What To Do With Monthly Savings?

[malcolminthemiddle]

If this monthly saving is money you don't need access to in the medium term, then I recommend the Sin Mattaya monthly fixed saving a/c. Its a fixed account that requires monthly feeding - you determine how much to put in from the beginning, and then each month put in the same amount. It comes in terms of 2, 3, 4 and 5 years and is currently paying 3.5% for the 3 year option. ...................

What bank are you using? I like this option because I need someplace to hold emergency cash in Thailand that is very liquid, ....................

I wouldn't call a fixed term account with a minium of 2 years very liquid?

From Teach Me Finance: liquid assets -- the total amount of funds that are in the form of cash or can quickly be converted to cash. These include (1) cash; (2) demand deposits; (3) time and savings deposits; and (4) investments capable of being quickly converted into cash without significant loss, either through their sale or through the scheduled return of principal at the end of a short time remaining to maturity.

From Teach Me Life - Very liquid assets --- the total amount of liquid assets on call.

[Furbie]

Furbie, on Today, 11:25 , said: Currency is one of the worst possible investments - it is speculation at its worst.

right you are! my stupid speculative investments in different currencies which i started 35 years ago and in which i invest till this very day (presently 11 different currencies) has caused a lot of hardship, id est i couldn't enjoy working till regular retirement age which i reached 2 years ago but was forced to retire 22 years ago.

oh boy! how i hated these years without a job, lazing at the pool, reading books to fight boredom, lusting for the boobs and the butt of my Mrs, travelling to dozens of different countries and envying those of my friends who were lucky being able to work. but i can't be blamed... i don't have a master's in economics.

Go ahead, speculate on currency (or delude yourself and call it diversification) it’s your money. You can put it all on 15 and have a really good return as well, unless you’re wrong. There was a time when the THB was 26 to 1 USD, then it 56, now it’s 30. Remember when the SGD crashed? Latin America went bust too. How did the Yen do after its highs?

To be blunt, you have no chance to predict currency fluctuations - countries can’t do it, corporations can’t do it, professional currency traders can’t do it and you can’t do it. If you’re making out, good for you – if someone did not win the lottery every week, no one would buy a ticket.

[Furbie]

"12 years ago studying for my Masters and they were predicting the dollar's demise – and if you read back further they still said the same thing. It has not happened yet. And if you really think the AUD of SGD is the world reserve currency of the future, good luck to you. My money is invested where I plan to spend the bulk of it it. If the USD economy goes down for the count, what do you think will happen to everyone else?"

Twelve year ago [July 1 1999] the Aussie dollar was worth 0.647 US and is now at 1.075 US, the New Zealand Dollar was worth 0.529 US today it is worth 0.85 US. So I know where I would prefer to have my $. But then maybe you don't think a 60% drop is significant.

Its not a question of significance - the dollar has lost value vs many currencies, or has the NZD been undervalued and corrected itself, or has it now become overvalued? But more importantly, what's a NZD dollar mean to me? Now, or especially in 10 years? How could I predict what it would be against the THB or the USD or the Euro - you simply can't.

When you are in these economies, unless it’s an outright crash, these fluctuations makes little difference. But if you are outside and put your money into NZD at 5% interest, and the currency loses value at a time when you need the money back, you will lose principle – what’s the point of a 5% return minus the interest you could get locally for risking the principal. Do the math, add in the transfer fees, the interest differential and then look at the potential risk. It defies logic to chase such a small return at such a high risk.

[Naam]

"12 years ago studying for my Masters and they were predicting the dollar’s demise – and if you read back further they still said the same thing. It has not happened yet. And if you really think the AUD of SGD is the world reserve currency of the future, good luck to you. My money is invested where I plan to spend the bulk of it it. If the USD economy goes down for the count, what do you think will happen to everyone else?"

Twelve year ago [July 1 1999] the Aussie dollar was worth 0.647 US and is now at 1.075 US, the New Zealand Dollar was worth 0.529 US today it is worth 0.85 US. So I know where I would prefer to have my $$. But then maybe you don't think a 60% drop is significant.

there are a lot more examples which makes an investor, espically if non-US domiciled, shy away from investing in USD. just look at USDJP¥, USDSGD, USDBRL, USDCHF and half a dozen other currencies which are bought by speculators like me and which appreciated 30 to 50% vs. USD during the last five years

disclaimer:

i hold USD too but in these cases i demand a double digit yields!

-PdVSA ISIN USP7807HAK16

-Provincia de Buenos Aires ISIN XS0290125391

Edited July 21, 2011 by Naam

[Furbie]

12DrinkMore, I am getting all kinds of errors trying to reply to your reply. So I am answering you below.

