Thai Household Debt

[NeverSure]

Lot of people are forgetting that because we are in i-pad 3 now or whatever you can get a lot of these things pretty cheap 2nd hand now too . Thais love a bargain right . My wife bought a galaxy for 8000 baht reconditioned . It works fine ,it's just not the latest model . How many people can actually tell the difference ? WGAF ?

-

Just as an aside, one thing I noticed in LOS was the lack of sales, coupons, 2 for the price of 1, etc. that we are bombarded with.

I got a new Galaxie for free in exchange for signing a 2 year contract for the phone. But then it costs me $US90 a month for full useage including internet and TV, unlimited minutes and download. I guess there isn't a free lunch.

Edit. Oops I screwed that up because I'm getting OLD, lol. I HAD a Galaxie. I HAVE a new Motorola with AT&T as the provider. Same price and basic features, Android.

Edited October 22, 2012 by NeverSure

[metisdead]

Please remember this topic is about Thai Household Debt. Stay on topic please.

[meatballs]

No way wages are that low here. I think avg. wage is 30k/month here. Only way to explain all the cars on the roads.

[isawasnake]

^i have talked to let's just say enough college grads making ~8 to 12k. It is very sad but true. I always wonder why they even go to college, and I fricking loved college.

[NeverSure]

I don't know about Bangkok or the sex areas. I know three different gals who live in Isaan and Chiang Mai. All have master's degrees. One is a nurse and the other a pharmacist, and they make less than 20k. The other is a public school teacher and she makes about 15k.

They all have scooters, cars and cell phones. I have no idea how. Maybe I'll find out how when they ask me for a new buffalo, LOL.

[Berkshire]

Thai household debt as percentage of disposable income 53%

US household debt as percentage of disposable income 130%

UK household debt as percentage of disposable income 176%

Canada household debt as percentage of disposable income 140% (2009)

Australia household debt as percentage of disposable income 150%

OP - you can belittle Thai people for getting into debt in order to buy shiny new things all you like but they are evidently nowhere near as stupid as many in the West.

I can't be bothered to look up debt as a percentage of assets for all those countries (I believe it is a little over 40% in Thailand) but as far as living within one's means is concerned, I don't think Westerners have much to teach the Thai nation.

This is right on the money. It's the west that invented the concept of "debt" and spending beyond your means. Americans in particular are buried in debt, and it will be well into the future as outstanding student loans have exceeded US$1 trillion...among other debt. It seems that some of the farangs on this thread want to hope that Thais are spending beyond their means, but most are managing more responsibly than western households.

If there's one demographic in Thailand that typically mismanage their money, it's Thai women who associate with farangs. Perhaps that where members are getting their info.

[NeverSure]

...but most are managing more responsibly than western households.

Maybe you're right. I don't know. I just look at what's known about average incomes, the price of cars, cell phones, TV's, etc.

Then I hear the horror stories about how they finance them at high interest with major prepayment penalties.

Here's the part I don't get. Right now with factory incentives and advertised dealer sales, I can pick off a new Toyota Camry LE for $US20k flat. Out the door. That's only about 40% of the average family's annual income in the US. Financing it is nuts, but if they did at today's interest rates, the payments would be a little over $US300 per month. The loan could be prepaid at any time with no penalty. Interest would be charged only for the amount of time the borrower had the money. That's called charging for actual dollar days.

So that car is costing the average US household about 8% of its income. It still has almost $4k a month to live on. Then I see Thais in a village with a new pickup and I have to wonder what percentage of their income that costs. How long is the loan, and what's this I hear about loan rates and terms? How much did that pickup cost in LOS?

I simply have no idea how they buy it without eating up most of their income.

I'm not trying to make a statement, other than I don't get it.

Edited October 23, 2012 by NeverSure

[Baloney pony]

Then I see Thais in a village with a new pickup and I have to wonder what percentage of their income that costs. How long is the loan, and what's this I hear about loan rates and terms? How much did that pickup cost in LOS?

