4 Mio Baht. How and what? Safe and simple?! For Family.

[moonseeker]

I got another post running, this is related to that situation. The cash/Thai part.

"Invest" 4 Mio Baht safe, simple for wife and 2 kids left after death.I am aware we are talking Fixed Deposits and such. But maybe some members have concrete names of instruments? Banks? I have never dealt with Thai banks, unfortunately.

2 Mio: Long-term, not easily accessible, growing.....

1 Mio: 12 months rollover, interest paid out.

1 Mio: 12 months, but possibility to withdraw if need

Open and very grateful for any suggestions. The family will have a steady, sufficient income, transferred from abroad. Also mother has good job running couple of businesses, but at some point not too far want her to slow down, or she will end like me after a lifetime of hard work only. THX. all and Happy New Year. MS>

[wesleyh]

Mr Moonseeker,

I would suggest to also think about how mutch effort/energy you want to put in it.

For example

If you like to spend time & energy in it the 2M you could invest in stock's but that would require you to look

at companies, understand how they make their profits and if it's a good time to buy or to sell them and last

but not least how do you deal with possible losses or a strong drop in stock prices ?

If you say no i prefer to have a good result with a minimum of risk and effort may i suggest a ETF tracker,

and more specific a index tracker what it does it act's a almost a entire copy of a stock index like say

FTSE100, DJI, NASDAQ, SET, EUROSTOXX50,... the beautifull part of a index tracker is that it's almost

impossible to loose all the money and as the index increases in value so does the tracker you just have to once

and while like when you want to sell...

1 Million i would put in bonds of companie's (corporate bond) with a good rating and if it's possible that they are also convertible to

stock's if they reach their expire date. Or buy a standard house and let a person rent it...

The other one million i personally would just take a savings account the interest is not great but you can easily access the

money, however if you would like to have a beter interest rate on the savings you could also have a savings account in a foreing

currency. The upside is that certain countries offer a higher interest rate the down side however is the exchange rate between

currencies.

But think about this never invest what you are not prepared to loose, don't use leverage it can give you extreme good result but also

make you loose mutch more money.

I hope the answer or part of it can be usefull for you.

[meatboy]

4million to invest for your wife and kids? so why take any risks.

that is a lot of money for thais.

i sugest you put it into several banks some of which are paying more than 3%,eg.cimb. 3.20% x 13months.

at an average of 3% 4million bht.will give you a return of 120,000bht.a yr.and any tax withheld you can claim back.

then there is a 3yr.savings acc.over 3yrs.paying 4.10% for a fixed amount every month LH BANK min.1,000bht max 16,500bht.over 3yrs.so you can put the interest you earn on the 4million into that.

then there is gov.bonds available shortly [see my post new gov.bonds]

i always say if you dont need the money now DONT BE GREEDY

[AyG]

For the more liquid part of your savings, I'd suggest you have a look at Bank of Ayudhya's Mee Tee Dai account. It's not a fixed deposit, but a savings account with a limited number of free withdrawals per month. The current interest rate is 2.35% for balances between 100,000 and 10,000,000 Baht. This isn't a new account type, and I don't believe the 2.35% interest rate is promotional.

http://www.krungsri.com/bank/en/PersonalBanking/DepositProducts/SavingsDeposit/MeeTaeDaiSavings.html

One possible drawback is that the account can't be in joint names.

[Briggsy]

Are you talking about trusts or the like here?

I would imagine most fixed term accounts in Thai banks would cease upon the death of the account holder, unless of course you put the money in your beneficiary's name.

[meatboy]

just been talking to the wife about this,and as she says 4million IS a fair amount of money.

most of us want to make sure who we leave behind when we return to our maker are well looked after.

BUT as my wife is as tight as a bus load of scots.nobody that includes any family members will get f.all.

as we know back in the uk.it can be put in trust BUT here well if she is not strong enough to withstand any presure from outside interferance it will soon end up elsewhere.so yes it can be a big worry.

[jcnbkk]

4million to invest for your wife and kids? so why take any risks.

that is a lot of money for thais.

i sugest you put it into several banks some of which are paying more than 3%,eg.cimb. 3.20% x 13months.

at an average of 3% 4million bht.will give you a return of 120,000bht.a yr.and any tax withheld you can claim back.

then there is a 3yr.savings acc.over 3yrs.paying 4.10% for a fixed amount every month LH BANK min.1,000bht max 16,500bht.over 3yrs.so you can put the interest you earn on the 4million into that.

then there is gov.bonds available shortly [see my post new gov.bonds]

i always say if you dont need the money now DONT BE GREEDY

Curious. Are savings acc's, CD's and the like in thai banks insured up to a certain amount by an insurer or the gov't? similar to FDIC in US.

[a10ams]

Buy an E-type Jaguar, have fun driving it and double your money in six years.

