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

[attrayant]

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

No intention of being abusive, but that post really did seem like it belonged in a thread about the new Star Trek movie. I'm still scratching my head over the sci fi reference.

Duh! How about Thailand, where people strongly prefer to buy newly built property

And I strongly prefer to drive a Ferrari. What I can actually afford is a totally different story. There is still a huge pool of available renters out there, and you'll have a waiting list of renters if you've renovated the property nicely.

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.

I'm not ignoring that. I didn't factor it in because, while not technically a liquid asset, that money would be easy enough to recover (plus the appreciation based on improvements) if needed by selling the property.

And since I know you're going to say it: yes there's no guarantee of getting a buyer. Yes there is risk associated with any investment. I was merely giving a suggestion based on what I did. Nowhere did I say that results are guaranteed or that this is what everybody should do.

Edited January 2, 2015 by attrayant

[bobthomas]

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.

1.5 M investment- it produces 8,500/month- and that is 15% per year?

I need to use your math on my finances- I could double my returns in a flash.

A good rental return would be 1% per month (or 12%/year) - So that would be 15,000/month on your 1.5 M investment

Bob

[monkeycountry]

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.

You have a funny way of calculating ROI, but yes, I can show you that bank, if I can calculate the way you do.

I put 10,000 baht in the bank at 3% interest = 300 baht / year. I then put 1,000 baht in the same bank in another account also at 3% interest = 30 baht/year. I now disregard the 10,000 baht i put in the first account (like you disregard the 1.1 million you paid for the house), and only consider my 1,000 baht account my investment. My total interest is now 300 + 30 baht = 330 baht / year and my investment is 1,000 baht. This gives a return of 330/1000 = 33% / year or 132% in 4 years, way better than your 25% (100% in 4 years). Had I only put 500 baht on the second account, I would be making a whopping 66% / year :-)

Using you method, I can easily get 10 or even 100 times better return than your 25% / year on any investment.

Another example, similar to your house investment.

I buy a house for 1 million. I renovate it for 1,000 baht (yes only one thousand). Now I rent out the house for say 5,000 baht/month, or 60,000 baht year. As I only spent 1,000 baht renovating it, I now have a return on investment of 60,000 / 1,000 = 6000% / year (six thousand percent). Now that is what I call a good investment.

Of course in the real world you would have to include the 1 million I paid for the house, and it then comes to a return on investment of 6% / year.

Using your method makes no sense whatsoever, but if you insist that you are making around 25% / year on your 400k renovation, then you will have to admit that you are at the same time making 0% on the 1,100,000 you paid for the house :-)

And no, in the real world you are neither making 25% nor 15% on your investment. You paid 1,100,000 + 400,000 baht for your house, and you rent it out for 8,500 baht / month = 102,000 baht / year, hence your ROI is 102,000 / 1,500,000 = 6.8% / year, which by the way is a reasonable return.

I hope the above helps you to better understand ROI :-)

Edited January 2, 2015 by monkeycountry

[JacChang]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

»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).

Per, what is that bonds you are talking about? Is it the actual bond traded on the BEX? Or it's the mutual funds investing in bonds such as K-Cash, K-money, K-mplus, K-Cbond?

5% is a lot

[khunPer]

Jac, Post #34

Mutual funds, K-Cbond, last year 5.6% (Index 178.9 25/12-14 minus index 169,4 20/12-13 = 9.5/1.694 = 5.6%).

Looked average, 25/12-14 178.9 minus 31/12-04 124.5 = 54.4 over 10 years, 10 year average close to 4% pa (54.4/1.245 = 43.7/10 = 4.37% without calculating interest’s interest, need an app or lots of paper to do that with spots every year).

I also use SCB, but have not checked them recently, presume lower gain than K-Cbond, but use to be better than 12-month fixed; doing lots of in/out in that deposit, and happy as long as I see my deposit balance grows fair compared to what I’ve been saving and cashing out again.

That’s why I say »…some mutual funds accumulate up around 5% pa.«

Don’t know average of fixed deposits in Thai banks for the last 10 years to compare, but presume lower. I’ve been using fixed deposits for my retirement guarantee money and some emergency savings, last year 12-month fixed was around 1.75% pa, and some of the years lower than 1.5% pa, in 2010 only 0.65%, and in 2009 1.0%. The highest I’ve had was 4% one time in 2007, 6 month later down at 2.25%.

