Living Off Your Investments ...

[LoveDaBlues]

As a newbie, and trying to calculate the unfathomable "how much is enough", I've read through this long thread and in trying to come up with the answer to how much do I need, tried to do some detailed calculations. Feedback is welcome. Are these amounts way off (either under or over)? The high and low estimates on this thread appear around 25,00 - 140,000 Bhat/month, with a figure of 60,000 - 80,000 appearing popular.

My basic scenario is me and the Thai wife living in our own house with major set-up expenses taken care of (eg, bought house, cars etc.). Kids left home and finished university, so no support costs there. We'd be living up north, somewhere Chiang Mai or Chaing Rai, and outside the city. We're not extravagant, but want to be comfortable, so not cutting corners either.

These are our first cut estimates in Bhat/month. I've tried here to break things down and think of almost all likely expenses.

Food/Drink - 12,000 (this is eat at home, so doesn't include eating out).

Utilities - Cooking gas - 200

Utilities - Water 400

Telephone and Internet - 2,000

Electricity - 3,000

Garbage collection / Security guards? - 800

House Insurance - 2,500

Home contents insurance - 1,800

Medical Insurance - 5,000 (for two people)

Vehicle insurance - 5,000 (two cars)

Vehicle maintenance cost - 5,000

Petrol - 10,000 (that's about 30,000 km at 30 Bhat/litre)

Road tax - 1,500

House repairs and maintenance - 4,000

Rates/local housing tax - 1,000

TOTAL = 54,200 Bhat/month

With a 10% contingency that would equate to about 60,000 Bhat/month.

Then of course entertainment and travel would be on top of that. I've seen other's post that for 60,000 Bhat they would include entertainment and local travel expenses, so maybe the above is a bit high. Comments?

You're high on nearly everything. Example, my TW cooks 2.5 meals a day on average as we do eat out sometimes. When I first moved into the rental house I had a newly filled gas cooking bottle. Cost 280 baht for filliing. It lasted 6.5 months until it needed a refill! Do the math....not close to 200 baht a month. Example, 400 baht a day to eat at home for 2 people? High. Water will run much less than 400 baht a month for 2 people. Local housing tax? What are you talking about? Try 60 baht PER YEAR.

I won't go item by item for what you have listed. I will say this. If you can pay cash for the cars and house you'll be pressed to find ways to spend 60,000 per month. Your biggest worry will be things like: the kids wanting 'loans' to start the new business or the 'uncle' wanting to go partners in the cattle business or the existing loans you don't know about that have to be payed......understand?

BTW, if my TW wasn't so attached to her family I would live in Chiang Rai. Try the buffet at the Waing Inn.....yummy yummy and 140 baht.....well worth the price. Plenty of cheap rental places there; my advice make a deal for a 1 month stay at a local hotel/guest house. This gives you plenty of time to 'beat the bushes' for a decent long-term rental house cheap. Once in the rental house you can then look/wait for a sweet deal on a piece of property. Good luck.

[simcity]

As a newbie, and trying to calculate the unfathomable "how much is enough", I've read through this long thread and in trying to come up with the answer to how much do I need, tried to do some detailed calculations. Feedback is welcome. Are these amounts way off (either under or over)? The high and low estimates on this thread appear around 25,00 - 140,000 Bhat/month, with a figure of 60,000 - 80,000 appearing popular.

My basic scenario is me and the Thai wife living in our own house with major set-up expenses taken care of (eg, bought house, cars etc.). Kids left home and finished university, so no support costs there. We'd be living up north, somewhere Chiang Mai or Chaing Rai, and outside the city. We're not extravagant, but want to be comfortable, so not cutting corners either.

These are our first cut estimates in Bhat/month. I've tried here to break things down and think of almost all likely expenses.

Food/Drink - 12,000 (this is eat at home, so doesn't include eating out).

