Small Investment Options

[paulklee]

My Thai SIL has had a bit of a windfall, just over a million baht. Already, family are "advising" her of the best way to distribute these funds. Buying a piece of land near the family village is the most popular idea (not necessarily a bad idea either). I've said she should invest it for the benefit of herself and her children, but she said "invest in what?" She doesn't like the idea of risk so she is looking for a safe haven (eg is land the great investment it used to be?). I've no idea what's out there any more so if anyone has any relevant suggestions, please share. Are there any political or other dangers on the horizon which could badly affect such small investments here in Thailand?

I don't know if there is any Thai law restricting her investments to Thailand or can she invest anywhere? It's not the biggest sum but it's a lot to her.

Thanks for any suggestions....

[Yoram]

Right now, not much can be done with a one million baht that can bring a good return on it,

one good future investment would be to invest in gold, be it buy the metal in bars form and

keep it somewhere safe or buy gold futures in the thai market with reputable companies

that specialize in them, given time, gold will rise again.

[Hedghog]

Gold is presently close to a 3year high.

In the long term probably is a good investment,but comes with risk.

The benefit is she can draw down on it at any given time.

Maybe just bank it for the time being to mull things over.

[gk10002000]

It is my impression that the typical Thai won't really understand the concept of investing in equity, say in a dividend paying stock, or a bond or a bond fund. A lump sum of money is going to go out the door very quickly. They will want to buy something. I don't know anything about Thai income tax laws or about a person getting a brokerage account, or Tax deferred accounts existing in Thailand, or if municipal bonds or municipal bond funds exist. I would tell her to buy PRHYX, some other bond ETF or very low fee bond fund suitable for her taxation situation. I don't know if she can easily and cheaply invest in US or other Nation owned securities, or what Thai equities are available.

[jpinx]

Assuming that the family can use it or she can rent it out - buy the land. Gold is very risky, and interest from a bank term deposit on a million is not worth the candle. Rates around 2.5% would pay her about 2,000 per month possibly less tax.

[baneko]

I bought 2 rai a couple of yrs back in Chonburi. Good location...1 million baht. Been offered 1.4 but not selling. 400000 in 2 yrs is not a bad return.

[thaihome]

Put the money into a fixed term account for six months or so to prevent leakage. Go look for land that is as close to town/city that is in price rang and will likely be developed in a few years. Other option is some farm land that can be rented out, though return on that is very low. If there is any industry in the area, low income worker housing can be a very good investment.

TH

[uthaithanirules]

Land? Pffft

SET50

Agricultural dependant country like Thailand, growth in the top 50 near the end / after a drought a safe bet in the years to come

[wprime]

If she's risk adverse, Thai banks are offering pretty good interest rates at the moment, KTB was paying me 4.1% on a fixed deposit. From an international perspective the benefit is lost to the risky short term forex risk but from a Thai perspective this shouldn't be an issue.

[Craig krup]

The thing that generally pays the highest returns is investing in yourself, but that only applies if 1) there's something you're already motivated to do, 2) there's no other way of funding it and 3) you've been prevented from doing it by the lack of money. So if you're desperate to become a dentist, have the grades, can't finance it any other way and walk into the dough - become a dentist.

For an awful lot of people money burns a hole in their pocket. I got a nice fat dividend from the Securities Trust of Scotland investment trust on Friday. But the kind of mentality that values 1.1% of your dough back every three months is pretty rare. Would you SIL really take £220/11,000B every three months, assuming she could get something similar?

[PT4]

It is my impression that the typical Thai won't really understand the concept of investing in equity, say in a dividend paying stock, or a bond or a bond fund.

Well said, GK. And that is exactly my impression, too.

[PT4]

Paulklee -

​

​My suggestion is to keep out of it; not say anything; not get involved in the topic at all.

Why not?

​

​1. You are (I assume) farang. Thais know everything about Thais; we farang know nothing. By trying to insert yourself into the discussion, you will confirm that to your Thai family.

​

​2. Only those higher up in the Thai social hierarchy are allowed to give advice on important matters like this. As a farang you are completely outside the Thai hierarchy. Butting in with your opinions will be considered rude.

​

​3. When it comes to handling money, there are many subtleties of which you can not be aware: such as past favors needing to be repaid, or financial needs of other family members, which are unknown to you.

​

​4. If, by chance, the SIL follows your advice, if the investment turns out well, it will be because she is "clever". If the investment turns out badly, it will be your fault. And, likely, you will be expected to make up any losses.

[WorkingTourist]

I agree about staying out of it as you admit to knowing little about investing, and as they say, a little knowledge can be a dangerous thing.

For example you ask if she can invest outside Thailand, but for this lady, the currency risk is just too high to consider that, and you ask for advice on a forum where the first two replies (somewhat predictable) suggest spending it on shiny metal.

thaihome gave the best advice: Put it into a fixed term deposit account and take your time to understand land prices.

A fixed term account is the only sane thing to do with my understanding of this lady’s risk profile. Anything with a higher yield, and she runs the risk of losing money.