[Muhendis]

Additional to previous sound advice, you might like to take a look at mutual funds. Similar to unit trusts these offer safety in numbers i.e. your money is distributed between hundreds of companies in your fund so any losses are small. Costs will be slightly higher but the potential for reasonable overall gains exceeding 7% is probable. This can be arranged for you by your bank.

[AyG]

Curious. Are savings acc's, CD's and the like in thai banks insured up to a certain amount by an insurer or the gov't? similar to FDIC in US.

Savings accounts, yes. CDs, no.

Currently safe up to 50 million, though the plan is this will be progressively reduced to 1 million.

[Maestro]

Safe and simple: fixed deposit accounts with major banks, perhaps also some mutual funds.

Moonseeker, I am interested in the 12 months rollover fixed deposit you mentioned and wonder what banks offer it. My problem is that I am in Thailand at irregualar intervals and when a fixed deposit matures I am not there to re-invest it at an optimal interest rate. For example, in February 2013 I put some money in a fixed deposit at Siam Commercial Bank (SCB) at 2.88%, which matured in October 2013. It so happens that I did not get back to Thailand until December 2014 and will leave again next month. SCB would not accept written or telephoned instructions for its re-investment. Upon maturity, SCB changed it into a 6-month rollover deposit, first at 2%, then in April 2014 at 1.35% and in October 2014 again at 1.35%

What would be an optimal rollover interval? SCB no longer publishes its fixed deposit interest rates on its website and I would like to change to another bank, which is why I would like to find out what banks offer a rollover fixed deposit account.

[mrhappyniceguy]

Trusts: Are you happy making 1-4% interest (if your lucky)? Are you also calculating the fees you are paying? Trusts also carry risk, especially REIT's.

Keeping you money in the bank is also a risky proposition. When you factor in fees and inflation, your probably making 1-2% of you are lucky.

Optimal rollover internal? There is no optimal rollover interval. The banks always decrease their rates on deposit because they know you are too lazy to focus on reinvesting.

[meatboy]

Safe and simple: fixed deposit accounts with major banks, perhaps also some mutual funds.

Moonseeker, I am interested in the 12 months rollover fixed deposit you mentioned and wonder what banks offer it. My problem is that I am in Thailand at irregualar intervals and when a fixed deposit matures I am not there to re-invest it at an optimal interest rate. For example, in February 2013 I put some money in a fixed deposit at Siam Commercial Bank (SCB) at 2.88%, which matured in October 2013. It so happens that I did not get back to Thailand until December 2014 and will leave again next month. SCB would not accept written or telephoned instructions for its re-investment. Upon maturity, SCB changed it into a 6-month rollover deposit, first at 2%, then in April 2014 at 1.35% and in October 2014 again at 1.35%

What would be an optimal rollover interval? SCB no longer publishes its fixed deposit interest rates on its website and I would like to change to another bank, which is why I would like to find out what banks offer a rollover fixed deposit account.

you can always pm.me if you need any info[int.rates] the wife is at the bank every 2weeks,and as we have quite a few fixed accs.we are always on the look out for best buys.

fixed accs.at,scb,land and house,tgsb and next week she will open one at cimb.3.20% 13months.

its no trouble as all the banks are all together on one floor.

[maidee]

dont have a friend here in thailand ? can a notary make a contract ...

give him the 4 million and ask to send 30k baht per month, till nothing left ...

can be in a bank account and the friend can get the intrest, till nothing left ?

[luis888]

Buy an E-type Jaguar, have fun driving it and double your money in six years.

I like this suggestion.

Enjoy your life and your possessions, when you're dead and gone, they can decide what they want to do with the inheritance. If intelligent, they'll do something with it and enjoy it too, if not, what do you care, you're dead. At least you can rest in peace, you left / gave them a choice / chance.

[khunbillmex]

Village Loan Program? 4 million may be way too much to invest [wish it wasn't] but my wife has a substantial sum invested in her village and gets double digit returns.

Downside according to her is that the potential for loan demand may not meet meet village funding level i.e. fewer borrowers than baht available .So far so good.

Perhaps other TV members can give more details/experiences?

[AyG]

Village Loan Program? 4 million may be way too much to invest [wish it wasn't] but my wife has a substantial sum invested in her village and gets double digit returns.

Downside according to her is that the potential for loan demand may not meet meet village funding level i.e. fewer borrowers than baht available .So far so good.

Perhaps other TV members can give more details/experiences?

There was a case recently (in the Rangsit area, I think) where the administrators ran away with all the money. This is a risky investment.

[sunny09]

I have an option for you Mr. Moonseeker. Join some whom you know in his business as partner and earn handsome return !! You can join me too.

[A1Str8]

mio. What's that, code word for satang?

[attrayant]

My suggestion is real estate.