Utilities - Cooking gas - 200

Utilities - Water 400

Telephone and Internet - 2,000

Electricity - 3,000

Garbage collection / Security guards? - 800

House Insurance - 2,500

Home contents insurance - 1,800

Medical Insurance - 5,000 (for two people)

Vehicle insurance - 5,000 (two cars)

Vehicle maintenance cost - 5,000

Petrol - 10,000 (that's about 30,000 km at 30 Bhat/litre)

Road tax - 1,500

House repairs and maintenance - 4,000

Rates/local housing tax - 1,000

TOTAL = 54,200 Bhat/month

With a 10% contingency that would equate to about 60,000 Bhat/month.

Then of course entertainment and travel would be on top of that. I've seen other's post that for 60,000 Bhat they would include entertainment and local travel expenses, so maybe the above is a bit high. Comments?

Yes sound a bit hight to me too , nice to have 60000 a month and keep what is not spending in a nest egg !

i find the car insurance / house repairs bit high , i got a problem with termits , got two workers for two weeks to take all partition / replace them / clean and paint , plus company exterminator . the total bill was 12000 ! but think i am safe for many years now !

cooking gas and water is to high too, my electricity bill is bit higher as your !

food the same 5000 baht every two month to lotus for all dry good and normal stuff , trip at the fresh market every two day who is very cheap !

my insurance at home is 5000 baht a year , i do not take a contain insurance in thailand .

petrol 2 cars 10,000 (that's about 30,000 km at 30 Bhat/litre) , hum that is 500 kilo a day for each car ! plus everymonth you have a maintenance of 5000 .

Hum glad i do not have one !

MY Garbage collection is 40 baht or 60 baht for three months .

but better to have a nice marge

Edited September 3, 2006 by simcity

[Artamus]

Thanks for the replies.

Yes, I slipped up with the cars. That was 30,000 km per year, not month, but the amount on petrol is correct per month.

[Firefan]

I think your budget looks fine for 2 -w. house/cars paid - yes, some items a bit high, but surprises will ALWAYS happen. Here is my real avg. monthly basic costs 2006 in round nos (single, not Incl. all the entertainment/travel/visa renewal costs Etc.):

Mng fee,+aircon service+minor repairs: 5k

Elec+water+internet+tel+mobile: 5k

Transport(taxi+train): 3k

Maid(part time): 2k

Basic groceries+personal care: 5k

Health insurance+non perscription medicine+vitamins/supplements: 5k

TOTAL 25k/mth

Above would be my minimum needed income (+Inflation adj.) from my investments. For entertainment/fun/travel an additional 25k/mth is"needed" for me for a total of 50k/mth.

Hope helps! Cheers!

[BlackJack]

hello

i too budgeted for this and rarely spend it so it just builds up

the trick is that as Thailand pays so little interest on your accrued savings that you keep it somewhere else to get compiled interest

so bring in only what you need each month or every 3 months

One thing is Health - make sure you are covered for up to 1 million baht - as this will wipe you out real quick if something goes wrong (happened to a friend of mine)

REMEMBER the older you get the more it costs

Try to invest your money and not spend all the interest as then you will not keep pace with inflation

ie if you can get a rental property then it will appreciate and you also maybe able to raise the rental each year to keep pace with inflation

I have been looking into NANO shares in the USA - there are risks however the FORBES people have done their homework and are suggesting a few movers and delete the scammers - NANO will be bigger than any other product in history

I would like to buy the 12 month news letter on NANO shares and would like to know if anyone would like to share these costs ie approx US$200 per year

I am also looking at how to buy and sell USA shares / USA tax / etc

ANYONE doing this now please contact me

thanks

[siamamerican]

I'm 40 yrs old and lived in Thailand for over three years. When I first arrived I spent about 100,000 bt per month and the last year about 25,000 bt. Now, I'm in the US making over 200,000(US$), and spend about 4,000 per month. I'm happy, but I was much happier in Thailand spending 25,000 bt.

In Thailand I would want about 60,000bt per month to live comfortably, including rent and health insurance. This would allow me to eat out every meal and go out a few nights a week. I'm married, so my entertainment bill wouldn't be as high as a single person.

