Thais Dont Understand Financing/money

[samran]

Reality check. If Thai's have the secret to the business world.... why as a nation is it so poor?

Cause there is ineffective distribution of wealth.

While your points are valid (and no doubt the "man" keeps a lot of people down.... but there is PLENTY of playing field left for the disciplined and ambitious), one thing you missed IMO is that lack of work ethic or to be more politically correct the 'culture of being content with their own status quo' among large portions of the population. One can find uneducated laborers in many other countries that aspire to one day be construction magnates... here, it seems that overtime is an option for when they were in the mood or just a bit short on pocket money.

Look, I see what you are saying, and there is a balance to be had somewhere. Whether it is the 'man' or not, there are inherent structual causes in the Thai economy that causes inequalities in many areas. I'm all for ripping down these barriers so that those who want to can actually shine. De-regulation rather than over regulation. And yes, there is culture, work ethic etc etc etc, and speaking from an economic perspective (not accounting) contentment with ones existence rates highly and this does not have to be linked with monetary reward.

But as someone here mentioned, I really think there is a general lack of opportunity for many people to be somewhere in the middle of a countruction magnate and a pleb on a building site. I think you only have to look at graduates in Thailand, many of whom struggle to find a job, and are either faced with the choice of slim pickings in their chosen field or going out on their own. A friend at work (thamasaat grad I think) was telling the story about how one of her friends ended up as ticket seller at a BTS station. Go figure? Not everyone is, or wants to be an entranpaneur.There is still lots of room for the Thai economy to actually expand to take advantage of the skill set there.

[plachon]

Reality check. If Thai's have the secret to the business world.... why as a nation is it so poor?

Cause there is ineffective distribution of wealth.

While your points are valid (and no doubt the "man" keeps a lot of people down.... but there is PLENTY of playing field left for the disciplined and ambitious), one thing you missed IMO is that lack of work ethic or to be more politically correct the 'culture of being content with their own status quo' among large portions of the population. One can find uneducated laborers in many other countries that aspire to one day be construction magnates... here, it seems that overtime is an option for when they were in the mood or just a bit short on pocket money.

Look, I see what you are saying, and there is a balance to be had somewhere. Whether it is the 'man' or not, there are inherent structual causes in the Thai economy that causes inequalities in many areas. I'm all for ripping down these barriers so that those who want to can actually shine. De-regulation rather than over regulation. And yes, there is culture, work ethic etc etc etc, and speaking from an economic perspective (not accounting) contentment with ones existence rates highly and this does not have to be linked with monetary reward.

But as someone here mentioned, I really think there is a general lack of opportunity for many people to be somewhere in the middle of a countruction magnate and a pleb on a building site. I think you only have to look at graduates in Thailand, many of whom struggle to find a job, and are either faced with the choice of slim pickings in their chosen field or going out on their own. A friend at work (thamasaat grad I think) was telling the story about how one of her friends ended up as ticket seller at a BTS station. Go figure? Not everyone is, or wants to be an entranpaneur.There is still lots of room for the Thai economy to actually expand to take advantage of the skill set there.

Good post samran, esp. the last sentence. At one point in the not so distant past, Thailand had a real skills shortage in industry and one only had to graduate in almost any degree and have a reasonable level of english and a company would snap you up immediately.

This situation could be contrasted with Vietnam where due to politics and the US embargo up to 95, an engineering graduate might be lucky to get a job in his/her field and often end up plying a samlor for a living.

but times have changed in VTM and Thailand and now there is an oversupply of graduates in many fields and its often more a mtter of "sen" (i.e. inside links) of whether you can land a job or not. Nearly every govt. official hired now has bribed there way to their post, esp in the TAOs, unless they have an influential relative to smooth the way. this means that the cream doesn't rise to the top and pushes down Thailand's competitiveness in the process, while otherwise well qualified and keen young people are demoralised and drift into a job which doesn't utilise their skills tot he full. Meanwhile, Vietnam seems to be taking up the slack and moving forward, although I don't doubt for a minute that connections and money don't count for a lot there too.

But if wealthy people who've "made it" or inherited it don't want to flaunt their wealth and live a frugal life, then all credit to them I say. If they also decide to spread it around in society by supporting "good causes", other than the local temple roof, then even better!

[creation2474]

What is the deal with these Thais who own shop houses worth 40 million baht+, yet only have a tiny little business downstairs selling food or newspapers?

Why dont they sell the house, and buy in a cheaper nicer area, and use the positive cash flow to create another business or invest in the financial markets? From the looks of them, you get the impression that they are not hanging out in The Emporium. I imagine that they do not sell their home because its been in their family, etc. So their children do not go to University because they have a business selling newspapers, etc.

Very bad money management, no wonder there are such drastic differences between rich and poor in Thailand. A very small minority of the people understand money and business.

"We dont use banks, we just buy gold necklaces and pawn them a month later losing 1/2 the value"

Honestly, I have not idea about the interest rate of mortgage loans in Thailand. But provided that it is below 5% p.a. maybe it would be wiser to mortgage the property and invest the money (e.g. through a unit trust). There are two advantages doing that: 1.: To minimize the risk of losing money (it is less risky to spread the investment than keeping it in one single property) and 2.: That the return from the investment through the mutual fond is (should be!!) a lot higher than 5%, resulting in a positive net return, without any effort, practically speaking. And the property would still be in hands of the family.