First, I did put words in your mouth when I went with the reserve currency. Sorry about that, but I was trying to emphasize my point. For the foreseeable future, USD will be the reserve currency and a good currency to hold if you are from a country with a weak currency. But most people on the Board will be from a western country and should not need anything more than two currency diversification – where they are from and where they live or plan to retire.

I never said put all your assets in Thailand, but to protect against exchange rate, you need money here. It just makes sense. Look how many left Thailand after the THB got too strong. If you’re willing to leave, great. If you’ve got a wife kids and home, it may be tougher to do that.

Thailand’s gain against the dollar is nice – especially as I earn THB. I don’t think it will go on forever, but I’m hoping for 10 more years. The problem is, there is no way to predict this. People were touting the Euros gain a while ago as evidence of the USD demise – what about now?. Currencies fluctuate. That’s why they are very risky. An international mutual fund portfolio is a good way to protect yourself against currency risk and takes out the guess work.

[Naam]

Go ahead, speculate on currency (or delude yourself and call it diversification) it’s your money. You can put it all on 15 and have a really good return as well, unless you’re wrong. There was a time when the THB was 26 to 1 USD, then it 56, now it’s 30. Remember when the SGD crashed? Latin America went bust too. How did the Yen do after its highs?

To be blunt, you have no chance to predict currency fluctuations - countries can’t do it, corporations can’t do it, professional currency traders can’t do it and you can’t do it. If you’re making out, good for you – if someone did not win the lottery every week, no one would buy a ticket.

did it ever occur to you that not only one can buy currencies but one can sell too? are you aware that the ¥EN reached its high today? of course nobody can predict exchange rates and i was always one who argued in this section i wouldn't dare to make any prediction which goes beyond a couple of hours when "eggburts" rendered here their mostly wrong and based on wishful thinking opinions.

true, most of Latin America went bust more than 20 years ago. but does that change the fact that it took end of 2002 BRL 4 (Brazilian Real) to buy USD 1 and today it takes BRL 1.56? not to talk about a multiple BRL yield vs USD. are you aware that Brazil is a net creditor? how does that compare with USD 14 trillion federal debt?

yes, SGD crashed in 1995/96 but the fact remains that USD lost nearly 60% vs. SGD since 1990.

i don't encourage newbies to invest in a variety of currencies because most of them can't act being shackled with fixed deposits unable to act. all i do is list some undeniable facts which are the bread and butter of an experienced and successful global investor. delusion is when one believes stubbornly in dogmas... like you do.

[Furbie]

Go ahead, speculate on currency (or delude yourself and call it diversification) it's your money. You can put it all on 15 and have a really good return as well, unless you're wrong. There was a time when the THB was 26 to 1 USD, then it 56, now it's 30. Remember when the SGD crashed? Latin America went bust too. How did the Yen do after its highs?

To be blunt, you have no chance to predict currency fluctuations - countries can't do it, corporations can't do it, professional currency traders can't do it and you can't do it. If you're making out, good for you – if someone did not win the lottery every week, no one would buy a ticket.

did it ever occur to you that not only one can buy currencies but one can sell too? are you aware that the ¥EN reached its high today? of course nobody can predict exchange rates and i was always one who argued in this section i wouldn't dare to make any prediction which goes beyond a couple of hours when "eggburts" rendered here their mostly wrong and based on wishful thinking opinions.

true, most of Latin America went bust more than 20 years ago. but does that change the fact that it took end of 2002 BRL 4 (Brazilian Real) to buy USD 1 and today it takes BRL 1.56? not to talk about a multiple BRL yield vs USD. are you aware that Brazil is a net creditor? how does that compare with USD 14 trillion federal debt?

yes, SGD crashed in 1995/96 but the fact remains that USD lost nearly 60% vs. SGD since 1990.

i don't encourage newbies to invest in a variety of currencies because most of them can't act being shackled with fixed deposits unable to act. all i do is list some undeniable facts which are the bread and butter of an experienced and successful global investor. delusion is when one believes stubbornly in dogmas... like you do.

Your ability to go back and pick the highest and lowest points for USD exchange rates is awe inspiring, especially with the USD so low now. You sound ever better than those financial services guys who call me all the time promising 20-30% return with little risk. I always wonder why they’re not on their yacht instead of racking up 15,000 posts on Thai visa. I would imagine tracking global currencies like that would be a significant time commitment for them. But since these types of “investors” make their money off of fees and commissions, I guess it’s irrelevant.

Of course, the OP in this case is talking about small extra monthly cash investments. So, having him put that in bank account in Australia when he does not live there or plan to retire there is a risk not worth the small reward, given the alternatives, especially when you factor in the cost of getting the money there and back.