If I were in my 30s and wanted to move to Thailand, as the original post stated, I would want to have at least $260,000(US). I would invest $200,000 in stocks(risky, but he is young) and watch it compound for 10 years. At a 8% return, you would have roughly $300,000 in todays dollars at the end of the 10 years.

The trick is making the $60,000 surplus last 10 years. If you earn $1,000 teaching English or from any other source, you would be fine. It is my guess, the young man in the original post would be happier working a little in Thailand than living in his home country.

The scenario I just laid out is riskier than working 10 more years and then moving to Thailand, but my advise is go for it. You can even do it with less, but you'll have work more in Thailand.

[Thaiquila]

I would invest $200,000 in stocks(risky, but he is young) and watch it compound for 10 years. At a 8% return, you would have roughly $300,000 in todays dollars at the end of the 10 years.

I am also in favor of taking investment risks, even for older people.

However, one flaw in your logic.

There is no way at all you can safely predict an 8 percent equity return in any give TEN YEAR period. Historically, the return would probably be more like 9 percent including dividends, but thats the thing, that is over a much longer period of time.

In the coming 10 year period, the return could easily be down 50 percent or up 50 percent, though personally I think the chance of such a radical change is more likely on the downside.

Moral of their story, if you need certainty in rate of return, buy things like CDs.

Edited September 4, 2006 by Thaiquila

[bmanly]

In Thailand I would want about 60,000bt per month to live comfortably, including rent and health insurance. This would allow me to eat out every meal and go out a few nights a week. I'm married, so my entertainment bill wouldn't be as high as a single person.

If I were in my 30s and wanted to move to Thailand, as the original post stated, I would want to have at least $260,000(US). I would invest $200,000 in stocks(risky, but he is young) and watch it compound for 10 years. At a 8% return, you would have roughly $300,000 in todays dollars at the end of the 10 years.

The trick is making the $60,000 surplus last 10 years. If you earn $1,000 teaching English or from any other source, you would be fine. It is my guess, the young man in the original post would be happier working a little in Thailand than living in his home country.

The scenario I just laid out is riskier than working 10 more years and then moving to Thailand, but my advise is go for it. You can even do it with less, but you'll have work more in Thailand.

Personally I think 260K is not enough. Thaiquila is right, if you have a market crash of 50% it could take 10 to 20 years to recover up the original amount of capital. As Warren Buffett once said "If you are not prepared to take a 50% fall in your stocks then you shouldn't be in the market".

The thing is that I hear talk of "Teaching in Thailand" all the time and you said $1,000 USD a Month. There are hundreds of farangs wanting to do this, not all can get jobs teaching with that kind of salary. Be sure you have a job lined up with that kind of salary, if it isn't for sure then you are taking a further big risk.

With 260K capital and all the "If's and But's" there is a great probability that it can go belly up. Put it this way, Bank on a 50% market crash and you not getting a job, then ask yourself would you survive?

[LoveDaBlues]

pay cash for house (condo?) and car. put 400-500,000 USD in 5 year CD. live WELL off the monthly interest and have excess (on average) each month. simple and no risk. best of all sleep well at night and worrying about money becomes a thing of the past.

quote siamamerican:

In Thailand I would want about 60,000bt per month to live comfortably, including rent and health insurance. This would allow me to eat out every meal and go out a few nights a week. I'm married, so my entertainment bill wouldn't be as high as a single person.

This is a good post. With the cash purchase of living quarters you can live even better and not have to worry about rising rent costs. Also gives your lady some security for when you croak.

[Artamus]

go for it. You can even do it with less, but you'll have work more in Thailand.

Personally I think 260K is not enough. Thaiquila is right, if you have a market crash of 50% it could take 10 to 20 years to recover up the original amount of capital. As Warren Buffett once said "If you are not prepared to take a 50% fall in your stocks then you shouldn't be in the market".