I simply have no idea how they buy it without eating up most of their income.

I'm not trying to make a statement, other than I don't get it.

A Toyota Hilux is actually cheaper in Thailand than it would be in Australia or a similar model in the U.S. You answered your own question already. The dealerships and property developers collude with banks to offer special loan terms based on promotion schemes etc.. Not all the loans are at rip off interest rates either some of them are actually decent because most banks are smart not to kill the goose that lays the golden egg. They want consumers to be able to pay back debt rather than going through the hassle of repo.

It's already been said that a lot of Thais live in the same shabby house or plot of land that multiple generations have resided in. Many don't pay rent and there's no incentive to move out. If a household pools their meager income even if it only adds up to a monthly household income of 30,000 a month they can still afford a car.

[NeverSure]

Then I see Thais in a village with a new pickup and I have to wonder what percentage of their income that costs. How long is the loan, and what's this I hear about loan rates and terms? How much did that pickup cost in LOS?

I simply have no idea how they buy it without eating up most of their income.

I'm not trying to make a statement, other than I don't get it.

A Toyota Hilux is actually cheaper in Thailand than it would be in Australia or a similar model in the U.S. You answered your own question already. The dealerships and property developers collude with banks to offer special loan terms based on promotion schemes etc.. Not all the loans are at rip off interest rates either some of them are actually decent because most banks are smart not to kill the goose that lays the golden egg. They want consumers to be able to pay back debt rather than going through the hassle of repo.

It's already been said that a lot of Thais live in the same shabby house or plot of land that multiple generations have resided in. Many don't pay rent and there's no incentive to move out. If a household pools their meager income even if it only adds up to a monthly household income of 30,000 a month they can still afford a car.

OK, you know more about it than I do.

How much would you guess the payments would be on that pickup?

I saw late model pickups parked at fairly remote village shacks. How do they collectively get $30k baht per month under any circumstances? Is it farm income? Do they have jobs?

I don't recall seeing a Hilux in the US. I don't think they sell them here but I could be wrong. That makes it hard to figure what their payments would be, for me. I am curious though. I did go online to Kelly Blue Book and they don't list it. I went to some Toyota dealers and none is listed.

I'm asking, not telling. I don't know how those people make those payments or why they are willing to be in debt. ??

[isawasnake]

^If it matters, I think the Tacoma is pretty much the hilux in the US.

[NeverSure]

^If it matters, I think the Tacoma is pretty much the hilux in the US.

OK thanks. Comparing prices, and just curious, do you think the Hilux would have all of the (expensive) emissions and safety equipment? US cars have to withstand certain side crashes thus side interior door beams, be able to crash into a specific barrier at a certain speed with no deformation to the passenger compartment and be able to roll over the same, etc. etc.

My apples to apples comparison of models I do know, put the Thailand prices a lot higher. At least they sure seemed that way when I looked. ??

Again, what would a good guess be as to how much the payments are on a Hilux for a Thai?

[chiangmaikelly]

Most Thai women have that much gold on their fingers. In Pattaya 4 times that much.

Do you think that article about savings included American women's jewelry? The average nice engagement ring here will start at about $US5,000 (170,000 baht) and up.

The article wasn't discussing the $10,000 worth of shoes an American woman has in her closet, LOL. Which is why she may have no savings, LOL.

Seriously, when people start out young they have a bad habit of getting too much credit including student loans. Then they have kids and get a mortgage and cars and all on credit. They are idiots. Then most, in later years get better established and begin to save. Not all.

Note that the article also excluded 401k's which are the employer contributed savings accounts for retirement. I think that skews the numbers because for many that is the largest savings they have. An employee can put 3% of each paycheck into that, and most employers will match it. Someone making $100k a year may have $6k going into that each year, without mentioning what they are putting into their social security account which is now nearly 15% per year, half paid by employers.

So, you could have 15% going into SS, and another 6% into a 401k, and say you have no savings, like in a bank. This is still stupid, but not the whole picture.