But, just so you don’t think I’m backtracking from my dogma as you call it, I’ll stick with my vanilla, no-load, low fee, indexed mutual funds. For those of us who have to work for a living and save up for our retirement instead of kicking it on their yacht and watching their money make 30%, we prefer the fact that, historically, indexed investing has had the highest success for the long-term investor. So I’ll stick to my dogma as you call it and avoid the easy to be had 30% ROI’s that currency trading can bring me. I’m just stubborn that way.

[12DrinkMore]

12DrinkMore, I am getting all kinds of errors trying to reply to your reply. So I am answering you below.

First, I did put words in your mouth when I went with the reserve currency. Sorry about that, but I was trying to emphasize my point. For the foreseeable future, USD will be the reserve currency and a good currency to hold if you are from a country with a weak currency. But most people on the Board will be from a western country and should not need anything more than two currency diversification – where they are from and where they live or plan to retire.

I never said put all your assets in Thailand, but to protect against exchange rate, you need money here. It just makes sense. Look how many left Thailand after the THB got too strong. If you're willing to leave, great. If you've got a wife kids and home, it may be tougher to do that.

Thailand's gain against the dollar is nice – especially as I earn THB. I don't think it will go on forever, but I'm hoping for 10 more years. The problem is, there is no way to predict this. People were touting the Euros gain a while ago as evidence of the USD demise – what about now?. Currencies fluctuate. That's why they are very risky. An international mutual fund portfolio is a good way to protect yourself against currency risk and takes out the guess work.

I agree that currencies are notoriously fickle. But by putting in a lot of homework and studying the fundamentals or 'facts" as Naam would term them, it is possible to take a reasonably good medium to long term position. There will be ups and downs, but the fundamentals remain and will prevail in the end.

And a mutual fund portfolio? Not for me, after purchase, selling and management costs a big chunk of the gain has already been removed. By doing my own homework I feel a lot more secure than having some "financial advisor" talking bullshit, feeding his face and buying expensive cars at my cost.

[Furbie]

12DrinkMore, I am getting all kinds of errors trying to reply to your reply. So I am answering you below.

First, I did put words in your mouth when I went with the reserve currency. Sorry about that, but I was trying to emphasize my point. For the foreseeable future, USD will be the reserve currency and a good currency to hold if you are from a country with a weak currency. But most people on the Board will be from a western country and should not need anything more than two currency diversification – where they are from and where they live or plan to retire.

I never said put all your assets in Thailand, but to protect against exchange rate, you need money here. It just makes sense. Look how many left Thailand after the THB got too strong. If you're willing to leave, great. If you've got a wife kids and home, it may be tougher to do that.

Thailand's gain against the dollar is nice – especially as I earn THB. I don't think it will go on forever, but I'm hoping for 10 more years. The problem is, there is no way to predict this. People were touting the Euros gain a while ago as evidence of the USD demise – what about now?. Currencies fluctuate. That's why they are very risky. An international mutual fund portfolio is a good way to protect yourself against currency risk and takes out the guess work.

I agree that currencies are notoriously fickle. But by putting in a lot of homework and studying the fundamentals or 'facts" as Naam would term them, it is possible to take a reasonably good medium to long term position. There will be ups and downs, but the fundamentals remain and will prevail in the end.

And a mutual fund portfolio? Not for me, after purchase, selling and management costs a big chunk of the gain has already been removed. By doing my own homework I feel a lot more secure than having some "financial advisor" talking bullshit, feeding his face and buying expensive cars at my cost.

That’s why you buy an indexed mutual fund, or an indexed ETF. You invest a few thousand at a time with a discount brokerage that charges less than $20 a transaction and you are shape. I would never buy a managed fund. If the fees don’t kill you, the manager’s eventual misstep will – they never beat the market long-term. I have about 6 funds based on an asset allocation strategy that is revised once a year - I do it all myself based upon my strategy.

For example, one of the most popular vanguard index funds VFINX. It has an expense ratio of only .17%. Less if you buy Admiral shares. Historically a 10% return (notice I could have only said 30% in the last year, though true, it would not be representative). You really can’t beat .17% in costs to have access to such a diversified investment.

And while you may have a point about some investors in FX – though I do not agree with it, and especially for most individual investors – I doubt they will make a 30% ROI as some have claimed (not counting one offs).

By the way, a good financial adviser is not about picking the right fund. A good financial adviser is about investment strategy that minimizes risk, maximizes return and legally avoids as much taxation as possible. For example, as an American living overseas, there are very significant tax issues to concern myself with - a financial adviser was needed to help maximize a tax advantage, not pick individual index funds. Any financial adviser should be fee based and certified, not commission based. I will save many times over in tax savings the fee I paid to map this out.