I'd agree that 260k is probabaly not enough, and I'd like twice that. One thing to remember though, is that if you are living off the dividend income from such an amount, even though the stock market might crash 50% the dividend income is unlikely to drop anywhere near as much (depending on your stock selection). Safer blue chip stocks tend to generate a more consistent income, and personally I'd not worry too about a 50% stock market correction if I was reliant on the dividends. We've been through this in the last 6 years, and my current income hasn't dropped more than 5-10%.

[BlackJack]

go for it. You can even do it with less, but you'll have work more in Thailand.

Personally I think 260K is not enough. Thaiquila is right, if you have a market crash of 50% it could take 10 to 20 years to recover up the original amount of capital. As Warren Buffett once said "If you are not prepared to take a 50% fall in your stocks then you shouldn't be in the market".

I'd agree that 260k is probabaly not enough, and I'd like twice that. One thing to remember though, is that if you are living off the dividend income from such an amount, even though the stock market might crash 50% the dividend income is unlikely to drop anywhere near as much (depending on your stock selection). Safer blue chip stocks tend to generate a more consistent income, and personally I'd not worry too about a 50% stock market correction if I was reliant on the dividends. We've been through this in the last 6 years, and my current income hasn't dropped more than 5-10%.

never put your eggs in the one financial basket - all in CD's

you need to stop paying rent -

you need an investment property to hedge against inflation and bring in monthly rent

cash in the bank for emergency

cash in fixed interest account

3- 5 managed funds - you can check their 7 year return history for the best ones - one in Australia paid 100% last year

if you can bring in a little money on the side then its a bonus

[davidjtayler]

If you can't live comfortably off 60,000Baht per month in Thailand then youve got problems ......

[Nongwahyay]

At the age of 53 I´m also seriously planning to move to Thailand with my TW in 3 years time (from Belin, where I`ve lived as a Brit for the past 30 years). I let myself be caught up in the stocks and shares euphoria a few years ago, have invested here and there, and basically just lost a lot of money, not to mention a lot of sleep!!!!!! I´ve read with interest all the advice given here on spreading your risks, hedging your bets and all the rest - but shall certainly be ignoring it all and leaving my money in a boring old bank account, earning a risk-free, tax-free (as an overseas resident) 5,25 percent with the HSBC in the UK (although we do have various policies which will mature a few years later).

As regards the advice given in various other quarters here, regarding keeping your monthly costs down by - for example - buying your own home in Thailand (thus excluding future rental payments) I shall also ignore this.............................and leave the 2- 2,5 million Baht needed for a house in British sterling in our HSBC account, earning the equivalent of 8,5-11 thousand Baht per month. We will then rent a house for between 10 and 15 thousand Baht, laugh at the small difference we have to pay....... and if the neighbours or dogs in the street get on our nerves, hand in our notice and move elsewhere!!! Try doing that when you´ve just invested 2,5 million Baht in a house.... how quickly will you be able to sell???? And how much will you lose on the deal????

Far be it from me to give anyone advice........ but I bet I´ll sleep better then many an investor here.............

[Artamus]

At the age of 53 I´m also seriously planning to move to Thailand with my TW in 3 years time (from Belin, where I`ve lived as a Brit for the past 30 years). I let myself be caught up in the stocks and shares euphoria a few years ago, have invested here and there, and basically just lost a lot of money, not to mention a lot of sleep!!!!!! I´ve read with interest all the advice given here on spreading your risks, hedging your bets and all the rest - but shall certainly be ignoring it all and leaving my money in a boring old bank account, earning a risk-free, tax-free (as an overseas resident) 5,25 percent with the HSBC in the UK (although we do have various policies which will mature a few years later).

As regards the advice given in various other quarters here, regarding keeping your monthly costs down by - for example - buying your own home in Thailand (thus excluding future rental payments) I shall also ignore this.............................and leave the 2- 2,5 million Baht needed for a house in British sterling in our HSBC account, earning the equivalent of 8,5-11 thousand Baht per month. We will then rent a house for between 10 and 15 thousand Baht, laugh at the small difference we have to pay....... and if the neighbours or dogs in the street get on our nerves, hand in our notice and move elsewhere!!! Try doing that when you´ve just invested 2,5 million Baht in a house.... how quickly will you be able to sell???? And how much will you lose on the deal????

