Thai Baht Weakens On Concerns Over Renewed Violence: BoT

[lannarebirth]

USD:THB building a nice little base for a run higher here. Short term anyway.

[ataloss]

Re Paddock's 'Our new home cost 7 mill and is selling now for 7.5'. "Is selling" or 'sold'? Big difference.

[somtampet]

When I first came to Thailand it was 25 to a Dollar and 41 - 42 for a Pound.

Later the pound was in the 36 - 37 Baht range whilst the dollar was still 25 being the baht was pegged to the USD currency at that time.

That was nearly 20 years ago, so many people have retired to Thailand more recently, when the GBP was 70's and USD was mid 40's and based their income on those rates and are now struggling, it's a hard pill to swallow, but some will not have the amount of pension required to remain in Thailand on a retirement visa, if they rely on Pension alone.

Good luck to all.

well my wife and i retired to Thailand in 2005 when the pound was at 75 to the baht.Our new home cost 7 mill and is selling now for 7.5. Thats a healthy profit with the baht at 46 today. we left Thailand last year and returned to live in the U.K. and have not regretted the move. We were burgled twice,had money stolen when my wife had her handbag snatched and in common with many falang friends, were " fined " by traffic police many many times.

Thailand is corrupt from top to bottom,there is no rule of law,it truly is a third world country where behind the smile is always a crooked hand.

Lucky you did have time in this pathetic corrupt country as you made 500,000 baht on your house.

Lucky you moved back to the uk as crime is zero there.

Lucky you didnt buy a hous ein uk as you would have lost money.

Lucky you moved back to Uk so we dont here you moan no more.

bye bye

Edited May 28, 2010 by somtampet

[johnson36]

When I first came to Thailand it was 25 to a Dollar and 41 - 42 for a Pound.

Later the pound was in the 36 - 37 Baht range whilst the dollar was still 25 being the baht was pegged to the USD currency at that time.

That was nearly 20 years ago, so many people have retired to Thailand more recently, when the GBP was 70's and USD was mid 40's and based their income on those rates and are now struggling, it's a hard pill to swallow, but some will not have the amount of pension required to remain in Thailand on a retirement visa, if they rely on Pension alone.

Good luck to all.

well my wife and i retired to Thailand in 2005 when the pound was at 75 to the baht.Our new home cost 7 mill and is selling now for 7.5. Thats a healthy profit with the baht at 46 today. we left Thailand last year and returned to live in the U.K. and have not regretted the move. We were burgled twice,had money stolen when my wife had her handbag snatched and in common with many falang friends, were " fined " by traffic police many many times.

Thailand is corrupt from top to bottom,there is no rule of law,it truly is a third world country where behind the smile is always a crooked hand.

Lucky you did have time in this pathetic corrupt country as you made 500,000 baht on your house.

Lucky you moved back to the uk as crime is zero there.

Lucky you didnt buy a hous ein uk as you would have lost money.

Lucky you moved back to Uk so we dont here you moan no more.

bye bye

He bought the house for 7 million baht when it was 75 to the pound = £100,000

He has now sold it for 7.5 million baht and only needs to give around 46 baht to get each pound back, 7.5 million baht / 46 baht = £163043.

So he has made £63043 or 2.9 million baht at 46 to the pound.

Looks like a good deal to me.

[johnson36]

double post

Edited May 28, 2010 by johnson36

[Gambles]

When I first came to Thailand it was 25 to a Dollar and 41 - 42 for a Pound.

Later the pound was in the 36 - 37 Baht range whilst the dollar was still 25 being the baht was pegged to the USD currency at that time.

That was nearly 20 years ago, so many people have retired to Thailand more recently, when the GBP was 70's and USD was mid 40's and based their income on those rates and are now struggling, it's a hard pill to swallow, but some will not have the amount of pension required to remain in Thailand on a retirement visa, if they rely on Pension alone.

Good luck to all.

well my wife and i retired to Thailand in 2005 when the pound was at 75 to the baht.Our new home cost 7 mill and is selling now for 7.5. Thats a healthy profit with the baht at 46 today. we left Thailand last year and returned to live in the U.K. and have not regretted the move. We were burgled twice,had money stolen when my wife had her handbag snatched and in common with many falang friends, were " fined " by traffic police many many times.

Thailand is corrupt from top to bottom,there is no rule of law,it truly is a third world country where behind the smile is always a crooked hand.

Lucky you did have time in this pathetic corrupt country as you made 500,000 baht on your house.

Lucky you moved back to the uk as crime is zero there.

Lucky you didnt buy a hous ein uk as you would have lost money.

