Advice Needed: How You Would Invest 200 K Usd ?

[yourauntbob]

Three little letters ETF (exchange traded funds). You will be susceptible to tax but they will automatically diversify for you and the fees are a fraction of what you pay for mutual funds. There are hundreds of them so you can choose what you want your money in (large cap, bonds, small cap, US, EU, Asia etc) Muni bonds have more risk than what people let on and there is always the chance the government will revoke the tax free status which would send them in a free fall. Most would say that will never happen, but Romney's plan hints at this and Obama makes no apologies for taxing the rich and may turn to it to raise revenue as most Muni's are owned by high income earners. (this is not a political statement, its all on record )

How old are you?

Do you have other income? (pension, job)

What type of return are you reasonably hoping for?

What is your risk tolerance?

The above questions are essential for giving accurate advise. Without more information most of the advise you get is throwing darts as everyone's situation is different.

[canuckoverseas]

200k could buy a duplex in one of many US cities, can then earn at least 5% return in rent.

Sent from my iPad using ThaiVisa app

[Pinot]

Three little letters ETF (exchange traded funds). You will be susceptible to tax but they will automatically diversify for you and the fees are a fraction of what you pay for mutual funds. There are hundreds of them so you can choose what you want your money in (large cap, bonds, small cap, US, EU, Asia etc) Muni bonds have more risk than what people let on and there is always the chance the government will revoke the tax free status which would send them in a free fall. Most would say that will never happen, but Romney's plan hints at this and Obama makes no apologies for taxing the rich and may turn to it to raise revenue as most Muni's are owned by high income earners. (this is not a political statement, its all on record )

• Similar to the ETF offerings, mutual funds that offer access to high-yield debt also track a select basket of low-grade corporate debt. However, the mutual fund offerings take an active approach while HYG and JNK are designed as passive products.
  
• Mutual funds rely on the know-how of their managers, which means higher expense ratios. Mutual fund expense ratios can exceed 1.0% and can incur short-term fees for shares held less than 90 days.
  
• The higher fees don't necessarily mean that the mutual funds pay out lower yields.
  
• Mutual funds lack intraday liquidity, transparency and frequently have investment minimums.
  

I like the fact that Mutual Funds are actively managed. Mutual Funds high yield (junk) bond funds are more stable than the high yield ETFs. Mutual funds may be the better choice for long-term investing due to their total return outperformance.

Spread out your investments whether it's ETFs or Mutual Funds. Diversification lowers risk. Consider JNK and HYG (ETFs), JAHYX, MWHYX and TIYRX (Mutual Funds).

[Jobo]

Re seeking advice from a financial advisor for goodness sake don't use a farang financial advisor who is based in Thailand!!!!!!!!!!

Best advice I've seen. Made the same (expensive) mistake myself.

Care to elaborate further?

[JSixpack]

Re seeking advice from a financial advisor for goodness sake don't use a farang financial advisor who is based in Thailand!!!!!!!!!!

And this coming from a guy, who like to play financial guru here on TV.

To the OP, buy CPNRF. Yielding 7-8% yearly, paid quarterly. Flat tax 10%. Easy to trade as listed on SET, with reasonable daily turnover.

A Thailand property fund. You sure that's a good idea?

Use a stop loss?

[yoshiwara]

Re seeking advice from a financial advisor for goodness sake don't use a farang financial advisor who is based in Thailand!!!!!!!!!!

And this coming from a guy, who like to play financial guru here on TV.

To the OP, buy CPNRF. Yielding 7-8% yearly, paid quarterly. Flat tax 10%. Easy to trade as listed on SET, with reasonable daily turnover.

A Thailand property fund. You sure that's a good idea?

Use a stop loss?

Doesn't always work and adds to cost.

[JSixpack]

Use a stop loss?

Doesn't always work and adds to cost.

Works well w/ widely held cos. and the cost is negligible compared to cost of a crash. Combine w/ moving averages, fairly safe. Want little or no risk and cost, park your funds in a bank and watch inflation eat your principal.

[manhattan55]

It is difficult to give you a good answer without some more information from you. Important variables are the number of years you expect to be drawing income from your capital, and how high your monthly expenses are. Then you need to take inflation into account. With these variables, you can calculate the return on investment that is needed in order to allow you to draw an inflation-adjusted monthly allowance and maintain your capital without depletion. Depending on how risky you are, you may be able to find investments that yield sufficient return to compensate for inflation and the depletion from your monthly withdrawals. Given that you are looking to live off your capital, you are going to have to be fairly cautious with your investment choices. There are some options in uncorrelated assets that can give you high single digit returns. But most likely you will see that it would be very difficult for you to draw income and not deplete your capital over time.