Far be it from me to give anyone advice........ but I bet I´ll sleep better then many an investor here.............

Good points. However, there is one fundemental problem with this approach - inflation - in that the capital does not appreciate. Therefore the 5% interest, whilst covering expenses now, will not cover expenses in 10 years time when it is still generating the same fixed 5% and there has been no capital increase. Inflation kills this approach over time. Over 20 years the situation is dire. You need a mix of cash and increasing equity (stocks, housing or whatever turns you on).

If you can't live comfortably off 60,000Baht per month in Thailand then youve got problems ......

Errr, like an expensive wife?

[davidjtayler]

At the age of 53 I´m also seriously planning to move to Thailand with my TW in 3 years time (from Belin, where I`ve lived as a Brit for the past 30 years). I let myself be caught up in the stocks and shares euphoria a few years ago, have invested here and there, and basically just lost a lot of money, not to mention a lot of sleep!!!!!! I´ve read with interest all the advice given here on spreading your risks, hedging your bets and all the rest - but shall certainly be ignoring it all and leaving my money in a boring old bank account, earning a risk-free, tax-free (as an overseas resident) 5,25 percent with the HSBC in the UK (although we do have various policies which will mature a few years later).

As regards the advice given in various other quarters here, regarding keeping your monthly costs down by - for example - buying your own home in Thailand (thus excluding future rental payments) I shall also ignore this.............................and leave the 2- 2,5 million Baht needed for a house in British sterling in our HSBC account, earning the equivalent of 8,5-11 thousand Baht per month. We will then rent a house for between 10 and 15 thousand Baht, laugh at the small difference we have to pay....... and if the neighbours or dogs in the street get on our nerves, hand in our notice and move elsewhere!!! Try doing that when you´ve just invested 2,5 million Baht in a house.... how quickly will you be able to sell???? And how much will you lose on the deal????

Far be it from me to give anyone advice........ but I bet I´ll sleep better then many an investor here.............

Good points. However, there is one fundemental problem with this approach - inflation - in that the capital does not appreciate. Therefore the 5% interest, whilst covering expenses now, will not cover expenses in 10 years time when it is still generating the same fixed 5% and there has been no capital increase. Inflation kills this approach over time. Over 20 years the situation is dire. You need a mix of cash and increasing equity (stocks, housing or whatever turns you on).

If you can't live comfortably off 60,000Baht per month in Thailand then youve got problems ......

Errr, like an expensive wife?

LOL

[BlackJack]

At the age of 53 I´m also seriously planning to move to Thailand with my TW in 3 years time (from Belin, where I`ve lived as a Brit for the past 30 years). I let myself be caught up in the stocks and shares euphoria a few years ago, have invested here and there, and basically just lost a lot of money, not to mention a lot of sleep!!!!!! I´ve read with interest all the advice given here on spreading your risks, hedging your bets and all the rest - but shall certainly be ignoring it all and leaving my money in a boring old bank account, earning a risk-free, tax-free (as an overseas resident) 5,25 percent with the HSBC in the UK (although we do have various policies which will mature a few years later).

As regards the advice given in various other quarters here, regarding keeping your monthly costs down by - for example - buying your own home in Thailand (thus excluding future rental payments) I shall also ignore this.............................and leave the 2- 2,5 million Baht needed for a house in British sterling in our HSBC account, earning the equivalent of 8,5-11 thousand Baht per month. We will then rent a house for between 10 and 15 thousand Baht, laugh at the small difference we have to pay....... and if the neighbours or dogs in the street get on our nerves, hand in our notice and move elsewhere!!! Try doing that when you´ve just invested 2,5 million Baht in a house.... how quickly will you be able to sell???? And how much will you lose on the deal????