Lucky you moved back to Uk so we dont here you moan no more.

bye bye

He bought the house for 7 million baht when it was 75 to the pound = £100,000

He has now sold it for 7.5 million baht and only needs to give around 46 baht to get each pound back, 7.5 million baht / 46 baht = £163043.

So he has made £63043 or 2.9 million baht at 46 to the pound.

Looks like a good deal to me.

UK property prices might not be quite back down to 2005 levels yet though

so have to wait a bit longer for that part to be profitable too!

[JohnLeech]

I totally agree with you, nothing to do with "piss poor management" You would have needed one hel_l of a Chrystal Ball to have predicted this huge fall in the £ from 75 to currently 46. I did a similar calulation as above last week. Gutted !! May have to send the wife out chopping Sugar Cane !! if this gets any worse.

It's not so much to do with having a crystal ball as basic financial planning and matching assets and income to liabilities and expenditure

Any currency mismatch is a risk and having taken the risk and lost the consequences must be very uncomfortable and I sympthise.

That said, the appalling terrorist events should create a window of opportunity to try to match these better. However that's not much of a consolation for today's terible events which will hang like a big black pall over Bangkok for a very long time.

You really don't understand the "basics" at all, do you?

The situation continually referred to is only partly due to a "currency mismatch" (why is it that self-styled "financial advisers" so seldom speak English?). In the example given here previously, for example, which is probably reasonably typical, the drop in income of well over 50% was due to the unexpected drop in interest rates which have dropped as much offshore as they have onshore (in a number of cases rather more). Even if you factor in the tax savings by moving to an offshore pension fund you would still be facing a drop of over 50% overall from the vast majority of such funds; very few are managing to give similar or better returns now than they were four years ago, and to suggest that they are is grossly deceptive, particularly when you factor in the short term costs of swopping funds - often the only person to gain from such a move is the broker, as the buyer may not live long enough to recoup these.

The fall in the exchange rate of the pound (euro, etc) has simply exacerbated this problem for those living in Thailand.

If the effects of the global recession had anything to do with "basic financial planning" then a lot of people would be considerably better off - they don't (and they arent). Very few people saw it coming, including those with far greater financial acumen (and finances) than you and I. The only financial advisers I have any respect for are those few who get paid by results (a % of their clients' actual investment returns) rather than the vast majority who simply get a commission on the products they sell regardless of how those products perform or their suitability for the buyers.

Anyone can be wise (or at least appear wise) with the benefit of hindsight.

[JohnLeech]

.....

And if the pensioners (like me) had planned for currency fluctuations (which is vital when retiring to any foreign country), they would have seen that a lump sum in a Thai bank was the answer. Currently 800,000 baht for complete compliance with visa requirements, but it's the combination of savings + income that immigration considers. And 800,000 baht is protected from currency fluctuations. Just don't touch it.

So if the baht strengthens enough to threaten their compliance, they only need to add a little to savings to offset the shortage.

"The answer" to what?

If you "don't touch" the 800,000 baht, and especially if you have some pension or income from investments anywhere which you could use to reduce that figure, then all you are saving is the difference in the exchange rate for whatever you need to bring in to keep it at the required level. Presumably you are bringing in some money to pay for your existence here, rather than working illegally or surviving on the free samples at Carrefour.

Most pensioners would prefer and plan to live primarily on income from their savings (as well as their pension), rather than simply spend their capital - which is exactly what they would be doing if they had "seen that a lump sum in a Thai bank was the answer", at least if it was in Thai baht at minimal interest, being taxed.

Re Paddock's 'Our new home cost 7 mill and is selling now for 7.5'. "Is selling" or 'sold'? Big difference.

Vast.

[Gambles]

I totally agree with you, nothing to do with "piss poor management" You would have needed one hel_l of a Chrystal Ball to have predicted this huge fall in the £ from 75 to currently 46. I did a similar calulation as above last week. Gutted !! May have to send the wife out chopping Sugar Cane !! if this gets any worse.

It's not so much to do with having a crystal ball as basic financial planning and matching assets and income to liabilities and expenditure

Any currency mismatch is a risk and having taken the risk and lost the consequences must be very uncomfortable and I sympthise.

That said, the appalling terrorist events should create a window of opportunity to try to match these better. However that's not much of a consolation for today's terible events which will hang like a big black pall over Bangkok for a very long time.

You really don't understand the "basics" at all, do you?

The situation continually referred to is only partly due to a "currency mismatch" (why is it that self-styled "financial advisers" so seldom speak English?). In the example given here previously, for example, which is probably reasonably typical, the drop in income of well over 50% was due to the unexpected drop in interest rates which have dropped as much offshore as they have onshore (in a number of cases rather more). Even if you factor in the tax savings by moving to an offshore pension fund you would still be facing a drop of over 50% overall from the vast majority of such funds; very few are managing to give similar or better returns now than they were four years ago, and to suggest that they are is grossly deceptive, particularly when you factor in the short term costs of swopping funds - often the only person to gain from such a move is the broker, as the buyer may not live long enough to recoup these.

