No wonder people like to shop at Lazada.

[jji23]

Hi All

I'm a teacher here in LOS and receive quite a nice salary. I manage to save about 15,000 - 20,000 baht per month. While this is all well and good going into a savings account, I've started to wonder about the idea of investing it.

I've been doing a bit of researching and like the idea of stocks and shares. I want to open an online account but can't seem to find the right one. I would be a modest investor of say 100 pounds a pop, is this allowed? I know that many brokers run on commission so maybe this is too low. Also I would prefer not to have a broker, ideally I would like an account that I log into search for a company I want to invest in, select amount and bang it's done and vice versa with selling. Is there an account out there that I could open from Thailand?

In the UK I bank with Santander and they do have investment options such as Investment ISA's, and bonds. The thing is they require me to be there to open 1 and an initial 500 pounds investment. Has anyone ever had any experience of investing through high street banks? if so any good?

Perhaps I have over looked other areas I could be investing in?

I welcome all your advice and comments

[Time Traveller]

Try LTF funds. They invest in equities and allow you to deduct the total amount invested in the year off your taxable income up to 15% or 500k. Worthwhile doing if you are in high tax brackets.

[Furbie]

Try LTF funds. They invest in equities and allow you to deduct the total amount invested in the year off your taxable income up to 15% or 500k. Worthwhile doing if you are in high tax brackets.

As mentioned, an LTF is a good idea for you. At 100 pounds a pop you will lose a significant portion in brokerage fees if you try to invest in individual stocks (not to mention the inherent risk of picking individual stocks as opposed to an index fund). Thai bond funds are also a sound investment, even if they offer a lower rate of return - though at your age, you can take more risk. Don’t forget to keep six months of salary in something liquid like a time deposit.

Always remember to check the upfront, on-going and back-end fees for any investment you may make - I would never do anything that had up front of back-end (unless it was a brokerage fee).

Now sit back and wait for the advice to invest in gold and do FX trading, as well as the PMs telling you about expat services in Thailand.

Good luck.

Edited February 2, 2012 by Furbie

[jji23]

Great thanks for the advice. I have noticed that my bank (Bangkok Bank) have LTF's so would most likely do it through them. I just have a couple of questions re the tax and term of investment, my school does all my tax for me so how would this effect me? Also it states that it is fixed for 5 years, what would happen if say I needed to close the account in 3 or 4 years time and go back to the UK?

I have already received a message from somebody trying to sell me an investment guide! LOL

[london]

Time Traveller and Furbie are spot on.

Re the LTF: if you withdraw prior to the 5 years there is a loss of the tax benefit.

My advice though is slightly more conservative. Just keep your money in the bank and a percentage of it in short (3 - 6 month) term deposits.

Why?

At this stage, there are too may clouds on the horizon (Europe, the US) and as you are a novice investor, these are times when even the hardened investor starts to worry.

Wait until things settle down in Europe and the US. It may be a year or two, but at least you will have a good reserve to do something with when the time is right rather than potentially losing say 30 - 50% of your investment.

Oh, IMO, under no circumstances buy individual stocks at 100 pounds a pop. Its too small an investment considering the fees.

[oggie911]

just save your money

[bendix]

just save your money

And that pearl of wisdom is based on what?

He's 25. Now is precisely the time to be investing for his future.

LTFs are - as others have said - the best options. He could either use his bank, or go somewhere specialist like Aberdeen Asset Management who have a wide range of funds. At 25 you can afford to take risks that people twice your age can't.

Actually, I take that back.

THE riskiest way to invest is to 'just save your money' because it is the only investment strategy guaranteed to lose you money on the basis that whatever small levels of interest you get will always be lower than inflation, ergo you lose cash in real terms.

At least with shares, bonds and other asset classes you have a fighting chance of real solid returns over the long term.

People who say investing in cash and savings accounts are the only safe option are completely wrong. They are the only guaranteed unsafe option.