Your lack of knowledge of Thailand hinders your intelligent discussion of the issues. Thai women don't buy gold for jewelry they buy it as a store of money and security. Thai jewelry can be exchanged on every street corner just like cash. Thai women buy gold the same as women from other countries would put money in a savings account.

[NeverSure]

Most Thai women have that much gold on their fingers. In Pattaya 4 times that much.

Do you think that article about savings included American women's jewelry? The average nice engagement ring here will start at about $US5,000 (170,000 baht) and up.

The article wasn't discussing the $10,000 worth of shoes an American woman has in her closet, LOL. Which is why she may have no savings, LOL.

Seriously, when people start out young they have a bad habit of getting too much credit including student loans. Then they have kids and get a mortgage and cars and all on credit. They are idiots. Then most, in later years get better established and begin to save. Not all.

Note that the article also excluded 401k's which are the employer contributed savings accounts for retirement. I think that skews the numbers because for many that is the largest savings they have. An employee can put 3% of each paycheck into that, and most employers will match it. Someone making $100k a year may have $6k going into that each year, without mentioning what they are putting into their social security account which is now nearly 15% per year, half paid by employers.

So, you could have 15% going into SS, and another 6% into a 401k, and say you have no savings, like in a bank. This is still stupid, but not the whole picture.

Your lack of knowledge of Thailand hinders your intelligent discussion of the issues. Thai women don't buy gold for jewelry they buy it as a store of money and security. Thai jewelry can be exchanged on every street corner just like cash. Thai women buy gold the same as women from other countries would put money in a savings account.

Gee. What a shame. And no one in other countries buys gold, silver or jewelry for both fun and investment. I see. There are no gold dealers on the streets of the US. Hmmm. Ever heard of a jewelry dealer or a pawn shop? We have at least two businesses here which deal only in gold and silver as their only business.

The point wasn't about gold and silver, so try to keep up. The thread title is about household debt. Now, household savings could possibly be enough to offset all debt, and all kinds of savings might be considered.

Someone brought up that idea, and someone else inserted the thought that perhaps household debt wasn't so bad in LOS compared to Western countries. Now, I don't expect you to remember that or to follow along, but it happened.

I have a marvelous collection of about 40 antique Schwinn bicycles which have done very nicely, sell like hotcakes on Ebay, and I consider them savings. I put savings money into them.

Gold is another.

Do you know what the "answer" is on a financial statement? Well I'll help you. It's the difference between assets and liabilities. It's also called a "net worth."

See Kelly, it's all just part of a conversation about the Thais, and whether their household debt is reasonable, according to the internet heros on here, and I include myself.

Kelly? Psssst. This is just the internet. It isn't life or death, see?

[chiangmaikelly]

Most Thai women have that much gold on their fingers. In Pattaya 4 times that much.

Do you think that article about savings included American women's jewelry? The average nice engagement ring here will start at about $US5,000 (170,000 baht) and up.

The article wasn't discussing the $10,000 worth of shoes an American woman has in her closet, LOL. Which is why she may have no savings, LOL.

Seriously, when people start out young they have a bad habit of getting too much credit including student loans. Then they have kids and get a mortgage and cars and all on credit. They are idiots. Then most, in later years get better established and begin to save. Not all.

Note that the article also excluded 401k's which are the employer contributed savings accounts for retirement. I think that skews the numbers because for many that is the largest savings they have. An employee can put 3% of each paycheck into that, and most employers will match it. Someone making $100k a year may have $6k going into that each year, without mentioning what they are putting into their social security account which is now nearly 15% per year, half paid by employers.

So, you could have 15% going into SS, and another 6% into a 401k, and say you have no savings, like in a bank. This is still stupid, but not the whole picture.

Your lack of knowledge of Thailand hinders your intelligent discussion of the issues. Thai women don't buy gold for jewelry they buy it as a store of money and security. Thai jewelry can be exchanged on every street corner just like cash. Thai women buy gold the same as women from other countries would put money in a savings account.