The fall in the exchange rate of the pound (euro, etc) has simply exacerbated this problem for those living in Thailand.

If the effects of the global recession had anything to do with "basic financial planning" then a lot of people would be considerably better off - they don't (and they arent). Very few people saw it coming, including those with far greater financial acumen (and finances) than you and I. The only financial advisers I have any respect for are those few who get paid by results (a % of their clients' actual investment returns) rather than the vast majority who simply get a commission on the products they sell regardless of how those products perform or their suitability for the buyers.

Anyone can be wise (or at least appear wise) with the benefit of hindsight.

Well I do like to think that I understand the basics, John...and I'm not being smart with hindsight - if anything I'm a broken record. My song tends to remain the same as it's built on certain very basic and very obvious fundamental and almost eternal premises.

I totally agree that the situation continually referred to is indeed only partly due to a "currency mismatch".

However with good planning there shouldn't have been such a mismatch.

In plain English if you spend based largely in one currency you take a risk if your income is in another currency and if you don 't arrange to hedge that risk.

Yes interest rates have fallen and so have yields but again look at the mismatch here - short term interest rates to fund long term income? With up to 50 year duration fixed yield vehicles available in many currencis it's bad planning to fund long term income requirements with short term yields. Duration mismatch - but I hope that's clear enough.

Match the currency (ies), match the duration and then save yourself the best part of 40% tax and you should be now better off than pre-06, when UKG helped themselves to tax on pension income and didn't offer the opportunity to mitigate that.

If you locked into long term yields with sufficient assets to cover the income requirements then these would be unchanged versus 4 years ago. The same gross income. No swapping or anything - just plan it right and set it up right. The difficulty is that in many situations you do need to leave flexibility to change personal plans as most of us do change our lifeplans from times to time but this can usually be accomplished with the surplus assets over and above those needed to produce the immediate income. If not then the risks of locking in versus the risks of mismatch need to be evaluated on a case by case basis. This can be the most subjective part of teh decision making process.

Any arrangement that is not overall cost-effective does not make sense so I'd agree with your comments about fees - these obviously need to be factored into every calculation. The advisor who does the work can't generally do it for free in any model that I've seen but as long as all parties benefit (well except for HMRC!) then it should be a good deal. If not then it shouldn't go ahead. That's very, very simple and very, very obvious, quite irrespective of how the basis of remuneration is calculated.

The essence of planning is not to do with whether people saw the GFC (or falling interest rates, or Sterling depreciation coming or not - although if you read my writings over the last 10 years these were all a priori major concerns of mine) but rather to look at the current situation and to assess the impact of what will happen, what probably should happen and what might happen. It's not about being right or wrong in forecasting; that's where portfolio managers earn their corn (or not). It's about ensuring that currencies, durations, assets, liabilities, incomes and expenditures are matched, tax-efficiency is achieved etc.

I think that whatever the model, every financial advisor, like anyone else in life, should be and ultimately is largely paid by results but this is a really interesting topic - trying to set performance fees in a sustainable way versus fee income etc - in the interests of disclosure we offer clients all bases and I still haven't drawn any firm conclusions as to whether fees, commissions or incentives are better in any particular situation but I do think that this is such a fascinating and complex area that it should be discussed properly. How about we arrange a physical forum for TV readers - come along to the MBMG office and you can put the case for performance fee and I can outline the case for client choice and we could have an open debate about this? You could air your thoughts and by the end of the session we'd all know much better the general view on this topic. That could be really, really useful for everyone and much more pertinent than just tarring everyone with the same brush of snide vague general grumbling and mumblings?

[JohnLeech]

Sesquipedilea is clearly alive and well!

Well I do like to think that I understand the basics….

So do we all (and so, I am sure, do your clients!):

"In plain English" few pensioners/retirees are interested in "up to 50 year duration fixed yield vehicles available in many currencis" as most don't expect to live that long.

"save yourself the best part of 40% tax" ?? Only if your pension fund alone was paying you over £34,000 a year (assuming you were also getting the UK basic pension).

"come along to the MBMG office and you can put the case for performance fee ..." I don't think that would be necessary (or that there would be enough room for more than the two of us, if memory serves me) as the case is simple: if what you sell performs adequately you get paid, while if it doesn't you don't - much like most people offering a service (and certainly like most offering one in Pattaya!).

I am not particularly interested in "snide vague general grumbling and mumblings" - I simply found your comment that "..... In every instance that I've seen, any UK pensioner not receiving more Baht than in 06 has been and is continuing to make a serious financial mistake" to be laughably irrational.