In the first year I moved here I bought a shell of a house and renovated it. Make no mistake - it was typical Thai construction which means EVERYTHING needed to be done-over. The property was 1.1 million and the renovation was another 400,000. I currently rent it for 8,500 per month, which is an annual return of more than 25% based on the renovation cost of 400K. If you factor in the purchase price of the house, then the return is more like 15%. By the end of 2015, I will have completely recovered the costs of the renovation.

Of course this required quite a bit of effort, so it may not be for those looking for maximum return on minimal effort.

[sead]

Buy 2-4 condos and rent out. The only option for me atleast. If you dont know about stocks already then dont even think about it. Dont buy new condos they are a ripoff and very small.

[AyG]

My suggestion is real estate.

In the first year I moved here I bought a shell of a house and renovated it. Make no mistake - it was typical Thai construction which means EVERYTHING needed to be done-over. The property was 1.1 million and the renovation was another 400,000. I currently rent it for 8,500 per month, which is an annual return of more than 25% based on the renovation cost of 400K. If you factor in the purchase price of the house, then the return is more like 15%. By the end of 2015, I will have completely recovered the costs of the renovation.

Of course this required quite a bit of effort, so it may not be for those looking for maximum return on minimal effort.

Your calculations of return are utterly screwy.

You spent 1.5 million (1.1 to buy + 0.4 to fix up). You're getting an income of 102,000/year (8,500 x 12). The return therefore is 102,000 / 1,500,000 * 100 = 6.8%. That, however, doesn't allow for tax that must be paid on the rental income, the financial value of your time doing the fixing up, costs of financing the purchase (if any) (and if there weren't, the lost financial opportunity had you put the money in the bank instead), depreciation in the value of the property.

And that's not considering the period when you weren't getting any income whilst doing the place up, periods you may have being tenantless, the costs of insuring the place, the value of your time in getting tenants, dealing with them and fixing any problems plus the material/labour costs for fixing the problems.

In short, this is a poor value, decidedly risky investment. Probably better just to keep your money in the bank.

[Naam]

Your calculations of return are utterly screwy...

...but very creative with embedded science fiction that somehow reminds me of "beam me up Scotty!"

[johnopolo]

There's one critically important rule that you must NEVER break: do not EVER give your money to a third party to invest on your behalf. Get advice from third parties by all means but place the investments directly yourself - you want to be the only person with direct control over your money.

And please do avoid the many thousands of "investment scams" out there. How will you know whether what you are being offered is a scam? That's easy, just start a discussion in these forums - you'll soon get a reality check!

[khunPer]

»Invest" 4 Mio Baht safe and simple…«

Safe means fixed deposits in 4 different banks, 1 million each as that will soon be the maximum guarantee cover. To cover inflation and a small surplus you will need some of the special offers for fixed deposits, running for a limited time (some 3% pa); a normal 12-month deposit (around 1.75% pa) hardly (or just) cover average inflation. Normally interest is not paid out, but I have seen one special limited fixed deposit in Bangkok Bank with interest being paid semi-annually.

To my knowledge in Thai banks one can always reclaim a fixed deposit, but loose the interest for the last ongoing period. I have asked specifically about a 12-month fixed deposit with interest paid out (transferred), but that was not possible; however may just be the easy answer from a bank assistant, so do check.

Thai banks will withhold 15% tax on the interest, so 1.75% listed interest hardly comes to 1.5% net; and glorifying 3% only 2.5%.

May I kindly mention what I do for my GF, child and some of my own savings in Thailand; taking a bit risk, but still so simple that you don’t need any (or only very little) investor experience.

I use the banks so-called Fund Books, mutual funds. Kasikorn (Kasikorn Asset Management) seems to have the best information in English:

http://www.kasikornasset.com/EN/MutualFund/ProductsFundFacts/Pages/Default.aspx

-However most or all banks have similar products. I use Kasikorn, SCB and Bangkok Bank.

For fixed deposit with no interest paid, I use bonds that give a better outcome than a fixed deposit. Bonds can be sold at any time at daily rate and the money will be accessible the following bank day. My banks have advised me that there are no taxes on bonds from a Fund Book. The interest (dividend) is slightly higher than a 12-month fixed deposit and some mutual funds accumulate up around 5% pa.

I have been using bond Fund Books for “parking” any money I take in from abroad and don’t need instant access to, for example if there is a good exchange rate I may transfer a half or full years budget and “park” most from 3 to 9 month, which so far have worked well and given me a “tax-free” surplus.