[Dakhar]

Lets see here, it is 7PM on a Sunday, and we still have staff on the premisses. Yes, they are kicking back sucking down some brew and singing Karoke. But the point is, this is Sunday, the ONE day out of the week they don't have to be here, and yet they are.... an no overtime is given/granted or offered.

We have a labor crew that works on the grounds 7 days a week, our driver and our maid works 7 days a week, from dawn and beyond dusk.

Yes, I see the "lazy" Thais, but I don't know any of them. The ones I have met work long hours....

For me, I believe in working smart not hard. In other words I make an effort to make sure if I am working, it is a pfofitable affair. Thais seem to just work... to work, without really worrying about the out come. To me that is the difference of the work ethic between the west and the east.

As for rideing a moped and being rich.... Well, some folks are happy on a moped, and some folks want to keep their money for other generations. I know I want my son to have more than I have had, and if this means I go without a BMW M3, so be it.

As for the wealthy that have to buy every new TV, Ipod and what not.... good, because it trickles down. If the wealthy refuse to spend.... the economy will slow down.

Edited November 5, 2006 by Dakhar

[Dakhar]

Reality check. If Thai's have the secret to the business world.... why as a nation is it so poor?

Heng, I do agree with your diversafication. My wife's mother owns apt's, a taxi van, a tour buss, farm land etc. Where did all the money come from.... Heck I can't figure that one out. When I lived in Taiwan it was the same thing, the richest people I ever saw on mopeds.

Reality check, who said Thais had the secret to the business world? My response was to the OP who was suggesting that those with central in-town real estate + property holdings were those who didn't understand financing and/or the nature of money and business.... which as stated, IMO couldn't be farther from the truth.

Heng, no disrespect intended or aimed at you. My post was a broad brush approach. I know you and your family are successful, and I don't question your posts in this matter at all. (BTW your English is better than mine.)

[Heng]

What is the deal with these Thais who own shop houses worth 40 million baht+, yet only have a tiny little business downstairs selling food or newspapers?

Why dont they sell the house, and buy in a cheaper nicer area, and use the positive cash flow to create another business or invest in the financial markets? From the looks of them, you get the impression that they are not hanging out in The Emporium. I imagine that they do not sell their home because its been in their family, etc. So their children do not go to University because they have a business selling newspapers, etc.

Very bad money management, no wonder there are such drastic differences between rich and poor in Thailand. A very small minority of the people understand money and business.

"We dont use banks, we just buy gold necklaces and pawn them a month later losing 1/2 the value"

Honestly, I have not idea about the interest rate of mortgage loans in Thailand. But provided that it is below 5% p.a. maybe it would be wiser to mortgage the property and invest the money (e.g. through a unit trust). There are two advantages doing that: 1.: To minimize the risk of losing money (it is less risky to spread the investment than keeping it in one single property) and 2.: That the return from the investment through the mutual fond is (should be!!) a lot higher than 5%, resulting in a positive net return, without any effort, practically speaking. And the property would still be in hands of the family.

Actually the property would quite possibly be in the hands of the Lamsam or Sophonpanich family. Instead of... 'why don't they sell?', your point of view is 'why don't they take out a loan?' The answer is: there are plenty of families who DO sell or leverage themselves with a mortgage loan or overdraft with their property as collateral. It's nothing new. For those who don't, well... as mentioned, there are plenty that don't need to.

[Heng]

But as someone here mentioned, I really think there is a general lack of opportunity for many people to be somewhere in the middle of a countruction magnate and a pleb on a building site. I think you only have to look at graduates in Thailand, many of whom struggle to find a job, and are either faced with the choice of slim pickings in their chosen field or going out on their own. A friend at work (thamasaat grad I think) was telling the story about how one of her friends ended up as ticket seller at a BTS station. Go figure? Not everyone is, or wants to be an entranpaneur.There is still lots of room for the Thai economy to actually expand to take advantage of the skill set there.

Yeah, I hear you. Most of the folks in my NIDA 'young executive' -which basically just meant about 5 years of working for the CPs, SCBs, PTTs of Thailand) MBA class of 2000 were looking at salaries of the equivalent of $500-$900 a month. Out of a class of 40 people, only maybe 5-6 were looking at salaries in the $1500-$2000 a month range (there were even a handful that ended up working for less than the equivalent of $500 a month; often at the same companies that temporarily released them to do MBA's).... that's why most who had the option or drive simply went back to their family businesses -typically using their degree and work experience as their capstone and tapping an internal family loan to engage in their own tangent of the family biz- or started their own businesses.

Not everyone wants to be an entrepreneur, but it's a much better bet (IMO) than waiting for societal norms to change and hoping that the well known barriers you mentioned will crumble. Of course I'm not saying it is for everyone... IMO it's NOT for anyone -without prior experience- who has to do it with debt... but it is a valid option for those who have solid family foundations and can start to build something on the side, piece by piece.

[Heng]

Heng, no disrespect intended or aimed at you. My post was a broad brush approach. I know you and your family are successful, and I don't question your posts in this matter at all. (BTW your English is better than mine.)

No worries at all Dakhar. And none aimed at you either. I was merely concerned that you thought I was making a broad brush generalization myself.