Just to give you an idea what inflation will do to your capital: $200,000 today would need to grow to $361,222 in 20 years' time, assuming an average 3% p.a. inflation, just to maintain today's purchasing power. Assuming you withdraw $12,000 annually (about THB 30,000 per month) as a living expense, that $12,000 would need to grow to $21,673 annually, just to keep up with inflation. You can imagine, how quickly your capital could be depleted.

[richard10365]

If I had that much money I would use the treaty of amity and open a coffee shop.

[yoshiwara]

Use a stop loss?

Doesn't always work and adds to cost.

Works well w/ widely held cos. and the cost is negligible compared to cost of a crash. Combine w/ moving averages, fairly safe. Want little or no risk and cost, park your funds in a bank and watch inflation eat your principal.

It is possible to be hit on market openings at a point greater than your stop loss ie a crash.

[manarak]

Use a stop loss?

Doesn't always work and adds to cost.

Works well w/ widely held cos. and the cost is negligible compared to cost of a crash. Combine w/ moving averages, fairly safe. Want little or no risk and cost, park your funds in a bank and watch inflation eat your principal.

It is possible to be hit on market openings at a point greater than your stop loss ie a crash.

Very true, and in addition to that, there are also trade suspensions and other events which can cause all stops in the system to be erased.

Also, the price ticks are not continuous, in a fast market, your stop could be triggered, but the resulting market order could under some circumstances well be executed 200 ticks lower.

[yoshiwara]

Very true, and in addition to that, there are also trade suspensions and other events which can cause all stops in the system to be erased.

Also, the price ticks are not continuous, in a fast market, your stop could be triggered, but the resulting market order could under some circumstances well be executed 200 ticks lower.

Throw in getting taken out by a violent spike.

[Naam]

Very true, and in addition to that, there are also trade suspensions and other events which can cause all stops in the system to be erased.

Also, the price ticks are not continuous, in a fast market, your stop could be triggered, but the resulting market order could under some circumstances well be executed 200 ticks lower.

or no execution when (as in 2008) liquidity of an asset is similar to a granite rock no matter how low your stop-loss is set.

[yoshiwara]

Consult a financial advisor. The first questions asked are your family situation, your age and most importantly your tolerance for risks.

The trouble with financial advisors, particularly and especially in Thailand is that they will try to sell you products which maximise their upfront commissions which will pay out to them on your purchase of bonds or any other financial instrument. What you are doing is paying someone to think for you and that is the biggest risk of them all. Investors want what they can't have which is higher interest rates and low risk. Advisors can offer to square the circle but no 'hab. Investors make the mistake of thinking that the advisor has inside knowledge and so get led by the nose.

[manarak]

Assuming you are a US citizen, Tax free and AMT free muni bonds will keep the IRS at bay. I have several hundred thousand in a combination of both. Averaging over all about 4.5% now. A decent part of my portfolio. Netting me about 9,000 USD a year. Relatively risk free. If you want higher returns, and more risk (probably), then buy some REITs. ARR, NLY, FMY. They return 10% and 15%. Of course you will be taxed on that. In between there are some decent dividend paying stocks. This approach generates income. If you want capital gains, well, good luck trading, buy some stocks. You coulds ell some Covered Call Options ( I do) along the way against the stock shares you own. Other than that, $200 K USD is not going to generate enough money to live on for too many years. All depens on how much you spend and how low you are willing to live. People certainly can do it.

Currently, I'd invest it in gold, with 300% leverage if you can afford to lose that money.

Resell at 10% higher if the economic situation doesn't change much and hold on it for longer if news from Europe, US and China worsen.

Yes, and if you had gone for that gamble a year ago you would have by now lost over 30%. Well done that advisor.

Assuming $200k is your total life savings and you have no other income? no pension, no job?

Actually a pretty borderline situation. Let us assume you can place the money on deposit in a Thai bank and get 4%.

That will give you $8000 per year (ignoring tax, can we?)

That's ~ 8k * 30 = 240,000 baht per year.

That's 20,000 baht per month.

Can be done, but subject to shocks depleting the capital, and no permanent relationship.