Gee. What a shame. And no one in other countries buys gold, silver or jewelry for both fun and investment. I see. There are no gold dealers on the streets of the US. Hmmm. Ever heard of a jewelry dealer or a pawn shop? We have at least two businesses here which deal only in gold and silver as their only business.

The point wasn't about gold and silver, so try to keep up. The thread title is about household debt. Now, household savings could possibly be enough to offset all debt, and all kinds of savings might be considered.

Someone brought up that idea, and someone else inserted the thought that perhaps household debt wasn't so bad in LOS compared to Western countries. Now, I don't expect you to remember that or to follow along, but it happened.

I have a marvelous collection of about 40 antique Schwinn bicycles which have done very nicely, sell like hotcakes on Ebay, and I consider them savings. I put savings money into them.

Gold is another.

Do you know what the "answer" is on a financial statement? Well I'll help you. It's the difference between assets and liabilities. It's also called a "net worth."

See Kelly, it's all just part of a conversation about the Thais, and whether their household debt is reasonable, according to the internet heros on here, and I include myself.

Kelly? Psssst. This is just the internet. It isn't life or death, see?

Thai household debt as percentage of disposable income 53%

US household debt as percentage of disposable income 130%

UK household debt as percentage of disposable income 176%

Canada household debt as percentage of disposable income 140% (2009)

Australia household debt as percentage of disposable income 150%

There is a gold shop on every corner in Thailand and the trade is is 22 to 23 carat range. Jewelry in Thailand is not like jewelry in other countries. You would know that if you had ever lived in Thailand. You can pay your utility bill with a gold ring in about 20 minutes almost anywhere in Thailand. You can't do that with a bicycle.

You missed my point again. Gold rings and gold jewelry in Thailand are the same as cash and that is not the same as the US or 98% of other countries in the world.

[n0mad]

Thai household debt as percentage of disposable income 53%

US household debt as percentage of disposable income 130%

UK household debt as percentage of disposable income 176%

Canada household debt as percentage of disposable income 140% (2009)

Australia household debt as percentage of disposable income 150%

There is a gold shop on every corner in Thailand and the trade is is 22 to 23 carat range. Jewelry in Thailand is not like jewelry in other countries. You would know that if you had ever lived in Thailand. You can pay your utility bill with a gold ring in about 20 minutes almost anywhere in Thailand. You can't do that with a bicycle.

You missed my point again. Gold rings and gold jewelry in Thailand are the same as cash and that is not the same as the US or 98% of other countries in the world.

Thai household debt as percentage of disposable income 53%

isn't this an average of all Thai Households? Can you honestly compare the average Thai household to a western one? Don't you think rather than looking at Thai household debt which is being discussed you should be discussing Thai households WITH debt. i think this table compares apples with oranges really, what percentage of households have debt?

I think the figures are misleading as although total household debt may be low those with debt may be over indebted. Secondly, black market debt plays a big role in Thai society and loan sharks are significantly more prevalent than in western countries where it is outlawed. Obviously, debts to loan sharks would not be able to be recorded.

[chiangmaikelly]

Thai household debt as percentage of disposable income 53%

US household debt as percentage of disposable income 130%

UK household debt as percentage of disposable income 176%

Canada household debt as percentage of disposable income 140% (2009)

Australia household debt as percentage of disposable income 150%

There is a gold shop on every corner in Thailand and the trade is is 22 to 23 carat range. Jewelry in Thailand is not like jewelry in other countries. You would know that if you had ever lived in Thailand. You can pay your utility bill with a gold ring in about 20 minutes almost anywhere in Thailand. You can't do that with a bicycle.

You missed my point again. Gold rings and gold jewelry in Thailand are the same as cash and that is not the same as the US or 98% of other countries in the world.

Thai household debt as percentage of disposable income 53%

isn't this an average of all Thai Households? Can you honestly compare the average Thai household to a western one? Don't you think rather than looking at Thai household debt which is being discussed you should be discussing Thai households WITH debt. i think this table compares apples with oranges really, what percentage of households have debt?