[Luang]

<br />

<br />

<br />12DrinkMore, I am getting all kinds of errors trying to reply to your reply. So I am answering you below.<br /><br />First, I did put words in your mouth when I went with the reserve currency. Sorry about that, but I was trying to emphasize my point.  For the foreseeable future, USD will be the reserve currency and a good currency to hold if you are from a country with a weak currency.  But most people on the Board will be from a western country and should not need anything more than two currency diversification – where they are from and where they live or plan to retire.<br /><br />  I never said put all your assets in Thailand, but to protect against exchange rate, you need money here.  It just makes sense.  Look how many left Thailand after the THB got too strong.  If you're willing to leave, great.  If you've got a wife kids and home, it may be tougher to do that.<br /><br />  Thailand's gain against the dollar is nice – especially as I earn THB.  I don't think it will go on forever, but I'm hoping for 10 more years.  The problem is, there is no way to predict this.  People were touting the Euros gain a while ago as evidence of the USD demise – what about now?.  Currencies fluctuate.  That's why they are very risky.   An international mutual fund portfolio is a good way to protect yourself against currency risk and takes out the guess work.<br />

<br />I agree that currencies are notoriously fickle. But by putting in a lot of homework and studying the fundamentals or 'facts" as Naam would term them, it is possible to take a reasonably good medium to long term position. There will be ups and downs, but the fundamentals remain and will prevail in the end.<br /><br />And a mutual fund portfolio? Not for me, after purchase, selling and management costs a big chunk of the gain has already been removed. By doing my own homework I feel a lot more secure than having some "financial advisor" talking bullshit, feeding his face and buying expensive cars at my cost.<br />

<br /><br />  <font size="2">That's why you buy an indexed mutual fund, or an indexed ETF.  You invest a few thousand at a time with a discount brokerage that charges less than $20 a transaction and you are shape.  I would never buy a managed fund.  If the fees don't kill you, the manager's eventual misstep will – they never beat the market long-term.  I have about 6 funds based on an asset allocation strategy that is revised once a year - I do it all myself based upon my strategy.<br /></font><br /><br />  <font size="2">For example, one of the most popular vanguard index funds VFINX.  It has an expense ratio of only .17%.  Less if you buy Admiral shares.  Historically a 10% return (notice I could have only said 30% in the last year, though true, it would not be representative).  You really can't beat .17% in costs to have access to such a diversified investment.</font><br /><br />  And while you may have a point about some investors in FX – though I do not agree with it, and especially for most individual investors – I doubt they will make a 30% ROI as some have claimed (not counting one offs).<br /><br /><font size="2">By the way, a good financial adviser is not about picking the right fund.  A good financial adviser is about investment strategy that minimizes risk, maximizes return and legally avoids as much taxation as  possible.  For example, as an American living overseas, there are very significant tax issues to concern myself with - a financial adviser was needed to help maximize a tax advantage, not pick individual index funds.  Any financial adviser should be fee based and certified, not commission based.  I will save many times over in tax savings the fee I paid to map this out. <br /></font><br /><br /><br />

<br /><br /><br />

Wow, well i should have expected to be more confused than i was initially i guess, with such a topic!

I will come back and calmly consider all when the tide has calmed i think.

I do like the 'cut of your jib' though Furbie.

Thanks hugely to all who have contributed to date. Apprecciate your time everyone.

Luang

[Naam]

For those of us who have to work for a living and save up for our retirement instead of...

oops! i should have realised that when "global mutual funds as a hedge" were mentioned. instead i concentrated on the "master's degree" and arrived at wrong conclusions.

i therefore humbly apologise for posting the fact that the YEN is at an all time high vs. US-Dollar as rebuttal to "How did the Yen do after its highs?"

furthermore i apologise for posting the fact that the Brazilian Real gained in excess of 150% (ONE-HUNDRED-FIFTY) vs. US-Dollar as rebuttal to "Latin America went bust".

last not least i apologise for mentioning that the US-Dollar lost nearly 60% vs. SGD since 1990 commenting on "Remember when the SGD crashed?"

:jap:

[Naam]

1. I agree that currencies are notoriously fickle. But by putting in a lot of homework and studying the fundamentals or 'facts" as Naam would term them, it is possible to take a reasonably good medium to long term position. There will be ups and downs, but the fundamentals remain and will prevail in the end.

2. And a mutual fund portfolio? Not for me, after purchase, selling and management costs a big chunk of the gain has already been removed.

3. By doing my own homework I feel a lot more secure than having some "financial advisor" talking bullshit, feeding his face and buying expensive cars at my cost.

