cross my property line, neither frequent bars or restaurants nor do i have a couple of thai girlfriends because my wife wouldn't allow it

[neverdie]

^ Naam, it seems you are paying too much for something? Perhaps you could do with some good financial advice from someone like myself, I will help you cut costs YET still live the real thailand.....I won't charge, afterall you too offer out good financial advice online, often.

[thecatman]

"i live since five years in Thailand and have no problems to spend without any effort in excess of 300,000 Baht every month."

Then perhaps you should open up another thread under the heading 'Still getting ripped off after 5 years in Thailand'.

[Naam]

^ Naam, it seems you are paying too much for something? Perhaps you could do with some good financial advice from someone like myself, I will help you cut costs YET still live the real thailand.....I won't charge, afterall you too offer out good financial advice online, often.

who says that i want to cut cost? i don't waste knowingly any money but (i think) i get my money's worth in goods and services baht for baht especially because i always compare and think "what would that cost in my home country or the countries i lived?".

true! i might save a bundle if i had a thai wife who would deal with local contractors/handymen and screw the living bejesus out of our domestic staff. but then i'd spend double that bundle on sick buffaloes, school fees for her younger brothers, motorcycles for her older brothers and a house as well as living expenses for her parents and -last not least- i'd get a shitty service at home.

now tell me how i can reduce my expenses to a hundred k per month. i am willing to listen

[neverdie]

Well Naam, with a financial backgroud such as yours, you would realise that I would have to personally examine you expenditure to make some suggestions on how you could save.

I wasnt aware that you wernt married to a thai, so having clarified that I am sure you are paying more for certain things, but if you are happy to, who am I to unsettle your bliss. You know what they say about a fool and his money?

Also for your information, Im involved with a Thai, I dónt take care of her family, her brothers, any sick buffalo etc and live very well on a fraction of what you are stating. I am a cheat though, because I have a free house on a property, so perhaps you are paying excessive rent or something.

Anyway, back to you, either throw out a list of your expenses to be examined, its up to you.

300k per month for a long term expat is somewhat expensive, I think most would agree, so its either baloney or perhaps you can just afford to be overindulgent.

[wordchild]

2)be very very careful of investments that are "not available on the open market" .( A favourite line of many a conman) This can mean opaque structures,hidden risks,large and hidden charges at best or at worst a complete scam. people have lost a ton of money this way!

4)watch out for the charges,in many products they are hidden or at least not obvious (eg trail commisions or rebates paid to an advisor by the product providor).1% may not seem a great deal but if your annual return is only say 5% its a 20% charge on your income.

Mr Wordchild, I do hope that wasn't aimed at myself when you spoke about conmen, as I would take offence. I was talking about specific investments developed by global banks which can only be accessed through finance professionals rather than retail consumers, or can be accessed exclusively by reputable online platforms similar to the one which you mention or alternatively through private banking but I guess the principle is not quite there in terms of the amount.

In response to your point 4 would you rather pay a 1% management fee to a fund manager who has a proven track record in a particular market or industry rather than trust your own judgement?

I think it is horses for courses but for an inexperienced investor to start by trusting their own judgement solely could be suicide, similar to the people you spoke of who lost a lot of money.

Back to my earlier point, do your research, spend some time learning as well as taking some advice until you increase your own knowledge and experience.

my apols did not mean to imply anything personal to you at all sorry how it came out like that. I was responding to the phrase which is a classic line of many a financial con. However I would make the point that many reputable banks have been found to have been stuffing their clients with all sorts of rubbish in the last few years eg Coutts (bankers to the queen no less) AIG bonds .Also worth reading the recent (last week) comments of the UK FSA on guarenteed return bonds and their concerns with the way these have been sold by banks to high net worth clients. If its not easily understandable dont buy it!

Edited November 3, 2009 by wordchild

[Abrak]

"i live since five years in Thailand and have no problems to spend without any effort in excess of 300,000 Baht every month."

Then perhaps you should open up another thread under the heading 'Still getting ripped off after 5 years in Thailand'.

Actually I suspect a lot of Naam's expenses are simply calculating things properly. I own a villa on the ocean in Phuket. What you cant do is say well the costs of the maids and gardener is this, the general maintenance fee is this and the utilities are x, so it costs me Bt60k a month. The fact is that the place has to be repainted every couple of years, wood revarnished, furniture replaced. So the real cost is Bt100k per month (and of course the Bt25m isnt even enough to buy my holiday home). And then say cars, its not just the cost of petrol and insurance. If you have two fairly modest cars and replace them every 5 years receiving half retail cost, then the monthly replacement cost averages Bt30,000 a month. Then you have a permanent residence and the occasional holiday abroad as well as suffering from nearly all the sins that Naam does not (especially as I have no wife.) You know say you own your home you should really value it and put a cost of capital against it.

So a lot of people simply believe they live on a lot less than they do simply because they dont cost replacing a car every 5 years at all. If by the fact that I go out to restaurants 3 or 4 times a week you believe I live an extravagant lifestyle then I do. But I go shopping about 3 times a year.