If you don’t have the knowledge and time to check and adjust your portfolio, and move it around for highest gain – still with the risk of loosing some of your savings – the mutual funds (trust funds) seems like a good instrument, even you pay a small fee or percentage for having someone looking after your savings for you – and those “looking after” are under audit from a pro third party (another bank).

[admiraldy]

when we are talking about investment , i don't think depositing your money in a bank is a good investment , especially with the low interest being paid currently at max 2.5% (after tax) , and when you deduct the inflation rate per year , which is also around 2.5 to 3% , you are in reality loosing on the real value of your money .

I have to agree with Attrayant post , that real-estate investment is the best choice for a long term investment . an investment in a well maintained condo in a central location with a reputable developer will never loose its value with time , can anyone in this forum give me 1 example of a well maintained condo in a central location in Bangkok loosing its value with time? in contrary a condo will generate income more than a bank and increase in value with time to beat inflation .

The OP has 4 million to invest , it is not a very big sum of money , however he can still manage to buy a small well maintained condo in a central location with a reputable developer .

[meatboy]

Jac, Post #34

Mutual funds, K-Cbond, last year 5.6% (Index 178.9 25/12-14 minus index 169,4 20/12-13 = 9.5/1.694 = 5.6%).

Looked average, 25/12-14 178.9 minus 31/12-04 124.5 = 54.4 over 10 years, 10 year average close to 4% pa (54.4/1.245 = 43.7/10 = 4.37% without calculating interest’s interest, need an app or lots of paper to do that with spots every year).

I also use SCB, but have not checked them recently, presume lower gain than K-Cbond, but use to be better than 12-month fixed; doing lots of in/out in that deposit, and happy as long as I see my deposit balance grows fair compared to what I’ve been saving and cashing out again.

That’s why I say »…some mutual funds accumulate up around 5% pa.«

Don’t know average of fixed deposits in Thai banks for the last 10 years to compare, but presume lower. I’ve been using fixed deposits for my retirement guarantee money and some emergency savings, last year 12-month fixed was around 1.75% pa, and some of the years lower than 1.5% pa, in 2010 only 0.65%, and in 2009 1.0%. The highest I’ve had was 4% one time in 2007, 6 month later down at 2.25%.

If you don’t have the knowledge and time to check and adjust your portfolio, and move it around for highest gain – still with the risk of loosing some of your savings – the mutual funds (trust funds) seems like a good instrument, even you pay a small fee or percentage for having someone looking after your savings for you – and those “looking after” are under audit from a pro third party (another bank).

dont know what banks you have had fixed deposits in,i have in the past 6yrs.have had no less than 3%.

at the moment me and mrs.meat are holding 3 x 15months which mature,1 in january,2 in april.

all at 3.30%,3.50% and 3.20% and as the interest doesnt come to more than our allowance,150,000bht.each we claim the tax back.so the op has 4million to find a safe place for unless he and his wife has income in thailand over the personel tax allowance 300,000bht.between them 3% plus is not to be sniffed at.

4million at 3% will give him 120,000bht.a yr.risk free.so with a little bit more interest[cimb] 3.30% till end of jan. over 13months in 10yrs.he would have more than 1,500,000bht.added to his capital.

[SinCityGr8One]

Before you invest anywhere, access Wikipedia and search for "Rule of 72". It explains what length of time your money will need to double when investing at a specific interest rate. $XXXX @ 2% Divided into 72 = 36 Years length of time for money to double. There are various financial mathematical formulas regarding interest on investments. The Rule of 72, The Rule of 70, The Rule of 69.3. There is also a simple chart that basically shows in numbers what the story says in words. Educate yourself and then decide wisely. Knowledge is power.

[steven100]

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 ?

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

that'll take about 1 week ....

[SinCityGr8One]

when we are talking about investment , i don't think depositing your money in a bank is a good investment , especially with the low interest being paid currently at max 2.5% (after tax) , and when you deduct the inflation rate per year , which is also around 2.5 to 3% , you are in reality loosing on the real value of your money .

I have to agree with Attrayant post , that real-estate investment is the best choice for a long term investment . an investment in a well maintained condo in a central location with a reputable developer will never loose its value with time , can anyone in this forum give me 1 example of a well maintained condo in a central location in Bangkok loosing its value with time? in contrary a condo will generate income more than a bank and increase in value with time to beat inflation .

