Opinions Sought - Mid Life Crisis

[turgid]

I'm interested in the opinion of others since i assume some of you may have either considered this - or have been through it.

I am early fifties and about to lose my job at the end of contract. I've been working in Asia for around 15 years and for the last year in Thailand.

I have no permanent dependents spouse, houses or fixed assets. I dont have have any real pension because I've never been able to trust investment advisors.

I have a small amount of personal stuff in store and two suitcases.

Despite this or perhaps because of it I do have around US$ 1.5 M in cash, stocks and other fairly liquid assets. I hold a Singapore PR which will expire next year and presumably wont get renewed and I am a UK passport holder.

The time between jobs is getting longer and I know i will struggle to get another decent job in Thailand. I probably have a little longer shelf life in the UK and could revert to UK life - i've been offered a position at around half my current salary but the idea of 45% tax 6AM-8PM days commuting to London and cleaning the house, car and doing the laundry at the weekend isnt appealing right now when most of the money will be paid in rent..

- What would you do.

- Where would you live.

- How long can you make US$ 1.5 m in cash last and still have a decent quality of life

- Any other comments, suggestions, deas

[neil324]

With no dependants what you waiting for, i'd retire straight away with that cash, even at my age of 38.

You can't take it with you. Assuming this is not a troll post?

Edited November 5, 2010 by neil324

[midasthailand]

Stick the cash somewhere safe at Say 5% interest and you can live like a king on US$75,000 a year!!

[Naam]

1. - What would you do.

2. - Where would you live.

3. - How long can you make US$ 1.5 m in cash last and still have a decent quality of life

1. retire immediately!

2. and live a very comfortable life in Asia (Malaysia, Thailand or the Philippines).

3. if you educate yourself and handle your assets a wee bit professionally you won't touch your capital till they carry you to the crematorium.

:jap:

[OriginalPoster]

Stick the cash somewhere safe at Say 5% interest and you can live like a king on US$75,000 a year!!

Where does one safely get 5% interest these days?

[ThaiRich]

!.5 million US$, is 45,000,000 THB. If you spent 30,000 baht a month to live( you can live decently on that, many teachers do). 1 year is 360,000 THB, 3 years is 1,200,000 THB. so if you have 45,000,000 baht you have enough money to live a modest live for the next 35-37 years. If you doubled your montly spending to 60,000 baht(that would be a great life). You would have enough money to live for another 20-22 years and never have to work. Do the math it's a no brainer. You said your in your early fifties. Your life expectancy is another 20 - 25 years. You got enough money now to just get a retirement visa here in Thailand and just chill. I wouldn't consider this a mid life crisis. This is something to celebrate.

Edited November 5, 2010 by ThaiRich

[Naam]

Stick the cash somewhere safe at Say 5% interest and you can live like a king on US$75,000 a year!!

Where does one safely get 5% interest these days?

anybody who asks this question does not deserve an answer

Edited November 5, 2010 by Naam

[sarahsbloke]

Put 1/2 your money in an Australian bank account earning 6.5%

Australian dollars aren't doing as badly against the Baht as the US dollar .... the currency appears far more stable.

Keep the other half in the USA (just in case)

Retire to Thailand, and chase much younger women .... or with the amount of money you have ....... run away from much younger women.

Edited November 5, 2010 by sarahsbloke

[Naam]

Keep the other half in the USA (just in case)...

and let Bernanke take care of it

[Tompa]

!.5 million US$, is 45,000,000 THB. If you spent 30,000 baht a month to live( you can live decently on that, many teachers do). 1 year is 360,000 THB, 3 years is 1,200,000 THB. so if you have 45,000,000 baht you have enough money to live a modest live for the next 35-37 years. If you doubled your montly spending to 60,000 baht(that would be a great life). You would have enough money to live for another 20-22 years and never have to work. Do the math it's a no brainer. You said your in your early fifties. Your life expectancy is another 20 - 25 years. You got enough money now to just get a retirement visa here in Thailand and just chill. I wouldn't consider this a mid life crisis. This is something to celebrate.

No need to live on a budget. His in his fifties so lets say he's got 40 years left. He could easily spend 90000baht a month during 40 years and still have change left!

To the OP, retire immediately and enjoy life!