Slightly hand to mouth.

On the other hand you can go out in a blaze of glory and then top yourself.

yeah... gamble mamble

but in the meanwhile, I gave a tradable answer to OP, and on the 28th gold closed around 1656 USD and at 1686 USD on friday.

200k with 300% leverage would have netted about 10800 USD.

I expect that trend to go on, and if Bernanke "helps the economy" a bit more, the gold price could very well shoot up to 1800 or 1900.

But I agree that "investing" is not "saving", i.e. such investment is not to earn interest over a long period of time, but rather to walk away with a profit when the time is right. It's not for everyone.

Edited September 2, 2012 by manarak

[yoshiwara]

Assuming you are a US citizen, Tax free and AMT free muni bonds will keep the IRS at bay. I have several hundred thousand in a combination of both. Averaging over all about 4.5% now. A decent part of my portfolio. Netting me about 9,000 USD a year. Relatively risk free. If you want higher returns, and more risk (probably), then buy some REITs. ARR, NLY, FMY. They return 10% and 15%. Of course you will be taxed on that. In between there are some decent dividend paying stocks. This approach generates income. If you want capital gains, well, good luck trading, buy some stocks. You coulds ell some Covered Call Options ( I do) along the way against the stock shares you own. Other than that, $200 K USD is not going to generate enough money to live on for too many years. All depens on how much you spend and how low you are willing to live. People certainly can do it.

Currently, I'd invest it in gold, with 300% leverage if you can afford to lose that money.

Resell at 10% higher if the economic situation doesn't change much and hold on it for longer if news from Europe, US and China worsen.

Yes, and if you had gone for that gamble a year ago you would have by now lost over 30%. Well done that advisor.

Assuming $200k is your total life savings and you have no other income? no pension, no job?

Actually a pretty borderline situation. Let us assume you can place the money on deposit in a Thai bank and get 4%.

That will give you $8000 per year (ignoring tax, can we?)

That's ~ 8k * 30 = 240,000 baht per year.

That's 20,000 baht per month.

Can be done, but subject to shocks depleting the capital, and no permanent relationship.

Slightly hand to mouth.

On the other hand you can go out in a blaze of glory and then top yourself.

yeah... gamble mamble

but in the meanwhile, I gave a tradable answer to OP, and on the 28th gold closed around 1656 USD and at 1686 USD on friday.

200k with 300% leverage would have netted about 10800 USD.

I expect that trend to go on, and if Bernanke "helps the economy" a bit more, the gold price could very well shoot up to 1800 or 1900.

But I agree that "investing" is not "saving", i.e. such investment is not to earn interest over a long period of time, but rather to walk away with a profit when the time is right. It's not for everyone.

Circumstances, circumstances, circumstances.

Would you really advise someone with 200k to their name (and that's it) and is going to have to live on it...

Would you really get them trading in gold? Surely you would advise a friend not to do it?

[seasia]

Give Thailand a miss and go live in Cambodia.

You can put your money in a USD account with any of the big banks in Phnom Phen and get circa 7 to 8% per annum at call. If you open an account in the local currency you will get 11%. That would equate to 14 to 15K USD per year income- on which you could live like a lord in a location such as Kampot.

You will also find it much easier to start a small business or get a job in Cambo. The paperwork required to pursue either of these options is now rather absurd in Thailand.

No doubt lots of TV posters will tell you what a huge risk the Cambodian banks are. But the same blokes probably haven't put their minds to the risks that could assail their Thai bank accounts when the unmentionable suddenly occurs.

Hi

Is there any chance of a link or a lead to a Cambodian based bank paying 7-8 % on call US$ accounts ?

I can find 7 % on KMR time deposit and 4.25 on US $ time deposit but not 7-8 % on US $ call accounts.

Thank You.

[swissie]

Best way to go is: Marry a Thai-Lady and buy a Bar in Pattaya. The lady will run the Bar for you and all you have to do is collect the daily cash- influx and live a happy live.

This is the success-story of thousands of foreign investors in Thailand.

No, seriously: There are dozends of books available that describe the pitfalls and dangers that engulf every forieign investor in Thailand. Read some of them, before you even dream of investing a single rusty dime in Thailand. OR: Live here for 6 months or so, to get familiar with "how the clocks tick here in Thailand", before you invest anything here at all.