Edited February 3, 2012 by bendix

[fletchsmile]

Great thanks for the advice. I have noticed that my bank (Bangkok Bank) have LTF's so would most likely do it through them. I just have a couple of questions re the tax and term of investment, my school does all my tax for me so how would this effect me? Also it states that it is fixed for 5 years, what would happen if say I needed to close the account in 3 or 4 years time and go back to the UK?

I have already received a message from somebody trying to sell me an investment guide! LOL

I think LTFs are a great way to save. I posted on them on another thread running on LTFS / RMFs. So agree with Furbie and Time Traveller.

Bendix also raises some very important points. Many people overlook the fact that in addition to credit risk on the bank, cash is not risk free for many reasons. The risk that your money doesn't keep pace with inflation or risk that it doesn't provide a level of return that you want or need. At 25 you can also afford to take risks.

What you really need to think is what are you trying to achieve? What returns would be satisfactory? What is your risk tolerance - i.e would you be happy to risk higher returns against capital security. For me age 25, with spare money, the answer would be yes, but it depends on your goals.

Specifically on your additional questions above:

1) If the school does your tax, you should be able to talk to HR and/ or finance and have your salary adjusted so that the tax benefit is paid directly in your salary. See my post on the other thread, about doing 10 months, then getting it back in Nov and Dec salary. Alternatively you can file a tax reclaim after the year end. This is more hassle though, and easier to get your employer to adjust in the year. If you invest Jan - Oct this gives them time to sort

2) You can cash in to access your money within 5 years, but would lose the tax benefit you received, and in addition the value of your capital will have gone up or down..

You mentioned ISAs. One way of thinking about LTFs is they are like a cross between a pension and ISA. They offer tax relief when you take them out like a pension, which an ISA doesn't. They grow free of capital gains like a pension and ISA do. You don't have to leave them as long as you usually do for a pension - only 5 calendar years, but longer than an ISA which you can access immediately. In my view best of both worlds and better than either an ISA or pension.

One disadvantage is they will mainy be Thai based invesments (equities with some fixed income possible). Other mutual funds allow you to diversify into say gold funds, overseas equities, but won't give you the tax credit. So there's a risk you build up a concentration on Thai equities. If you're going to live here long term it's good to have some THb assets, but not necessarily all your money.

My strategy in your shoes (and my own) - invest as much as you can in LTFs (15% salary or 500k max) to get the tax benefit. Invest the remainder in other areas, eg gold funds, emerging market bond funds, overseas equity funds. You've time on your side. After the 5 years is up, you can also consider switching to other funds to diversify - Aberdeen mentioned above offer a good range. Start early, you can also afford to take more risk, and hopefully have the option to retire early.

Edited February 3, 2012 by fletchsmile

[jji23]

fletchsmile, thanks for all the advice.

I'm trying to achieve building up some assets. I'm 25 and don't really have any, which kind of gets me down. So, I guess I would be investing for growth. I'm thinking for growth the higher the risk the better and it seems like I am at a good age to start, but theres that niggling thought of putting in 15% salary for 60 months and coming out down! But they do seem quite secure and after doing a bit of research historically have come out with ok to good returns.

I'm still quite confused re tax. What exactly is the tax benefit? and by paying it directly into my salary do you mean I would receive less tax on my salary? Finally, I read your post on the other thread and noticed you received large lumps in Nov and Dec how does that work? (Are you in fact paying more because of LTF and get it refunded?)

To help, let's say I am thinking of investing 15% of my salary per month (8100 baht)

Thanks

[pauljones]

Furby gives excellent advice.

Invest in diversified index funds and keep your expenses as low as possible.

(Do not try to beat the market, day trade, watch CNBC or take advice from someone selling you something.)

[jji23]

Looks like I'm going to stick 15% of salary into an LTF with Bangkok Bank, I wanted Aberdeen Asset but the branch is rather far away and not open on weekends, would it be worth taking the time off to get it? Furthermore I'm going to put about 10k baht per month into a time deposit with kbank.