I think the figures are misleading as although total household debt may be low those with debt may be over indebted. Secondly, black market debt plays a big role in Thai society and loan sharks are significantly more prevalent than in western countries where it is outlawed. Obviously, debts to loan sharks would not be able to be recorded.

What is the difference between Thai household debt and Thai households with debts?

[farang000999]

I have one friend who is a doctor in the USA and makes $250,000 a year. He owes $415,000 on a mansion he bought and he owes $200,000 on his student loans (Harvard University).

I have a friend in Thailand who is a janitor. He makes $2,300 a year. He is totally debt free.

It just goes to show you that even janitors in Thailand are doing better than doctors in the USA.

Edited October 23, 2012 by farang000999

[n0mad]

Thai household debt as percentage of disposable income 53%

US household debt as percentage of disposable income 130%

UK household debt as percentage of disposable income 176%

Canada household debt as percentage of disposable income 140% (2009)

Australia household debt as percentage of disposable income 150%

There is a gold shop on every corner in Thailand and the trade is is 22 to 23 carat range. Jewelry in Thailand is not like jewelry in other countries. You would know that if you had ever lived in Thailand. You can pay your utility bill with a gold ring in about 20 minutes almost anywhere in Thailand. You can't do that with a bicycle.

You missed my point again. Gold rings and gold jewelry in Thailand are the same as cash and that is not the same as the US or 98% of other countries in the world.

Thai household debt as percentage of disposable income 53%

isn't this an average of all Thai Households? Can you honestly compare the average Thai household to a western one? Don't you think rather than looking at Thai household debt which is being discussed you should be discussing Thai households WITH debt. i think this table compares apples with oranges really, what percentage of households have debt?

I think the figures are misleading as although total household debt may be low those with debt may be over indebted. Secondly, black market debt plays a big role in Thai society and loan sharks are significantly more prevalent than in western countries where it is outlawed. Obviously, debts to loan sharks would not be able to be recorded.

What is the difference between Thai household debt and Thai households with debts?

Thai house holds with debt only captures those households who have debt, Thai household debt captures those households with no debt as well as those with debt. Those households with no debt would artificially reduces the figure you quoted.

[chiangmaikelly]

Thai household debt as percentage of disposable income 53%

US household debt as percentage of disposable income 130%

UK household debt as percentage of disposable income 176%

Canada household debt as percentage of disposable income 140% (2009)

Australia household debt as percentage of disposable income 150%

There is a gold shop on every corner in Thailand and the trade is is 22 to 23 carat range. Jewelry in Thailand is not like jewelry in other countries. You would know that if you had ever lived in Thailand. You can pay your utility bill with a gold ring in about 20 minutes almost anywhere in Thailand. You can't do that with a bicycle.

You missed my point again. Gold rings and gold jewelry in Thailand are the same as cash and that is not the same as the US or 98% of other countries in the world.

Thai household debt as percentage of disposable income 53%

isn't this an average of all Thai Households? Can you honestly compare the average Thai household to a western one? Don't you think rather than looking at Thai household debt which is being discussed you should be discussing Thai households WITH debt. i think this table compares apples with oranges really, what percentage of households have debt?

I think the figures are misleading as although total household debt may be low those with debt may be over indebted. Secondly, black market debt plays a big role in Thai society and loan sharks are significantly more prevalent than in western countries where it is outlawed. Obviously, debts to loan sharks would not be able to be recorded.

What is the difference between Thai household debt and Thai households with debts?

Thai house holds with debt only captures those households who have debt, Thai household debt captures those households with no debt as well as those with debt. Those households with no debt would artificially reduces the figure you quoted.

You think there are households in Thailand with no debt?

[n0mad]

You think there are households in Thailand with no debt?

Plenty, and also plenty with only black market debt through loan sharks which are not counted in the figures you posted.

[TommoPhysicist]

You think there are households in Thailand with no debt?

My household in Thailand has no debt.

Neither does my MILs household.