1. for the private investor there are two ways to invest in currencies

-the daytrading way using technical analysis as a crutch and staring hours at screens to make some (or with big risk a lot of) bucks,

and

-following a monthly or even year long trend combined with studying the fundamentals before entering.

however, both methods require that the investor can exit at any time with a moderate loss if the market is against him. investing in high yield currencies by establishing long term fixed deposits does not provide that option because forward selling cost causes huge losses.

2. mutual funds are for the newbie or somebody who can't dedicate sufficient time to handle his investments.

3. i refuse to comment on "financial advisers"

[BEENTHEREDONETHAT]

"12 years ago studying for my Masters and they were predicting the dollar's demise – and if you read back further they still said the same thing. It has not happened yet. And if you really think the AUD of SGD is the world reserve currency of the future, good luck to you. My money is invested where I plan to spend the bulk of it it. If the USD economy goes down for the count, what do you think will happen to everyone else?"

Twelve year ago [July 1 1999] the Aussie dollar was worth 0.647 US and is now at 1.075 US, the New Zealand Dollar was worth 0.529 US today it is worth 0.85 US. So I know where I would prefer to have my $. But then maybe you don't think a 60% drop is significant.

Its not a question of significance - the dollar has lost value vs many currencies, or has the NZD been undervalued and corrected itself, or has it now become overvalued? But more importantly, what's a NZD dollar mean to me? Now, or especially in 10 years? How could I predict what it would be against the THB or the USD or the Euro - you simply can't.

When you are in these economies, unless it's an outright crash, these fluctuations makes little difference. But if you are outside and put your money into NZD at 5% interest, and the currency loses value at a time when you need the money back, you will lose principle – what's the point of a 5% return minus the interest you could get locally for risking the principal. Do the math, add in the transfer fees, the interest differential and then look at the potential risk. It defies logic to chase such a small return at such a high risk.

Predicting anything financial out ten years is a crap shoot. But to bury your head in the sand when it is very likely that currency will drop, just because you use that currency does not make much sense to me. I live part time in the US but have very little money there for many reasons. Being unable to predict what will happen to the country and the currency coupled with a lousy return on investment. I will leave it where it earns what I consider a reasonable return, with minimal looking after. I also live in Thailand and hold enough there to satisfy immigration but not for investing and making a return on it. When I need it I bring it in. My money in NZ is making 8.7%, locked it in for 5 years.

I did the math , the transfer fees are insignificant as I don't transfer funds often and rarely in small amounts the interest differential is a reasonable amount, a solid 8.7% beats anything I can find in LOS or the USA. You talk of high risk and you invest in the USA, perhaps you haven't been watching the news, but it is hard to consider the US a low risk at this time. And lets face it Thailand is not the most stable country around. If I were the OP I would consider putting part of my monthly investment into gold, and I'm no gold bug.

[Furbie]

I am going to recommend two books for anyone on TV to read, which busts many of investments strategies proposed by people here. Some of the key elements of these books are managing risk and return (asset allocation), and more importantly, minimizing the costs of investing (something too many people who sell financial services want you to overlook).

1. The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between by William J. Bernstein.

2. All About Asset Allocation by Richard A. Ferri, CFA

I suggest these to anyone who has not made up their mind on how to save and invest (though some of their advice is targeted at US citizens). They present excellent strategies for the beginning or the experienced investor. We may have some experts on TV who can point (in hindsight) to some amazing gains – maybe they got in front of the trend are able to do so consistently, or maybe they just like pointing to (now) 30-40% ROI while posting away all day on TV. I went to school with some people who became currency traders, they were some of the busiest people I know and the most stressed.

Anyway, to the OP and those on TV – please read these book recommendations. They may save you from a lot of heartache in the future. As I am sure you have heard, if a deal sounds too good to be true, then it probably is.

On that, feel free to continue your potshots. I will stick to managing my risk and reward effectively, while keeping my investment costs low, and especially working with people a lot smarter than me who specialize in keeping my investment money in my pocket and out of the governments. Cheers.