The OP has 4 million to invest , it is not a very big sum of money , however he can still manage to buy a small well maintained condo in a central location with a reputable developer .

The problem with Condo Ownership in Thailand is that most properties appreciate at 1% or less per year. The wishful thinking Listing price by the Seller or Seller's Agent is just that, wishful thinking and is rarely, if ever the selling price. I can bet most Condo's sell for 10%-20% less than the Listed price. Haven't you noticed all the Condo projects that have been built over the past few years? Who is buying them? Who is buying all the resales on the Market? Why are all the resales on the market to begin with? Most importantly, why haven't they sold? If it were that great, there would be lines of potential buyers standing in line waiting for the sales office to open. There are some projects that are several years old and still have units unsold and available. 4MB will get him a closet sized well maintained Condo in a central location in Bangkok. The Condo Market in Thailand is flooded everywhere. A terrible investment IMHO.

[khunPer]

Jac, Post #34

Mutual funds, K-Cbond, last year 5.6% (Index 178.9 25/12-14 minus index 169,4 20/12-13 = 9.5/1.694 = 5.6%).

Looked average, 25/12-14 178.9 minus 31/12-04 124.5 = 54.4 over 10 years, 10 year average close to 4% pa (54.4/1.245 = 43.7/10 = 4.37% without calculating interest’s interest, need an app or lots of paper to do that with spots every year).

I also use SCB, but have not checked them recently, presume lower gain than K-Cbond, but use to be better than 12-month fixed; doing lots of in/out in that deposit, and happy as long as I see my deposit balance grows fair compared to what I’ve been saving and cashing out again.

That’s why I say »…some mutual funds accumulate up around 5% pa.«

Don’t know average of fixed deposits in Thai banks for the last 10 years to compare, but presume lower. I’ve been using fixed deposits for my retirement guarantee money and some emergency savings, last year 12-month fixed was around 1.75% pa, and some of the years lower than 1.5% pa, in 2010 only 0.65%, and in 2009 1.0%. The highest I’ve had was 4% one time in 2007, 6 month later down at 2.25%.

If you don’t have the knowledge and time to check and adjust your portfolio, and move it around for highest gain – still with the risk of loosing some of your savings – the mutual funds (trust funds) seems like a good instrument, even you pay a small fee or percentage for having someone looking after your savings for you – and those “looking after” are under audit from a pro third party (another bank).

dont know what banks you have had fixed deposits in,i have in the past 6yrs.have had no less than 3%.

at the moment me and mrs.meat are holding 3 x 15months which mature,1 in january,2 in april.

all at 3.30%,3.50% and 3.20% and as the interest doesnt come to more than our allowance,150,000bht.each we claim the tax back.so the op has 4million to find a safe place for unless he and his wife has income in thailand over the personel tax allowance 300,000bht.between them 3% plus is not to be sniffed at.

4million at 3% will give him 120,000bht.a yr.risk free.so with a little bit more interest[cimb] 3.30% till end of jan. over 13months in 10yrs.he would have more than 1,500,000bht.added to his capital.

Meatboy, thanks for the information, agree – I do use it myself at 3% at the moment – but in this post I was talking about normal 12-month deposit only. If you read my post quoted in the post above I reply to, you will see I mention the agreed period fixed terms, like 15-month at 3% p.a. (plus/minus in some banks). When the agreed period ends the savings typically continue on 3-month normal fixed (low) deposit rate; you need to withdraw at end and open a new agreed period fixed deposit to retain a high interest.

The interest rates quoted for comparison (only) to bonds are SCB standard 12-month deposit, Bangkok Bank are almost the same (normally a tiny bit higher).

I just checked with my child savings 12-month fixed in Government Savings Bank, and they are better, at present (2014 rate) at 2.50% p.a. I think GSB also have a 36-month fixed at a slightly higher rate (3% to 3½%). Thais like GSB as the government guarantee the savings. Other banks have fairly high guarantees at present, but in about a year that will be one million baht only – so if you advise 4 million in safe bank deposit that shall be in 4 banks with no more than 1 million in each.

Last official statement of inflation in Thailand year-to-year said 2 percent, so anything you can obtain above 2% after tax covers inflation (and perhaps a tiny bit of extra saving), whilst anything under 2% you loose some of your savings average buying power. 15% tax is withheld, but that can be reclaimed if your total income is lower than the personal allowance.