So that's two for a start.

[chiangmaikelly]

You think there are households in Thailand with no debt?

My household in Thailand has no debt.

Neither does my MILs household.

So that's two for a start.

I have 300% so I make up for you.

[farang000999]

You think there are households in Thailand with no debt?

Definitely.

[chiangmaikelly]

You think there are households in Thailand with no debt?

Definitely.

Well, I'm odd as almost everyone I know has purchased a car, motorcycle and a house. So they all have a job and debt. Of course I don't know any farmers who farm for a living. I guess the average of people I know and the people you know is about 53% of Thai households with debt. Which is not that bad when you look at the rest of the world.

[simple1]

The whole discussion on the average level of household debt in Thailand is not provable. The vast majority of Thai's do not pay income tax. Pay slips/company returns are required for around six months to obtain a loan for a car/house etc so naturally only those who pay tax would be available for data analysis.

An example; a member of my Thai family has a business moving goods/people around Thailand with his pickup; doesn't have a company set up, doesn't pay tax, so couldn't get a loan for a new pickup. His monthly gross income is around 35k. However, a member of family who is a teacher obtained a loan on a 120k baht deposit (money from selling his old pickup, did not have to provide a savings history) & the monthly repayment is 9.4k baht a month. Note her teachers monthly wage is 12k a month with an annual bonus of one month salary. She doesn't pay any rent as she lives in her family house.

As already mentioned Thai's will take out loans on the black money market. An example of cost is 30% a month (interest only-no capital repayment) if no gold/chanote etc as security. Another example black money loan with security is around 10% a month (interest only-no capital repayment). This is in Pattaya, maybe different rates in other provinces.

[chiangmaikelly]

The vast majority of loans in Thailand are low or no interest share loans. A group of Thai people band together and pool resources. When one wants a loan the others make the loan. Teachers, doctors, government or bar workers all have these share arrangements. 50% of the economy is off the books guys what do you expect. These are not the loan shark loans but of course those too exist. Then too are the Chinese family loans to buy multi billion dollar hotels.

[Heng]

"Share" loans vary quite a bit interest wise but you can't really say they are generally interest free or 'low.' In groups with high liquidity, almost no one will ever 'bid' to take the loan so in those cases it's true, these share meetings are more like social events. In groups where there are folks who are constantly low on cash, then the interest bidding is competitive and can be comparable to loan shark/black market rates.

:-)

[simple1]

The vast majority of loans in Thailand are low or no interest share loans. A group of Thai people band together and pool resources. When one wants a loan the others make the loan. Teachers, doctors, government or bar workers all have these share arrangements. 50% of the economy is off the books guys what do you expect. These are not the loan shark loans but of course those too exist. Then too are the Chinese family loans to buy multi billion dollar hotels.

I had forgotten about this aspect of no or low interest Thai loans, saw it in operation amongst Thai women when living in Australia.

[chiangmaikelly]

"Share" loans vary quite a bit interest wise but you can't really say they are generally interest free or 'low.' In groups with high liquidity, almost no one will ever 'bid' to take the loan so in those cases it's true, these share meetings are more like social events. In groups where there are folks who are constantly low on cash, then the interest bidding is competitive and can be comparable to loan shark/black market rates.

:-)

I guess I will have to take your word for it as I never knew a share loan that was high interest and I have seen quite a few in the construction trades among people with very little cash. Also a lot of teachers that were property rich but cash poor.

[Heng]

That said, I think it's more common (again, just in my experience and opinion) for folks here to actually want to hold or possess the titles and deeds to their property, homes, buildings, land, etc. as opposed to "enjoying" the tax benefits of continuing to pay it off as in countries with more developed tax systems.

The slightly more cohesive family unit here also means more pressure to produce 'inheritance' for the next generation. And because of the whole 'deed in hand' preference of not really owning it until it's paid off and "in hand," there's more urgency to "get these home" instead of leaving them at the bank (under bank ownership). This cultural difference is a major factor in lower 'on the books' debt levels.