[Furbie]

<br />

<br />

<br />12DrinkMore, I am getting all kinds of errors trying to reply to your reply. So I am answering you below.<br /><br />First, I did put words in your mouth when I went with the reserve currency. Sorry about that, but I was trying to emphasize my point. For the foreseeable future, USD will be the reserve currency and a good currency to hold if you are from a country with a weak currency. But most people on the Board will be from a western country and should not need anything more than two currency diversification – where they are from and where they live or plan to retire.<br /><br /> I never said put all your assets in Thailand, but to protect against exchange rate, you need money here. It just makes sense. Look how many left Thailand after the THB got too strong. If you're willing to leave, great. If you've got a wife kids and home, it may be tougher to do that.<br /><br /> Thailand's gain against the dollar is nice – especially as I earn THB. I don't think it will go on forever, but I'm hoping for 10 more years. The problem is, there is no way to predict this. People were touting the Euros gain a while ago as evidence of the USD demise – what about now?. Currencies fluctuate. That's why they are very risky. An international mutual fund portfolio is a good way to protect yourself against currency risk and takes out the guess work.<br />

<br />I agree that currencies are notoriously fickle. But by putting in a lot of homework and studying the fundamentals or 'facts" as Naam would term them, it is possible to take a reasonably good medium to long term position. There will be ups and downs, but the fundamentals remain and will prevail in the end.<br /><br />And a mutual fund portfolio? Not for me, after purchase, selling and management costs a big chunk of the gain has already been removed. By doing my own homework I feel a lot more secure than having some "financial advisor" talking bullshit, feeding his face and buying expensive cars at my cost.<br />

<br /><br /> <font size="2">That's why you buy an indexed mutual fund, or an indexed ETF. You invest a few thousand at a time with a discount brokerage that charges less than $20 a transaction and you are shape. I would never buy a managed fund. If the fees don't kill you, the manager's eventual misstep will – they never beat the market long-term. I have about 6 funds based on an asset allocation strategy that is revised once a year - I do it all myself based upon my strategy.<br /></font><br /><br /> <font size="2">For example, one of the most popular vanguard index funds VFINX. It has an expense ratio of only .17%. Less if you buy Admiral shares. Historically a 10% return (notice I could have only said 30% in the last year, though true, it would not be representative). You really can't beat .17% in costs to have access to such a diversified investment.</font><br /><br /> And while you may have a point about some investors in FX – though I do not agree with it, and especially for most individual investors – I doubt they will make a 30% ROI as some have claimed (not counting one offs).<br /><br /><font size="2">By the way, a good financial adviser is not about picking the right fund. A good financial adviser is about investment strategy that minimizes risk, maximizes return and legally avoids as much taxation as possible. For example, as an American living overseas, there are very significant tax issues to concern myself with - a financial adviser was needed to help maximize a tax advantage, not pick individual index funds. Any financial adviser should be fee based and certified, not commission based. I will save many times over in tax savings the fee I paid to map this out. <br /></font><br /><br /><br />

<br /><br /><br />

Wow, well i should have expected to be more confused than i was initially i guess, with such a topic!

I will come back and calmly consider all when the tide has calmed i think.

I do like the 'cut of your jib' though Furbie.

Thanks hugely to all who have contributed to date. Apprecciate your time everyone.

Luang

Luang, Thanks. I suggest you read the books I mentioned above. They are available in Thailand.

[kurnell]

My missus is telling me her Thai term deposit pays over 4%

Great info that we can all use.

Maybe you could tell us which bank and which term deposit?

Yes I can. She just sent me details. 4.1%. I am off to the bank this weekend to take advantage.

Jeeze,

Well come on then, spill the beans.

Just tell us where this offer is available, stop keeping it all to yourself, there aere others who may be interested in a slice.

I have never tried investing in beans. Is it profitable?

[SICHONSTEVE]

Bear in mind that the bank savings options listed here will keep your money safe but basically earn you nothing given the inflation rate in thailand and australia.

If you want to actually make a proffit- stocks are the way to go- read up, research and start playing the market.

Stocks in what market??

[SICHONSTEVE]

My missus is telling me her Thai term deposit pays over 4%

I have never tried investing in beans. Is it profitable?

Coffee beans can be!!!

[Tanaka]

Noone mentioned gold. If you bought gold bars, say early last year, they would have increased their value by over 25% now. Good return.

[rafish]

Unless the OP is an Aussie like you, this is a high risk investment due to the currency risk. For the extra couple of percent interest, it is not worth it unless you need to use Aussie dollars. As an American, I deal only in two currencies, USD (long term savings) and THB (short term savings) - I would have hedged more and have some long-term savings in Thailand, but the US government makes it more difficult every day with the tax implications. A Birt would be well advised to use GBP and THB, etc.. Chasing savings rates in currencies you will not use is very dangerous if you should need those funds and the exchange rate goes against you.

I ain't no Aussie mate! I'm a Birt (sic).

Unless you are convinced that the Bernank and your frustrated Tim have your personal interest at heart and will act to ensure that the USD reverses its long decline and zero return, I suggest that not to diversify in currencies is the worst possible plan. If I had steadfastly support Merv and the Squib over the years, I would now be very considerably worse off.