Far be it from me to give anyone advice........ but I bet I´ll sleep better then many an investor here.............

Good points. However, there is one fundemental problem with this approach - inflation - in that the capital does not appreciate. Therefore the 5% interest, whilst covering expenses now, will not cover expenses in 10 years time when it is still generating the same fixed 5% and there has been no capital increase. Inflation kills this approach over time. Over 20 years the situation is dire. You need a mix of cash and increasing equity (stocks, housing or whatever turns you on).

If you can't live comfortably off 60,000Baht per month in Thailand then youve got problems ......

Errr, like an expensive wife?

LOL

yes you need an appreciating asset

and this is not your wife

[Thaiquila]

To the poster suggestimg someone in their early 50's put everything in 5 percent fixed investments, well, 5 percent may or may not cover inflation. So if someone is living on investments, this is just not going to cut it. It is guaranteed failure. Your standard of living would go down year after year. Now I am talking about someone with a usual amount of wealth, not Bill Gates types who could make 1 percent and be happy.

So for the rest of us, you really have no decent choice but to take bigger risks. You may lose big, but you may also do well enough to continually improve your living standard. For those that can't stomach bigger risks, I think you should keep working.

As far as buying real estate, I understand there are great arguments for not buying in Thailand. I bought a place for 3 m that would theoretically rent for 300K per year. I am happy with that for the short term. How that works out for me in the long term is just another one of those bigger risks I am talking about, the kind alot of us kind of need to take to improve our lives.

Edited September 5, 2006 by Thaiquila

[Firefan]

I agree that dumping it all high interest bank account/CDs Etc. might ensure a good nights sleep...NOW... But inflation will surely eat away rather quickly.

One needs higher returning assets in the portfolio in order to beat inflation overall. Typically stocks(direct or via funds/ETFs) and/or real estate(direct or via reits/stocks).

I have noticed that inflation for me have increased with about 10% a year dwarfing the official nos. Also; the Thai Baht have strengthened and could strengthen even more, hurting people on overseas income.

Cheers!

[pnustedt]

You may lose big, but you may also do well enough to continually improve your living standard. For those that can't stomach bigger risks, I think you should keep working.

Continuing working is not an option for many. IMO your income will go further in Thailand than many other coutries. I believe that you need a min. of Bt12mil to live here on "sensible" investment or an income in excess of 40bt/month. If you can't achieve this you may be better off staying in a western country with a good safety net. Thailand can be heaven on a small income but it can be hel_l on less!

[LoveDaBlues]

At the age of 53 I´m also seriously planning to move to Thailand with my TW in 3 years time (from Belin, where I`ve lived as a Brit for the past 30 years). I let myself be caught up in the stocks and shares euphoria a few years ago, have invested here and there, and basically just lost a lot of money, not to mention a lot of sleep!!!!!! I´ve read with interest all the advice given here on spreading your risks, hedging your bets and all the rest - but shall certainly be ignoring it all and leaving my money in a boring old bank account, earning a risk-free, tax-free (as an overseas resident) 5,25 percent with the HSBC in the UK (although we do have various policies which will mature a few years later).

As regards the advice given in various other quarters here, regarding keeping your monthly costs down by - for example - buying your own home in Thailand (thus excluding future rental payments) I shall also ignore this.............................and leave the 2- 2,5 million Baht needed for a house in British sterling in our HSBC account, earning the equivalent of 8,5-11 thousand Baht per month. We will then rent a house for between 10 and 15 thousand Baht, laugh at the small difference we have to pay....... and if the neighbours or dogs in the street get on our nerves, hand in our notice and move elsewhere!!! Try doing that when you´ve just invested 2,5 million Baht in a house.... how quickly will you be able to sell???? And how much will you lose on the deal????

Far be it from me to give anyone advice........ but I bet I´ll sleep better then many an investor here.............