[khunPer]

when we are talking about investment , i don't think depositing your money in a bank is a good investment , especially with the low interest being paid currently at max 2.5% (after tax) , and when you deduct the inflation rate per year , which is also around 2.5 to 3% , you are in reality loosing on the real value of your money .

I have to agree with Attrayant post , that real-estate investment is the best choice for a long term investment . an investment in a well maintained condo in a central location with a reputable developer will never loose its value with time , can anyone in this forum give me 1 example of a well maintained condo in a central location in Bangkok loosing its value with time? in contrary a condo will generate income more than a bank and increase in value with time to beat inflation .

The OP has 4 million to invest , it is not a very big sum of money , however he can still manage to buy a small well maintained condo in a central location with a reputable developer .

The problem with Condo Ownership in Thailand is that most properties appreciate at 1% or less per year. The wishful thinking Listing price by the Seller or Seller's Agent is just that, wishful thinking and is rarely, if ever the selling price. I can bet most Condo's sell for 10%-20% less than the Listed price. Haven't you noticed all the Condo projects that have been built over the past few years? Who is buying them? Who is buying all the resales on the Market? Why are all the resales on the market to begin with? Most importantly, why haven't they sold? If it were that great, there would be lines of potential buyers standing in line waiting for the sales office to open. There are some projects that are several years old and still have units unsold and available. 4MB will get him a closet sized well maintained Condo in a central location in Bangkok. The Condo Market in Thailand is flooded everywhere. A terrible investment IMHO.

Agree, in my opinion a condo is not a “safe and simple” investment.

As the person(s) OP talks about is (are) Thai national(s), there is no limit to a condo investment only.

Depending of location, farmland will be a much better choice, if investing in property. No maintenance and no expenses, and (fairly) easy to control.

Historically farmland prices have (at least) doubled in the past decades (depending of area, some have tripled or more), and the outcome from “lease” (somebody else farm the land) is around 2 percent, depending of the buying price. The lease is often a share of the harvest, but can also be a fixed amount in money. Lease agreements typically runs for three years or shorter, then negotiated for prolongation.

If I look at my daughters “child-saving” investment in farmland, the price have at least tripled in 9 years, compared to selling price of similar nearby land, and her annual outcome from lease started at 4 percent and is now 5.6 percent.

[bangmai]

Mae Ta Dee is actually 2.30, but they don't with-hold taxes. KTB was offering TDs for 60 months at 4%, interest paid monthly, I believe.

But for just your visa money, 800K, Krungsri might be best bet, because you don't need to baby sit it, like the others, where it will revert to a very poor paying 3 or 6 month. It's almost like the companies that make all their profits off people, who "don't cancel." You go from 2.75 to .50.....On 775,000, I got 1565 for December, which was 32 days of interest, based on their method. No taxes with-held....

[khunPer]

Mae Ta Dee is actually 2.30, but they don't with-hold taxes. KTB was offering TDs for 60 months at 4%, interest paid monthly, I believe.

But for just your visa money, 800K, Krungsri might be best bet, because you don't need to baby sit it, like the others, where it will revert to a very poor paying 3 or 6 month. It's almost like the companies that make all their profits off people, who "don't cancel." You go from 2.75 to .50.....On 775,000, I got 1565 for December, which was 32 days of interest, based on their method. No taxes with-held....

Perhaps I shall recheck Krungsri that was my second choice of a Thai Bank – even I earlier had a bad experience with them; however some 10 years ago. I had an account in Bangkok Bank, but as they had no local branch and Krungsri was the only available, I opened an account there. After little more than a year I noticed that there were no interest added and asked why – the answer was: “We don’t pay interest to foreigners, only Thais…!«

“Farang price” – same same, but different…

[meatboy]

as we know the exact date our fixed deposits mature we already know where they are going,if the bank cant give us a rate that we can get elsewhere its bankers cheque and off we go.

so if you are doing this BEWARE of false info,staff dont like it when you take it elsewhere.most of the banks know where they stand with us,the wife checks what they have on offer,on a regular basis.

dont ever let the bank on maturity of your acc.put it where they want to.even if they have a decent fixed rate unless you go in they WILL put into what they call a holding acc.at poor odds.