Somehow I think I'll be paying a bit more attention to roamer - at least I don't feel like I'm listening to one of the Emperor's advisors telling him about his New Clothes. Tell you what, though, to stop me making any more "snide vague general grumbling and mumblings", and so that you can do something "really, really useful for everyone", why don't you name anything guaranteed to give "almost 7% return offshore in THB..". In basic English, I think that's called put up or shut up.

Edited May 30, 2010 by JohnLeech

[Gambles]

Clearly sesquipedilea is clearly alive and well, John, but please don't feel that you have to try that hard to impress. When people do that it usually that tends to be counter-productive.

"In plain English" few pensioners/retirees are interested in "up to 50 year duration fixed yield vehicles available in many currencis" as most don't expect to live that long.

I agree that most retirement durations would be less then 50 uyears in which case a window of 0-50 years should encompass most people's income needs. I'm glad that we agree on that.

In relation to your comment "save yourself the best part of 40% tax" ?? Only if your pension fund alone was paying you over £34,000 a year (assuming you were also getting the UK basic pension), all I can say is that for most of the work that I've done, that has been the case - in many cases other UK sources of income, such as rental income, have also had to be considered.The principle would also apply to lower pension recipients but of course with different numbers. Each needs to be individually calculated which is why I think that these things are best discussed in person rather than via blogs, but whatever the tax saving the principle of income and expenditure and asset and liability match/mismatch needs to be addressed.

"come along to the MBMG office and you can put the case for performance fee ..." I don't think that would be necessary (or that there would be enough room for more than the two of us, if memory serves me) as the case is simple: if what you sell performs adequately you get paid, while if it doesn't you don't - much like most people offering a service (and certainly like most offering one in Pattaya!).

I have no idea what you mean here. I think that if you want to discuss this point, let's devote one of MBMG's regular boardroom events (we normally get around 20 people to come each month to our boardroom for breakfast/lunch/evening with expert speakers).

I think that the idea of fees, the idea of UK tax planning for Thai residents and the idea of income generating vehicles is a fascinating topic and I'm sure that we could provide stimulating and open discussion sessions....

I am not particularly interested in "snide vague general grumbling and mumblings" - I simply found your comment that "..... In every instance that I've seen, any UK pensioner not receiving more Baht than in 06 has been and is continuing to make a serious financial mistake" to be laughably irrational.

In that case I really think that the best thing is to come along and I'll prepare an analysis of every real life case that we've handled in that time and then perhaps you'll stop laughing irrationally. I'll also prepare detailed background about Thai Baht income options at the same time too as the nature, duration and terms of these would vary from individual to individual requirement but in general we're looking at 6.8% net today. I hope that's put up enough for you!!

Somehow I think I'll be paying a bit more attention to roamer - at least I don't feel like I'm listening to one of the Emperor's advisors telling him about his New Clothes.

I like Roamer's posts too. I think that he writes some very interesting stuff.

[McFarang]

When I first came to Thailand it was 25 to a Dollar and 41 - 42 for a Pound.

Later the pound was in the 36 - 37 Baht range whilst the dollar was still 25 being the baht was pegged to the USD currency at that time.

That was nearly 20 years ago, so many people have retired to Thailand more recently, when the GBP was 70's and USD was mid 40's and based their income on those rates and are now struggling, it's a hard pill to swallow, but some will not have the amount of pension required to remain in Thailand on a retirement visa, if they rely on Pension alone.

Good luck to all.

well my wife and i retired to Thailand in 2005 when the pound was at 75 to the baht.Our new home cost 7 mill and is selling now for 7.5. Thats a healthy profit with the baht at 46 today. we left Thailand last year and returned to live in the U.K. and have not regretted the move. We were burgled twice,had money stolen when my wife had her handbag snatched and in common with many falang friends, were " fined " by traffic police many many times.

Thailand is corrupt from top to bottom,there is no rule of law,it truly is a third world country where behind the smile is always a crooked hand.

Lucky you did have time in this pathetic corrupt country as you made 500,000 baht on your house.

Lucky you moved back to the uk as crime is zero there.

Lucky you didnt buy a hous ein uk as you would have lost money.

Lucky you moved back to Uk so we dont here you moan no more.

bye bye

He bought the house for 7 million baht when it was 75 to the pound = £100,000

He has now sold it for 7.5 million baht and only needs to give around 46 baht to get each pound back, 7.5 million baht / 46 baht = £163043.

So he has made £63043 or 2.9 million baht at 46 to the pound.

Looks like a good deal to me.

GB 69,710.47 7 Million at 75 THB to the GBP is GBP 93,333.33 7.5 Million at 46 is GBP163,043.47 3.2 Million THB Profit