Over the years moving between the AUD, SGD, CHF,EUR, USD, AG and AU and of course our utterly overvalued (but not IMO) THB have provided excellent stability and sheltered me from the lunatics running the shows over in Euroland, UK and US.

And I do not see any change in US policies coming along anytime soon. ZIRP, QE and more UST's to fund the deficits will continue to send the USD further down. Confiscating even more of your personal wealth, as Greenspan said.

Currency is one of the worst possible investments - it is speculation at its worst. Ask any company that got destroyed or nearly destroyed during the financial crisis because they borrowed in USD and had to pay back in THB.

There is no reason whatsoever to diversify currency beyond where you live and where you plan to retire for ex-pats (unless you're in the Philippines or someplace similar). Any non-commission based financial planner will tell you this (or else run for the hills). It is so risky that companies take out contracts to protect against exchange rate risks when doing business and payment date is set for future dates. To open yourself up to exchange rate risk to earn a couple of points in interest is a bad decision, especially as part of a long-term investment plan.

12 years ago studying for my Masters and they were predicting the dollar's demise – and if you read back further they still said the same thing. It has not happened yet. And if you really think the AUD of SGD is the world reserve currency of the future, good luck to you. My money is invested where I plan to spend the bulk of it it. If the USD economy goes down for the count, what do you think will happen to everyone else?

My currency risk is diversified between Thailand and the US, as these are where I live and the two places I will split my retirement. I have further diversification in a global mutual fund as a hedge.

At last sanity! Thanks Furbi.

[CaptHaddock]

There is no reason whatsoever to diversify currency beyond where you live and where you plan to retire for ex-pats (unless you're in the Philippines or someplace similar).

My currency risk is diversified between Thailand and the US, as these are where I live and the two places I will split my retirement. I have further diversification in a global mutual fund as a hedge.

Actually, there is a good reason to diversify currency exposure beyond USD and THB as an American resident in Thailand. The reason is the lack of permanent resident status in Thailand coupled with the lack of convertibility for the THB. These two factors would certainly prevent me from simply converting my USD to THB in the way I would convert to the loonie if I were relocating to Canada, for example. Even if permanent residence were to become available the political instability of Thailand would militate against putting all my eggs in that basket even though doing so would eliminate the currency risk of having assets in one currency and liabilities in another.

So the question is how best to hedge the dollar. May I ask about your allocation by currency? If you plan to live in both Thailand and the US, wouldn't that dictate a 50-50 split or weighted by relative size of liabilities? Is your global mutual fund an equity fund or bonds? If a bond fund, is it one of the few that do not hedge the dollar?

Also, you mention that US tax rules render making THB investments a problem? Other than the reporting requirements for foreign accounts which has no actual tax effect, what is the disadvantage of an investment account in Thailand? I am not interested in investing in Thailand myself, since the US financial markets are much more developed, but I am not aware of such a disadvantage since we are taxed on our worldwide income.

[thetoonarmy]

Bangkok bank have a short term deposit @5% for five months ,Min deposit 200,000 baht . Closes end of this month .

[thetoonarmy]

Bangkok bank have a short term deposit @5% for five months ,Min deposit 200,000 baht . Closes end of this month .

[Furbie]

There is no reason whatsoever to diversify currency beyond where you live and where you plan to retire for ex-pats (unless you're in the Philippines or someplace similar).

My currency risk is diversified between Thailand and the US, as these are where I live and the two places I will split my retirement. I have further diversification in a global mutual fund as a hedge.

Actually, there is a good reason to diversify currency exposure beyond USD and THB as an American resident in Thailand. The reason is the lack of permanent resident status in Thailand coupled with the lack of convertibility for the THB. These two factors would certainly prevent me from simply converting my USD to THB in the way I would convert to the loonie if I were relocating to Canada, for example. Even if permanent residence were to become available the political instability of Thailand would militate against putting all my eggs in that basket even though doing so would eliminate the currency risk of having assets in one currency and liabilities in another.

So the question is how best to hedge the dollar. May I ask about your allocation by currency? If you plan to live in both Thailand and the US, wouldn't that dictate a 50-50 split or weighted by relative size of liabilities? Is your global mutual fund an equity fund or bonds? If a bond fund, is it one of the few that do not hedge the dollar?

Also, you mention that US tax rules render making THB investments a problem? Other than the reporting requirements for foreign accounts which has no actual tax effect, what is the disadvantage of an investment account in Thailand? I am not interested in investing in Thailand myself, since the US financial markets are much more developed, but I am not aware of such a disadvantage since we are taxed on our worldwide income.

CaptHaddoock, I have PM'd you my hedge ratios. The rest I will share with others.