[givenall]

Stick the cash somewhere safe at Say 5% interest and you can live like a king on US$75,000 a year!!

I am almost in a identical situation and I decide to stay in Thailand. I bought a condo, to eliminate rent which could add up in coming years. And I agree with this post that you should put it into some investment that give you study income. But I got bored so I started a small business here that will break even and give me a little income. I also started to teach management par time. I don’t depend on the income but I don’t want it to be burden either. And then HAVE FUN

[CaptHaddock]

My advice is to keep your expenses lower than you think you can afford. When you use long-range planning tools you find that the longevity of your portfolio varies a lot--the chances of running out of money early on the one hand or ending up with more than you started on the other are higher than they seem. A period of high inflation or large currency swings can have a very large effect. You're aiming to sustain yourself for thirty or forth years. Even a small initial aiming error, like spending too much, can cause a big miss.

The other advantage of long-range planning is that it helps you focus not on the pile of cash, which may make you feel rich, but on the sustainable spending rate, which will make you feel a lot less rich.

Since you have never been in this situation before, you can't expect to get everything right the first time. As you know, if you lose it you won't get a second chance to earn it. So, estimating everything conservatively, e.g. spending level, return on assets, currency stability, would seem to be the prudent approach.

Edited November 5, 2010 by CaptHaddock

[wordchild]

stay well clear of Thai based financial advisors! incl those who have probably already sent you a friendly pm introducing themselves!

On a more serious note the sum you are talking about, even if well invested, is probably only borderline enough for a fairly comfortable and hopefuly long! retirement ,you need to be careful. Also you need to think of your mental health and find something (other than bars) to keep you occupied.

my advice would be to work for another few years; but maybe change the pattern longer winter hols in Thailand and so on etc

Edited November 5, 2010 by wordchild

[ThaiRich]

My advice is to keep your expenses lower than you think you can afford. When you use long-range planning tools you find that the longevity of your portfolio varies a lot--the chances of running out of money early on the one hand or ending up with more than you started on the other are higher than they seem. A period of high inflation or large currency swings can have a very large effect. You're aiming to sustain yourself for thirty or forth years. Even a small initial aiming error, like spending too much, can cause a big miss.

The other advantage of long-range planning is that it helps you focus not on the pile of cash, which may make you feel rich, but on the sustainable spending rate, which will make you feel a lot less rich.

Since you have never been in this situation before, you can't expect to get everything right the first time. As you know, if you lose it you won't get a second chance to earn it. So, estimating everything conservatively, e.g. spending level, return on assets, currency stability, would seem to be the prudent approach.

I agree with what your saying if the OP was in his late 20's or early 30's. But, as he has stated he is in his early 50's. I'm not sure that "long range" or "long term" is in his best interest. But the bulk of it in government guaranteed deposits and live within a budget. Make sure that he has independent health care. That is about a long term as he needs to plan, unless he is planning on making on of his realitives rich.

[metisdead]

I became "retired" last year when I got laid off after working for the company for almost 30 years, I am 53 now. My portfolio is a bit less than half of what the OP has, however, I bought a house (in her name) +10 years ago, and am living comfortably on way less than 100K Baht/month (in the 'burbs of BKK). Even if OP buys a condo in BKK or elsewhere, initially it will sting, however $1.5 million is quite enough to live off of for quite awhile.

[UberBraun]

I have $1.25M US invested in the Turks and Caicos Islands (Tax free), and I have been getting a fairly consistant $100,000 per year interest on that amount. I have not touched (nor do I intend to) the principal.

So if you invest your money well, you can live off the interest alone. I had been getting almost 1M baht per quarter, but with the drop in the exchange rate, I am now getting just over 700,000 baht per quarter. I can live quite comfortably on that.

If I were you, I would just retire. Find a good retirement friendly country to settle in (not Thailand), and live a long and happy life.

[nong38]

I think you can afford to retire early and stop worrying. You talk of commute so I guess you are familiar with the London area as you have a UK passport, my suggestion to you is bank an email off to bestinvest.co.uk they can give you some basic pointers, if you know what you want to invest in then it will cost you nothing or near to it, if you want advice they can give it but probably charge you, but find out, it will cost you nothing and safer to have money in the UK invested than here I think. I have invested in this part of the world through them, I have some that pay me an income 4 times a year and some that are growth. I have been with them for over 10 years.