If you want to help, look into what the different banks are willing to pay and/or examine land prices.

For the land “investment” though, what is the motivation for this? Is it to live there later in life? Or is it to sell with a profit? I don’t know her “family village”, but land prices go up (sans inflation) if the location increase in popularity, and historic trend is for people to leave villages and move to the city or suburbs, so land near small villages tend to be a lousy investment.

[fletchsmile]

Investing in what you know and understand is very important. Unless OP or someone else is going to manage the money for them I very much doubt an upcountry village family would know much about investing in several of the asset classes someone would normally recommend to a foreigner. Not being patronising. Just realistic.

So I'd go for letting them invest in what they know and understand. That will probably be land and maybe a bit of gold. They could do worse, so let them get on with it. Unless they're doing something foolish, just let them get on with it.

Few Thais actually invest in equities, mutual funds, etc. (Under 10% of the population). Fewer still understand them.

When my wife thinks of saving and investing she looks at cash accounts and land. So I let her get on with that. On the other hand I balance it out with equities, mutual funds, bonds, commodities etc etc. Together we complement each other.

[Happy Grumpy]

Keep it simple.

2 nearly new taxis and rent them out.

Just not to family members.

10-20k p/m off each, if lucky and puts in effort.

Reinvest in updating them every few years.

Edited March 20, 2016 by Happy Grumpy

[up-country_sinclair]

Good god, man. Stay out of it altogether.

There is no benefit and only downside to your involvement.

[Pinot]

I never recommend anyone buy gold as an investment, it's purely speculative.

Rental property stands empty in most places I know of. Then there is the headache of managing it.

The savings account of 4% as mentioned above would be one way to go. I don't see that rate around me. Shop the banks and see what you can find.

Bangkok Bank has various investment funds you can buy. I would spread out the investment in a few of the most popular funds. Easy way to invest and I think the Thai economy looks like it's coming back. Set 50, Set 100 funds.

I think the best bet would be half in savings and the other half in a few funds. Kashikorn also has funds.

[HLover]

OP, will she listen or take your investment advice?

[uthaithanirules]

Paulklee -

​

​My suggestion is to keep out of it; not say anything; not get involved in the topic at all.

Why not?

​

​1. You are (I assume) farang. Thais know everything about Thais; we farang know nothing. By trying to insert yourself into the discussion, you will confirm that to your Thai family.

​

​2. Only those higher up in the Thai social hierarchy are allowed to give advice on important matters like this. As a farang you are completely outside the Thai hierarchy. Butting in with your opinions will be considered rude.

​

​3. When it comes to handling money, there are many subtleties of which you can not be aware: such as past favors needing to be repaid, or financial needs of other family members, which are unknown to you.

​

​4. If, by chance, the SIL follows your advice, if the investment turns out well, it will be because she is "clever". If the investment turns out badly, it will be your fault. And, likely, you will be expected to make up any losses.

LoL, exactly

[paulklee]

Thanks everyone for taking the trouble to reply. [NB In my OP, I said I didn't know what was out there any more. I most certainly didn't say I didn't know anything about investing. It's the specific financial products that might be available these days that I don't know about. Like many others on this forum I am sure, I had great fun and made quite a bit of money back in the day by investing in Thai Promissary Notes and (luckily?) I was out of them before their collapse.]

I'm really grateful for the product suggestions from bank deposits through securities to investments with SET50 and PRHYX etc. Making the capital work to provide even a modest but regular return is attractive to SIL in the current economic climate with such a small investment sum. On the other hand, buying some land with the right profile might lead to major capital appreciation over quite a short period. Investing in gold can make sense too. I've no idea how SIL will decide, but it will be her decision.

Hedgehog's idea of sticking it in the bank and mulling it over has a practical ring to it! That will no doubt be the first stage and following other sound advice above, we'll call round the banks to get an idea of their best rates for short/fixed term deposits. After that initial thinking period, she will need a longer term strategy but it's my guess she will take an approach that will not involve much management.

Thanks again everyone...

[Gutenberg]

1 million baht:

Lend it to people for 15% per year, register it against the Chanote title for a piece of land which is actually 2mb worth. Running time 1-3 years. After end terms full pay + 15% per year or Chanote is transferred.

[peeba7]

What is an SL?

If she's risk adverse, Thai banks are offering pretty good interest rates at the moment, KTB was paying me 4.1% on a fixed deposit. From an international perspective the benefit is lost to the risky short term forex risk but from a Thai perspective this shouldn't be an issue.

4.1% is great! Wprime, details please? Minimum amount required? Length of term? Any and all details. Also will this be an acceptable investment vehicle for retirement visa money in bank?

[up-country_sinclair]

1 million baht:

Lend it to people for 15% per year, register it against the Chanote title for a piece of land which is actually 2mb worth. Running time 1-3 years. After end terms full pay + 15% per year or Chanote is transferred.

Is that legal for the average Thai citizen to do? Don't you have to be registered in some way?