You may have missed part of my earlier point on diversifying currency where you live and plan to retire. It sounds as if you are unsure you will be able to stay permanently in Thailand – in which case, may need to diversify into a third currency. At any rate, a global mutual fund will help offset currency issues, no matter what currency it is denominated it.

For investment advice and tax issues, it's not like I am at a financial adviser every day. I am talking about one time to help set the allocations and targets in a way that maximized tax advantages. I will do it again in five years when my situation is changed. In my opinion, it was money well spent, and I walked away with advice I am free to listen to or ignore, not a bunch of overly expensive commissioned investments.

US tax presents significant issues. I do not like picking individual stocks, as this approach is not well diversified, and if you try to diversify this way, the brokerage fees will cost too much money. Some people do well with this, but most do not. Investing through an overseas brokerage account in individual stocks would be subject to normal US tax rules. However, I am a firm believer in mutual funds, provided they are index and low cost. The problem is, mutual funds are seen as Passive Foreign Investment Company (PFIC) investments by the IRS, meaning (in the opinion of most tax and financial advisers) a US citizen should never invest in this type of investment overseas, as the US tax can eat away the principal. The US government will also soon require other foreign investment stakes to be reported the same way you should report bank accounts – a true hassle. Like most permanent ex-pats, I don't have a 401k. So, I need to make decisions about what funds to keep in my ROTH IRA, how much to have in tax free munis and other bond funds to help hedge against risk while protecting income from tax. The advice to keep REIT funds in particular in my ROTH IRA will be a very important one over time – as REITs are taxed as income, not investment.

You made an interesting point about US financial markets. US citizens have some of the cheapest investment options around. An American should look very hard at the true cost of using overseas brokerages and other investment vehicles, as fees in the US are much cheaper if you look around. Vanguard in particular as excellent low cost options.

[CaptHaddock]

CaptHaddoock, I have PM'd you my hedge ratios. The rest I will share with others.

You may have missed part of my earlier point on diversifying currency where you live and plan to retire. It sounds as if you are unsure you will be able to stay permanently in Thailand – in which case, may need to diversify into a third currency. At any rate, a global mutual fund will help offset currency issues, no matter what currency it is denominated it.

For investment advice and tax issues, it's not like I am at a financial adviser every day. I am talking about one time to help set the allocations and targets in a way that maximized tax advantages. I will do it again in five years when my situation is changed. In my opinion, it was money well spent, and I walked away with advice I am free to listen to or ignore, not a bunch of overly expensive commissioned investments.

US tax presents significant issues. I do not like picking individual stocks, as this approach is not well diversified, and if you try to diversify this way, the brokerage fees will cost too much money. Some people do well with this, but most do not. Investing through an overseas brokerage account in individual stocks would be subject to normal US tax rules. However, I am a firm believer in mutual funds, provided they are index and low cost. The problem is, mutual funds are seen as Passive Foreign Investment Company (PFIC) investments by the IRS, meaning (in the opinion of most tax and financial advisers) a US citizen should never invest in this type of investment overseas, as the US tax can eat away the principal. The US government will also soon require other foreign investment stakes to be reported the same way you should report bank accounts – a true hassle. Like most permanent ex-pats, I don't have a 401k. So, I need to make decisions about what funds to keep in my ROTH IRA, how much to have in tax free munis and other bond funds to help hedge against risk while protecting income from tax. The advice to keep REIT funds in particular in my ROTH IRA will be a very important one over time – as REITs are taxed as income, not investment.

You made an interesting point about US financial markets. US citizens have some of the cheapest investment options around. An American should look very hard at the true cost of using overseas brokerages and other investment vehicles, as fees in the US are much cheaper if you look around. Vanguard in particular as excellent low cost options.

I think all expats in Thailand who do not have permanent residence have to recognize that there is a degree of uncertainty as to whether they will be able to remain in Thailand forever. The Thai government could decide not to renew an annual visa, to increase the financial requirements significantly, to reimpose a health requirement, etc. To say nothing of a change in our own preferences. I don't see signs of such changes now nor do I think they are particularly likely in the future. But there is an irreducible degree of uncertainty that doesn't apply to retirement in your home country. Add that uncertainty to the non-convertibility of THB and there is a small possibility that a retiree could be alienated from his THB assets.

Thanks for the tax info on the PFICs. I was not aware of that, but was not considering a local brokerage account in any case.

[newermonkey]

I never have enough money each month, work like a dog though. So you could pass your excess money on to me, I can take care of it for you, "I am not joking".

:jap:

[meatboy]

Bangkok bank have a short term deposit @5% for five months ,Min deposit 200,000 baht . Closes end of this month .

its 3.5% over 5months, AWAY THE LADS