Good points. However, there is one fundemental problem with this approach - inflation - in that the capital does not appreciate. Therefore the 5% interest, whilst covering expenses now, will not cover expenses in 10 years time when it is still generating the same fixed 5% and there has been no capital increase. Inflation kills this approach over time. Over 20 years the situation is dire. You need a mix of cash and increasing equity (stocks, housing or whatever turns you on).

If you can't live comfortably off 60,000Baht per month in Thailand then youve got problems ......

Errr, like an expensive wife?

How can you make this statement when the poster (Nongwahyay) didn't state how much capital he has? Let's assume his capital generates (at 5%) $50,000 USD per year (spendable after taxes). My bet is he can still live pretty well in Thailand 10 years from now on $50,000 per year.......not to mention all the extra dosh he has from the yearly savings (+ interest) generated from his excess cash each month. Assuming 2% inflation per year in Thailand for the next 20 years his $50,000 will now look like $30,000......still more than enough to live comfortably AND as I said before NOT EVEN COUNTING THE EXTRA DOSH + INTEREST earned along the way. So now he's early 70's in age; still has his capital plus all the extra dosh acquired over 20 years so it's a sizable amount. In 5 more years he's (if still alive) late 70's and his buying power cut in half; still enough to pay the bills but with no spare cash. HOWEVER, he has not even TOUCHED any of the extra dosh generated over 25 years! At this point he would roughly be 95 before the original capital starts to get eaten.........he's not a turtle.

I personally am not taking this approach.....but with the right starting capital and age it can easily work.

[Thaiquila]

It is also absurd to never touch your capital unless you are living your life to pass your fortune on the someone else. The goal is to live well without running out of money, not to die with a huge pot of unspent money.

[Nongwahyay]

How can you make this statement when the poster (Nongwahyay) didn't state how much capital he has? Let's assume his capital generates (at 5%) $50,000 USD per year (spendable after taxes). My bet is he can still live pretty well in Thailand 10 years from now on $50,000 per year.......not to mention all the extra dosh he has from the yearly savings (+ interest) generated from his excess cash each month. Assuming 2% inflation per year in Thailand for the next 20 years his $50,000 will now look like $30,000......still more than enough to live comfortably AND as I said before NOT EVEN COUNTING THE EXTRA DOSH + INTEREST earned along the way. So now he's early 70's in age; still has his capital plus all the extra dosh acquired over 20 years so it's a sizable amount. In 5 more years he's (if still alive) late 70's and his buying power cut in half; still enough to pay the bills but with no spare cash. HOWEVER, he has not even TOUCHED any of the extra dosh generated over 25 years! At this point he would roughly be 95 before the original capital starts to get eaten.........he's not a turtle.

I personally am not taking this approach.....but with the right starting capital and age it can easily work.

Hear hear!!!!!! My sentiments exactly!! As I did say, we have various policies which reach maturity over the next 10 years. These will be put one by one into our boring old bank account and will generate enough interest - despite inflation - to allow us to live off the interest for decades to come.......and as I unfortunately can´t take it with me , there´ll be plenty left over to provide for my wife - if she outlives me - and her family.

I also keep on reading that those in their 30s and 40s should take greater risks with their investments, as they can make 10% or more............ but what is the point, when the risk of losing a lot of it - which is also pointed out - is relatively great...............?????? You´ll not only possibly lose the capital which you are depending on to live from in Thailand.... but, as we all know, you´ll lose an awful lot of sleep as well!!!!!! 5% in the hand are better than 10% down the drain................... You´ll need an enormous interest rate to make up for a 50% loss of your capital if (when) the markets take a steep dive again....... Those who have the knowledge and time to invest wisely in risky ventures may well come out on top at the end... but those who have less to lose and are not able to keep an eye on their investments may well never be able to realize their dream of retiring to Thailand.............or anywhere else!!!!!!

[Thaiquila]

Different people have different risk tolerances. I have a very high risk tolerance and it has been great for me up till now. I realize it can explode at any time. But there really is no one rule for all temperaments. I have never lost an hour of sleep over dropping investments. In fact, I never panic sell either. That's what ruins many. They end up selling low and buying high.