For dividend paying Fund Books I use the so-called “LTF” (Long Term Funds); they are available both with and without dividend paid. The dividend depends of performance, so there is no guarantee how much dividend will be paid, or if once or twice annually, or that dividend will be paid every year. The LTFs are available both as a mix of stocks and bonds, or stocks only. There is no taxation on dividends (any taxes has already been withhold) and no capital gain tax of up to 500,000 baht reclaim (sold funds) annually, if the funds have been held for 5 years and more (“long term”); i.e. not easy to sell on short term. Historically – with no guarantee for future performance – over the past some 8 years I’ve been using them, the paid dividend has averaged around 4% annually and the remaining value growth has been in the area of 10% a year. The accumulating Fund Books I use has been growing around 15% annually.

There are a number of other Fund Books (mutual funds) available in all kind of investments – i.e. Global, currency, property, gold etc. etc. – but they are subject to capital gain tax (to my knowledge 15%, however there may be some deductions) and a decision of risk factor; i.e. the higher the risk, the higher the gain chances, and also possibility for loss.

Looked at (very) long term, stocks (equity) have been performing better than bonds, and bonds have been performing better than fixed bank deposits.

The Fund Books from one or a couple of banks are in my opinion (very) easy instruments for a Thai to handle with no investor knowledge – and better than a fixed deposit or gold hidden somewhere in the house...

Edit: With your post in mind, the Fund Books must be in the Thai family’s name(s). You can have two names on one book (may be, so that both book-holders need to sign).

Edited January 2, 2015 by khunPer

[attrayant]

That, however, doesn't allow for tax that must be paid on the rental income

It wasn't meant to be an exhaustive business plan, and yes there are lots of variables. The OP needs to consider this when getting investment advice from strangers in the Internet.

I receive the rent through my inlaws, as the property is in their name. I don't know what kind of tax they pay, but I suspect most small-time business aren't too concerned about taxes here. You think the roti vendor who walks up & down the street pays taxes on the pittance he makes? Anyway, if that is a concern of the OP, then he's free to factor it in to his personal situation.

the financial value of your time doing the fixing up

Yes there are opportunity costs hidden in any investment. It wasn't merely an investment of money, it was one of time and labor as well.

costs of financing the purchase (if any)

The OP says he has cash to invest. Why do you factor financing into this?

depreciation in the value of the property.

Where do you live that renovated real estate depreciates over time? Detroit perhaps?

This was most certainly NOT a poor value for me, as I said the renovation investment will have been recovered by the end of this year.

Can you show me a bank that'll return 100% on 400K after four years?

I was just giving the OP another option to think about, not attempting to draft up a formal investment strategy.

Edited January 2, 2015 by attrayant

[attrayant]

...but very creative with embedded science fiction that somehow reminds me of "beam me up Scotty!"

What the hell are you taking about? It's too early to be drinking. Maybe you meant to post in another thread?

Edited January 2, 2015 by attrayant

[Naam]

...but very creative with embedded science fiction that somehow reminds me of "beam me up Scotty!"

What the hell are you taking about? It's too early to be drinking. Maybe you meant to post in another thread?

digesting your yield calculation makes a hard drink nearly mandatory

[attrayant]

...but very creative with embedded science fiction that somehow reminds me of "beam me up Scotty!"

What the hell are you taking about? It's too early to be drinking. Maybe you meant to post in another thread?

digesting your yield calculation makes a hard drink nearly mandatory

I said nothing about APY in my post. I was referring to your "science fiction" remark.

Referring to the 400K to renovate and an annual return of 102K. Please be so kind and sober as to tell me your return calculation on those figures.

Anyway this is all pointless bickering unless you two think the OP is going to copy & paste my figures into his retirement plan.

[AyG]

...but very creative with embedded science fiction that somehow reminds me of "beam me up Scotty!"

What the hell are you taking about? It's too early to be drinking. Maybe you meant to post in another thread?

It's not Naam that is a little detached from reality, and there's really no need to be abusive to other posters.

Excuse the formatting of the following:

"It wasn't merely an investment of money, it was one of time and labor as well."

But you don't factor into your returns the cost of your labour. Is your time really worthless? Is there nothing else you could do with your time to make money?

"The OP says he has cash to invest. Why do you factor financing into this?"

If the OP has free cash he could put in on deposit in Thailand and get perhaps 3%/year. That needs to be taken into consideration. Is the excess return (after all costs) of investing in property better than simply putting the money in the bank (which is much lower risk and a lot less effort)?

"Where do you live that renovated real estate depreciates over time? Detroit perhaps?"

Duh! How about Thailand, where people strongly prefer to buy newly built property, the standards of construction are generally so poor that properties have a very short life, and neighbourhoods rapidly go down hill, dragging property prices with them.

"Can you show me a bank that'll return 100% on 400K after four years?"

I can't. But then your property investment hasn't done that either. You're totally ignoring the 1.1 million you had to pay to buy the property in the first place and all the other costs and taxes associated with the property.

My guess is that you're returning somewhere between 3% and 5%/year taking all costs into account. This is only fractionally more than you could get putting the money in a bank, but with a lot, lot more risk.