200'000 $ as a capital base, without a steady stream of monthly income from "outside of Thaland" will not go far (even at 4% interest). Unfortunately, the days when 200 000 $ were a fortune here are long gone.

This is to say that 200 000 $ these days in Thailand will not make heads turn anymore like it did some 15 years ago. But there are countries where 200 000 $ is still a lot of money: Cambodia, Laos and shortly Myanmar, But this is not for everyone, since the "comfort-level" as far as hotels, hospitals, and other anemities that are readily available in Thailand are simply not there (yet).

Cheers.

[manarak]

yeah... gamble mamble

but in the meanwhile, I gave a tradable answer to OP, and on the 28th gold closed around 1656 USD and at 1686 USD on friday.

200k with 300% leverage would have netted about 10800 USD.

I expect that trend to go on, and if Bernanke "helps the economy" a bit more, the gold price could very well shoot up to 1800 or 1900.

But I agree that "investing" is not "saving", i.e. such investment is not to earn interest over a long period of time, but rather to walk away with a profit when the time is right. It's not for everyone.

Circumstances, circumstances, circumstances.

Would you really advise someone with 200k to their name (and that's it) and is going to have to live on it...

Would you really get them trading in gold? Surely you would advise a friend not to do it?

I will tell the friend what the risks are and let him decide for himself if he wants to follow my trading or not.

That's it.

I will never advise something I wouldn't trade myself. I think that is the best of guarantees for genuine advice.

And sometimes advice is genuine, but wrong.

There is no way to guarantee profits, and nowadays the best risk free interest is 3.5% in baht or a bit more in AUD.

I made my 20k friday, I may lose them again some other day when I take some crap decision.

[ExpatJ]

yeah... gamble mamble

but in the meanwhile, I gave a tradable answer to OP, and on the 28th gold closed around 1656 USD and at 1686 USD on friday.

200k with 300% leverage would have netted about 10800 USD.

I expect that trend to go on, and if Bernanke "helps the economy" a bit more, the gold price could very well shoot up to 1800 or 1900.

But I agree that "investing" is not "saving", i.e. such investment is not to earn interest over a long period of time, but rather to walk away with a profit when the time is right. It's not for everyone.

Circumstances, circumstances, circumstances.

Would you really advise someone with 200k to their name (and that's it) and is going to have to live on it...

Would you really get them trading in gold? Surely you would advise a friend not to do it?

I will tell the friend what the risks are and let him decide for himself if he wants to follow my trading or not.

That's it.

I will never advise something I wouldn't trade myself. I think that is the best of guarantees for genuine advice.

And sometimes advice is genuine, but wrong.

There is no way to guarantee profits, and nowadays the best risk free interest is 3.5% in baht or a bit more in AUD.

I made my 20k friday, I may lose them again some other day when I take some crap decision.

Actually now is a good time to put a few bob into gold bars...

[JSixpack]

Do cash accounts at Thai online brokers pay interest?

[yoshiwara]

yeah... gamble mamble

but in the meanwhile, I gave a tradable answer to OP, and on the 28th gold closed around 1656 USD and at 1686 USD on friday.

200k with 300% leverage would have netted about 10800 USD.

I expect that trend to go on, and if Bernanke "helps the economy" a bit more, the gold price could very well shoot up to 1800 or 1900.

But I agree that "investing" is not "saving", i.e. such investment is not to earn interest over a long period of time, but rather to walk away with a profit when the time is right. It's not for everyone.

Circumstances, circumstances, circumstances.

Would you really advise someone with 200k to their name (and that's it) and is going to have to live on it...

Would you really get them trading in gold? Surely you would advise a friend not to do it?

I will tell the friend what the risks are and let him decide for himself if he wants to follow my trading or not.

That's it.

I will never advise something I wouldn't trade myself. I think that is the best of guarantees for genuine advice.

And sometimes advice is genuine, but wrong.

There is no way to guarantee profits, and nowadays the best risk free interest is 3.5% in baht or a bit more in AUD.

I made my 20k friday, I may lose them again some other day when I take some crap decision.

Actually now is a good time to put a few bob into gold bars...

The thing is this. If our friend puts any of his 200k into gold bars or a property to live in or any other non-income yielding asset, then that puts further pressure on the rest of his assets and forces him to accelerate the running down of his capital. The only exception is if he successfully flips any of his shiny new purchases and makes a quick turn. Not a good strategy. The 'golden' rule is to try to make one's assets work for you and for this you need income, regular income.