I see neither extravagance or 'rip off' in that budget. More like a sensible amount to enjoy a fairly comfortable existence. Wish I was a little more sensible.

[neverdie]

^Well I did think about that. I also wondered if he included other expenses outsdie of thailand. I dont know whats in the Naam estate, maybe hes sitting on a 100 million thai baht home with a dozen maids, maybe he has expensive taste in cars, I dunno, but 300,000 baht buys alot in thailand, as opposed to the $8500 USD buy in many western countries.

[Abrak]

i don't waste knowingly any money but (i think) i get my money's worth in goods and services baht for baht especially because i always compare and think "what would that cost in my home country or the countries i lived?".

You see in my view that is far too frugal. Most things in Thailand are pretty cheap but certain things are not - like a drinkable bottle of wine. So as I see it you can either cough up for something drinkable or your choice is cats piss.

To me there is absolutely no point sitting at a restaurant table staring at the wine menu and wondering how much it would cost you in your home country because you are NOT.

Now you can say you are wasting money but you are living in a country where you are saving a lot on a lot. By all means choose to drink cats piss or just face up to the fact that drinkable wine is overpriced, pay for it and enjoy it. To me if a decent drinkable bottle of wine is an extravagance, rip off, wastefulness then the impoverishment implied in not being able to enjoy these things is not worth living for.

[Abrak]

^Well I did think about that. I also wondered if he included other expenses outsdie of thailand. I dont know whats in the Naam estate, maybe hes sitting on a 100 million thai baht home with a dozen maids, maybe he has expensive taste in cars, I dunno, but 300,000 baht buys alot in thailand, as opposed to the $8500 USD buy in many western countries.

But truely many people dont account properly. I go on one holiday a year (not extravagant although I dont work). I spent a week in Venice and 5 weeks in Ibiza. Cost Bt1m - Bt80,000 a month - and I didnt save any of my costs in Thailand. It very soon adds up.

[Naam]

"i live since five years in Thailand and have no problems to spend without any effort in excess of 300,000 Baht every month."

Then perhaps you should open up another thread under the heading 'Still getting ripped off after 5 years in Thailand'.

Actually I suspect a lot of Naam's expenses are simply calculating things properly. You know say you own your home you should really value it and put a cost of capital against it. So a lot of people simply believe they live on a lot less than they do simply because they dont cost replacing a car every 5 years at all. If by the fact that I go out to restaurants 3 or 4 times a week you believe I live an extravagant lifestyle then I do.

actually i am not calculating things properly as i don't consider depreciation/replacement for the two cars in Thailand as running cost. the same goes for the cost of blocked capital because we own the roof over our heads. if i did, then i'd have to add at least another 150k Baht to my expenses. needless to say that i don't consider any penny for the two residencies we keep abroad but hardly ever use.

[neverdie]

Naam,

From what I've read of your posts in the financial threads, you are no idiot.

Having said that, you must be one seriously wealthy man, becuase if you were using more than 3-5% of your portfolio income then you would probably be going against some basic investment pricipals.

By the sounds of it you are spending more than 3.6 million baht per year here in Thailand plus have considerable expenses elsewhere.....you must be turning over one hel_l of an income, so who am i to stand in your way, spend away my friend.

....if you find ur millions bothering you, spear a couple my way, i will put them to good use whilst remaining frugal

[Naam]

^Well I did think about that. I also wondered if he included other expenses outsdie of thailand. I dont know whats in the Naam estate, maybe hes sitting on a 100 million thai baht home with a dozen maids, maybe he has expensive taste in cars, I dunno, but 300,000 baht buys alot in thailand, as opposed to the $8500 USD buy in many western countries.

expenses outside Thailand, except our health insurance, not considered (see above). modest home on which i spent ~26mm Baht. two live-in domestic staff plus a driver. two very modest cars in Thailand (Honda Accord and Honda Jazz). my expensive taste as far as running cost is concerned is limited to wines, cuban cigars, some imported food stuff and a 600m² fully airconditioned living area.

worthwhile to mention is that we don't use a single penny of our own money for living expenses. until last week they were paid for by Mr. Steinbrueck and since then Mr. Schäuble is taking care of them. what!? you don't know who these gentlemen are doesn't everybody know that the first one was and the latter one is the german finance minister and taxman?

[Naam]

Naam,

From what I've read of your posts in the financial threads, you are no idiot.

sounds good to me. but my wife might not fully agree with your assessment. she claims she has enough experience to evaluate me. come next monday we are married thirty years

[neverdie]

^Clearly mate, she is a very patient woman.

You and I are living in two different Thailands, your Thailand sounds far too expensive for me. I would be glad to send those gentleman Mr. Steinbrueck & Mr. Schäuble some of my bills in the mean time.

you are obviously worth a quid or two, if you could kindly arrange for me to be placed in you will, I will quietly arrange for your accident