Life in Thailand is much better than the UK and the UK is in for turbulent times so why go back? I live in a brand new block, in Nakhon Sawan, its a big room, from what you say you are alone, so how does this sound. Air con, cable tv, internet and gated for 2700 bts a month, with electric and water last month 3120. Nakhon Sawan is not Pattaya or Phuket depends what you want but I am very happy here and we can go to the coast if we decide.

Yorkshireman downstairs and other neighbours speak English, some rooms available still.

Get in touch if you want to know more.

Think what you want from life, how you are going to achieve that and what its going to cost you, can you afford it, sounds like you certainly can, just make sure that is what you want.

[dom samui]

Gold...............

[craigt3365]

I'm in about your same situation. Although it is a fair amount of cash, it's not unlimited. And if something health wise hits, you could be out a good chunk of that cash. So IMHO, you are right on the bubble of being able to make it....same with me.

But...you do have plenty to live on here. It's really easy to live on 60-80K Baht per month and have a great life. If you don't have mortgage or rent payments. That's about our budget and, luckily, we are saving some money...not touching the principal except for the purchase of a house.

I can't imagine going back to the US to work. The older you get, the harder it is to get back into it...and deal with life "back home".

Like givenall says, at your (our) age, you still need something to keep you busy. My passion is travel, and it keeps me busy. Having a home is nice as you always have something you can do. In an apartment, there is not much of that type of work. So you need to find something to do. Luckily, the expat community here is really good. Easy to find mates to hang out with, play pool, travel around, etc. A great life here for sure. Just watch your cash, no crazy investments, and enjoy!!!

[chainarong]

Be careful with the money bit, lots of lovely people out there , namely gold diggers who will help U part with the said million, having said that, I refer to a silly old fart that won lotto in Perth, against the families wishes he trotted off to Thailand, six months later the family had to rescue the stupid nutter, unless U know good Thai people ,in non tourist area's , be careful.Think twice laddie.

[ableguy]

!.5 million US$, is 45,000,000 THB. If you spent 30,000 baht a month to live( you can live decently on that, many teachers do). 1 year is 360,000 THB, 3 years is 1,200,000 THB. so if you have 45,000,000 baht you have enough money to live a modest live for the next 35-37 years. If you doubled your montly spending to 60,000 baht(that would be a great life). You would have enough money to live for another 20-22 years and never have to work. Do the math it's a no brainer. You said your in your early fifties. Your life expectancy is another 20 - 25 years. You got enough money now to just get a retirement visa here in Thailand and just chill. I wouldn't consider this a mid life crisis. This is something to celebrate.

Good post I could not agree more, I cannot imagine how having assets of 1.5 mill is a crisis at his age, perhaps like many of us retiring after working all ones life does take some adjusting to but once adjusted who would go back to a life of toil.

[bushwacker]

A lot of very good advice and some not so good. The challenge is to figure out the good!

I agree with many posters that you need to protect your capital else the game is over. Maybe good health insurance (cheap) is in order and i would suggest not keeping money in a country that you do not feel totally safe with the banking system. (like Thailand but also like the USA)

I retired when i was 47 and have been managing my own money since university which by the way i paid for myself and finished the 4 year business degree with debt. As a few posters have suggested the importance is a plan and a budget. If you were to do a financial analysis you would see exactly where you stand. Much research has been done to suggest that if you invest in 60% stocks and 40% bonds and withdraw 3-4% of your money each year then you will never run out. Cool !!!

Here is an example of an annuity calculation that you can do on any business calculator.

In the example let us assume you have $1.22 million Canadian, (which will soon be the same as your USA lump sum ...hihihihihi ), that you want monthly payouts for 38 years, your nest egg will be $0 at the end of 38 years. Then the question will be how much money can you get each month at different rates of return (i.e. interest, dividend or capital gains.)

RATE OF RETURN BAHT/YR BAHT/MONTH

0% 966,240 80,250 @30BAHT TO THE DOLLAR

0.5 1,060,000 88,333

1.0 1,160,000 96,667

2.0 1,378,000 114,833

5.0 2,151,000 179,250

So you can see from this that it would be very easy to retire on your amount of money provided you are not very sick, you are good with controlling your expenditures, and you can protect your capital.

cheers

[bushwacker]

Gold...............