But I do have my opinions also. The old saw that older people should be completely out of the stock market is pretty ridiculous. Maybe if you are very old and know you only have a few years left.

Edited September 5, 2006 by Thaiquila

[Nongwahyay]

It is also absurd to never touch your capital unless you are living your life to pass your fortune on the someone else. The goal is to live well without running out of money, not to die with a huge pot of unspent money.

I agree totally!!!!!!! If you can manage on interest alone. so much the better....if not, just make sure you don´t run out of it totally before your life expires...........

[cclub75]

It is also absurd to never touch your capital unless you are living your life to pass your fortune on the someone else.

Well said.

I would add : we all know the "book" investment rules, but it always surprise me when people repeat them without taking in consideration the aim, the frame, the current environment, and the timescale.

Someone said : if you want high return to beat inflation, buy stocks and real estate (stock, reit).

That's the basic rule. And we know the other rule : buy low, sell high. OK bravo, well done.

But come on, that's half of the path : people need to look at the current environment, along with their own target in life.

And prosaically : forget real estate now.

[sleepyjohn]

Does anyone know of an offshore type annuity that is buyable directly rather than paying an "advisor" for something one's already decided oneself?

Annuities are in principle an investment for later life with a big plus....you get paid no matter how long you live. Essentially if you live long you are getting return from the poor buggers who died early. The disadvantage is the stodginess and therefore poor returns the insurance companies involved get on their investments, and also the sales fees.

Is it possible to insure against a long life?

Edited September 5, 2006 by sleepyjohn

[migrant]

It is also absurd to never touch your capital unless you are living your life to pass your fortune on the someone else. The goal is to live well without running out of money, not to die with a huge pot of unspent money.

I agree totally!!!!!!! If you can manage on interest alone. so much the better....if not, just make sure you don´t run out of it totally before your life expires...........

I frequently remind my kids that I will be out spending their inheritance

[LoveDaBlues]

Does anyone know of an offshore type annuity that is buyable directly rather than paying an "advisor" for something one's already decided oneself?

Annuities are in principle an investment for later life with a big plus....you get paid no matter how long you live. Essentially if you live long you are getting return from the poor buggers who died early. The disadvantage is the stodginess and therefore poor returns the insurance companies involved get on their investments, and also the sales fees.

Is it possible to insure against a long life?

yea, it's called a pension.

[Firefan]

Yeah I agree; if one can live of bank/cash interest and return of capital until they die then no need to take higher risk! Most are not that lucky. Also most do not know when they die - making the calculations difficult.

An annuity might be an option for some - as mentioned they are renowned for high fees but they do offer another tool that might fit some(not me) to ensure money for life (as long as the insurance company selling it does not go bankrupt that is...). Vanguard (in the US) is known to be selling the lowest costs ones - also sell to other nationalities.

They have an online quote(too lazy to find) - and if I buy now, with instant payments - they would pay me 5%/year for life - no inlfation adjustment, and the money would be gone when I pass away.

Cheers!

[LoveDaBlues]

Yeah I agree; if one can live of bank/cash interest and return of capital until they die then no need to take higher risk! Most are not that lucky. Also most do not know when they die - making the calculations difficult.

An annuity might be an option for some - as mentioned they are renowned for high fees but they do offer another tool that might fit some(not me) to ensure money for life (as long as the insurance company selling it does not go bankrupt that is...). Vanguard (in the US) is known to be selling the lowest costs ones - also sell to other nationalities.

They have an online quote(too lazy to find) - and if I buy now, with instant payments - they would pay me 5%/year for life - no inlfation adjustment, and the money would be gone when I pass away.

Cheers!

Actually, of all the variables involved.....death is the sure thing. Returns on investments (or losses) are speculation.

Actually, by researching family history and taking into consideration one's life style you can have a pretty good idea how long you'll live; probably more predictable than the stock market. I'm living to be 84 years, 3 months, and 6 days.