How does this sound to everyone? Thank you all for such great advice, I was so content with just keeping my money in the bank before!

[ExpatJ]

Looks like I'm going to stick 15% of salary into an LTF with Bangkok Bank, I wanted Aberdeen Asset but the branch is rather far away and not open on weekends, would it be worth taking the time off to get it? Furthermore I'm going to put about 10k baht per month into a time deposit with kbank.

How does this sound to everyone? Thank you all for such great advice, I was so content with just keeping my money in the bank before!

THe bangkok bank LTF seems like a fair , conservative, investment- but it does have 1.5% ANNUAL management fee on top of othe other fees (mind you the fees are still far lower than HSBC, my bank, charges!).

I began my investing career by using mutual funds as i felt i didnt know enough to invest in stocks directly my self but really disliked the extra fees so i bought some good books and taught myself- if you invest in a diverse set of stocks yourself instead of relying on a mutual fund you can save yourself 2-3% in fees per year which adds up over time.

[GuestHouse]

25 is a great age to start investing with long years ahead of you there is real opportunity for small investments to really grow.

As Expat J advises, it is a good idea to avoid annual charges as these eat your savings and over long term can have a drastic impact.

Again I think Expat J has it right when he suggests buying shares directly. You could for example open a bank account to save your hundred or so a month and then use that to buy a block of shares every 3 or four months, over the years it will mount up. And you are building the habit of regular saving.

I have a "Vantage Fund and Share Account" with Hargreaves and Lansdown, they have very low fees a wide range of funds/equities you can buy into and really good market news and tips. You can open an account on line and be up and running in a matter of minutes.

[lannarebirth]

^{At 25 my advice would be to invest in yourself so that your earning power inceases. You will then be able to invest financially, multiples of what you can now.}

[RAZZELL]

^{At 25 my advice would be to invest in yourself so that your earning power inceases. You will then be able to invest financially, multiples of what you can now.}

Exactly, postgraduate qualifications etc.

RAZZ

[jji23]

25 is a great age to start investing with long years ahead of you there is real opportunity for small investments to really grow.

As Expat J advises, it is a good idea to avoid annual charges as these eat your savings and over long term can have a drastic impact.

Again I think Expat J has it right when he suggests buying shares directly. You could for example open a bank account to save your hundred or so a month and then use that to buy a block of shares every 3 or four months, over the years it will mount up. And you are building the habit of regular saving.

I have a "Vantage Fund and Share Account" with Hargreaves and Lansdown, they have very low fees a wide range of funds/equities you can buy into and really good market news and tips. You can open an account on line and be up and running in a matter of minutes.

Wow thanks for the advice on Hargreaves and Lansdown, it has completely changed my strategy. After doing some research I feel very confident in first saving up 6 months salary in a time deposit, then after that investing around 150 pounds sterling per month into a growth fund for the long term say 20-25 years.

I did also have some doubt (more paranoia) about investing through a Thai bank with regard to penalties, actually getting my money back, making a profit etc, especially when the prospectus' aren't in English.

[samran]

While to offshore investing etc is attractive, you'd be silly to ignore LTF's as you'll get an automatic tax break on your salary which is nothing to be sneezed at. The blue chip Thai assets which they are invested into (PTT, Banpu etc) are very well regarded co's globally.

ING and Aberdeen have all their stuff in english and thai

[jji23]

Well, if someone could explain how the tax works I could be tempted. I'm getting confused is the tax break due after 5 years? Or is it instant?

[Penefattore]

Simply go to the nearest broker office (for example http://www.ktzmico.com/en/home/index.aspx ) , open an online account (30 baht expense for stamp tax) then buy this counter (0.15% commission) http://www.set.or.th/set/companyprofile.do?symbol=MNIT&language=en&country=US and enjoy 8% dividend yield without the absurd fees of mutual funds.