Good example of bad advice .... but funny .... :jap:

[craigt3365]

A lot of very good advice and some not so good. The challenge is to figure out the good!

I agree with many posters that you need to protect your capital else the game is over. Maybe good health insurance (cheap) is in order and i would suggest not keeping money in a country that you do not feel totally safe with the banking system. (like Thailand but also like the USA)

I retired when i was 47 and have been managing my own money since university which by the way i paid for myself and finished the 4 year business degree with debt. As a few posters have suggested the importance is a plan and a budget. If you were to do a financial analysis you would see exactly where you stand. Much research has been done to suggest that if you invest in 60% stocks and 40% bonds and withdraw 3-4% of your money each year then you will never run out. Cool !!!

Here is an example of an annuity calculation that you can do on any business calculator.

In the example let us assume you have $1.22 million Canadian, (which will soon be the same as your USA lump sum ...hihihihihi ), that you want monthly payouts for 38 years, your nest egg will be $0 at the end of 38 years. Then the question will be how much money can you get each month at different rates of return (i.e. interest, dividend or capital gains.)

RATE OF RETURN BAHT/YR BAHT/MONTH

0% 966,240 80,250 @30BAHT TO THE DOLLAR

0.5 1,060,000 88,333

1.0 1,160,000 96,667

2.0 1,378,000 114,833

5.0 2,151,000 179,250

So you can see from this that it would be very easy to retire on your amount of money provided you are not very sick, you are good with controlling your expenditures, and you can protect your capital.

cheers

Great post, great info!!!!! I think you can live comfortably on 100k Baht per month here! Actually, live like a king!

[rgs2001uk]

A lot of very good advice and some not so good. The challenge is to figure out the good!

I agree with many posters that you need to protect your capital else the game is over. Maybe good health insurance (cheap) is in order and i would suggest not keeping money in a country that you do not feel totally safe with the banking system. (like Thailand but also like the USA)

I retired when i was 47 and have been managing my own money since university which by the way i paid for myself and finished the 4 year business degree with debt. As a few posters have suggested the importance is a plan and a budget. If you were to do a financial analysis you would see exactly where you stand. Much research has been done to suggest that if you invest in 60% stocks and 40% bonds and withdraw 3-4% of your money each year then you will never run out. Cool !!!

Here is an example of an annuity calculation that you can do on any business calculator.

In the example let us assume you have $1.22 million Canadian, (which will soon be the same as your USA lump sum ...hihihihihi ), that you want monthly payouts for 38 years, your nest egg will be $0 at the end of 38 years. Then the question will be how much money can you get each month at different rates of return (i.e. interest, dividend or capital gains.)

RATE OF RETURN BAHT/YR BAHT/MONTH

0% 966,240 80,250 @30BAHT TO THE DOLLAR

0.5 1,060,000 88,333

1.0 1,160,000 96,667

2.0 1,378,000 114,833

5.0 2,151,000 179,250

So you can see from this that it would be very easy to retire on your amount of money provided you are not very sick, you are good with controlling your expenditures, and you can protect your capital.

cheers

Great post, great info!!!!! I think you can live comfortably on 100k Baht per month here! Actually, live like a king!

Takes no account of inflation and exchange rates.

Yes can live well here on 100k per month, how much will that 100k buy you in say 5 or 10 years time, and how much will it cost you in $ terms to buy it?

Also no capital growth, every year the capital is being eroded.

People with this amount of money arent struggling on 50k per month.

The op can protect his capital and watch it gain value, and still generate at least 250-300k baht per month,

which if he doesnt spend the lot each month he can then reinvest.

[Naam]

5.0 2,151,000 179,250

So you can see from this that it would be very easy to retire on your amount of money provided you are not very sick, you are good with controlling your expenditures, and you can protect your capital.

and you can also see that this i a typical "milkmaid calculation" because inflation is not taken into consideration.

assuming

-an inflation rate of 5% the present 179,250 will have a purchase power of 23,000 Baht after 40 years

-inflation rate 6% = purchase power 15,000 Baht

-inflation rate 7% = purchase power 9,800 Baht (salary and perks of my wife's thai driver).

edited for addendum:

purchasing an annuity in the present absolutely low interest rate environment would be the most *^%%$@$* thing anybody can think of!

Edited November 6, 2010 by Naam

[nong38]

Annuties are not worth a monkeys w===. I took out a Portfolio Bond and a Distrution Bond 3 years ago with a little nest egg I had built up, the advatage of these products was that should anything happen to me the residue can be claimed into a will. Since I took them out they lost a lot of value due to global economic factors, now we are back to where we started. Now when I am ready I can claim up tp 5% a year tax free, orth a thought, There are many options to think about on where to put your capital, then you will need to consider as you have ben reminded of those x factors, inflation and exchange rates. No one knows what the future will bring, you can guess, you can make allowances.

You just dont know what you dont know.

You can make allowances and live well here, just think about it and remember there is a wealth of free information right here on this site.

[FritsSikkink]

!.5 million US$, is 45,000,000 THB. If you spent 30,000 baht a month to live( you can live decently on that, many teachers do). 1 year is 360,000 THB, 3 years is 1,200,000 THB. so if you have 45,000,000 baht you have enough money to live a modest live for the next 35-37 years. If you doubled your montly spending to 60,000 baht(that would be a great life). You would have enough money to live for another 20-22 years and never have to work. Do the math it's a no brainer. You said your in your early fifties. Your life expectancy is another 20 - 25 years. You got enough money now to just get a retirement visa here in Thailand and just chill. I wouldn't consider this a mid life crisis. This is something to celebrate.

Do the math it's a no brainer

360000 x 35 = 12600000

45000000 gives you 125 years on 30K a month

[pluto_manibo]

!.5 million US$, is 45,000,000 THB. If you spent 30,000 baht a month to live( you can live decently on that, many teachers do). 1 year is 360,000 THB, 3 years is 1,200,000 THB. so if you have 45,000,000 baht you have enough money to live a modest live for the next 35-37 years. If you doubled your montly spending to 60,000 baht(that would be a great life). You would have enough money to live for another 20-22 years and never have to work. Do the math it's a no brainer. You said your in your early fifties. Your life expectancy is another 20 - 25 years. You got enough money now to just get a retirement visa here in Thailand and just chill. I wouldn't consider this a mid life crisis. This is something to celebrate.

Do the math it's a no brainer

360000 x 35 = 12600000

45000000 gives you 125 years on 30K a month

$1.5 million is worth +/- 45,000,000 Baht now, however it could be worth 25 baht/$1 in a couple of months, this would equal Baht37,500,000....other factors to take into consideration are; inflation, medical/life insurance/ rent vs buying/ more free time(therefore more inclined to spend)etc... I wouldn't want to live on 30k a month. I don't think that anyone who wouldn't have to, would like it. I know it is possible, but it is far from being comfortable...I still think you could easily retire by investing wisely, budgeting for the first few years and planning for the future. It is an ample amount to work with and live a comfortable life, just spend and invest wisely, especially in the beginning. Your financial plan should be varied and flexible, by this I mean you should invest in varied financial instruments..bonds, stock, funds, fx etc...spread it out to cover volatility and market trend. Choose a low cost country with all your necessities and do not spend most of your free time in bars and you should be fine.

[ThaiRich]

!.5 million US$, is 45,000,000 THB. If you spent 30,000 baht a month to live( you can live decently on that, many teachers do). 1 year is 360,000 THB, 3 years is 1,200,000 THB. so if you have 45,000,000 baht you have enough money to live a modest live for the next 35-37 years. If you doubled your montly spending to 60,000 baht(that would be a great life). You would have enough money to live for another 20-22 years and never have to work. Do the math it's a no brainer. You said your in your early fifties. Your life expectancy is another 20 - 25 years. You got enough money now to just get a retirement visa here in Thailand and just chill. I wouldn't consider this a mid life crisis. This is something to celebrate.

Do the math it's a no brainer

360000 x 35 = 12600000

45000000 gives you 125 years on 30K a month

Opp's f'd up the math. But anyway, the point being, he has enough money to be ok just keeping his money in a regular savings account. WIthout risky investments.