Poor vs cash strapped

[theguyfromanotherforum]

I was browsing for some nonsense and found an article written by a "Westerner" which basically argues that most Thais are not poor just cash strapped. What he means in particular and what I also suspected for a long time is that some of them might be indeed poor, but will have a land worth millions of baht which they of course refuse to sell.... and that's just poor people.

Yes, I realize there must some very poor people too who have nothing and resort begging on the street, however, I would like to hear from some Thailand veterans as I am still just a newbie here.

[Kf6vci]

Well, many are drowning in debt. The other day, I bought a repossessed motorcycle. Someone failed to manage the payments of perhaps less than 2,000 Baht in the first few months.

Got a new car? Now work to pay for the car!

Folks on low incomes having Apple products.

But then, middle class Americaans are often in a precarious situation as well: http://davidstockmanscontracorner.com/desperate-straits-the-secret-financial-crisis-of-middle-class-americans/

[Bangkokazy]

Average Thais have 68,000 thousand ฿ debt

thai farmers losing money left and right with one of their biggest issues, them must borrow money from loan sharks at a rate of 20 to 30 percent per month

http://www.thaivisa.com/forum/topic/841750-cash-strapped-thai-farmers-forced-to-watch-crops-wither-away/

Edited May 17, 2016 by Bangkokazy

[White Christmas13]

Yes I see where you coming from my wife's family has about 5 blocks of land the larges one

is 27 rai then some 11 rai seven rai a few smaller one's some units for rent (which I build)

a home stay which I build also but they got no money, nothing at all getting done with the

land it just sit's there not creating an income if I would be able to own all that land

which I can't as everybody knows I would sell some of the land and create a business

on one of the lands no matter what it is or how much money it would make

well it would be making more then it does now (nothing)

Edited May 17, 2016 by White Christmas13

[laolover88]

It is much the same as the English phrase " Cash Poor, Asset Rich". There are several associated phenomena. Most of the I-phones and Samsungs are bought on the never, never; as, of course are cars and motorbikes. Deposits are low and repayment periods ruinously long.

There are also thousands of Rai of unused and unexploited land. There seem to be two reasons for this

1. Project management to get a house built, let alone even a small soi or two is not a skill much found in the countryside!

2. Banks really only want to lend against land that already has a house on it. So in order to make their repayments they have borrow more money from local lenders shall we call them!

Worth another look at the knoema.com site which lists household income by Jangwat.

Edited May 17, 2016 by laolover88

[uptheos]

Massive rise in 2015 level household debt repayments

The results of the household debt survey are particularly shocking in that they show that 87.8% of those who had borrowed money were experiencing difficulties in servicing their debts and that the average household in Thailand must meet repayments of 14,033 baht per month representing a massive increase on the figure 2014 which was only 10,752 baht per month.

http://www.thaiexaminer.com/thai-news-foreigners/2015/09/16/thai-household-debt-weight-thailand-economy/

[Beechboy]

"........... that most Thais are not poor just cash strapped."

Perhaps the author of that statement is overdue a visit to one of the many slum areas that exist in varying degrees in Bangkok.

I have on two separate occasions to two separate areas. They both 'nearly' rivalled the worst of those to be seen in India (Bombay in my case.)

I say 'nearly' because they did at least have basic sanitation, although there was little evidence of regular refuse collection and in one case the main drag was a mud-road and it was riddled with large areas of standing water full of refuse.

Both were excessively over-crowded, with neighbours living on top of each other.

There is genuine poverty in all large Thai towns, I would assume.

Edited May 17, 2016 by Beechboy

[optad]

On the topic of browsing for nonsense, I sense that...

Poor v assets in lieu of sale neglects the cost of living today in Thailand. If those with an asset sells, but if they still can not find industry/income sustainable will soon enough become that poor person they feared, if they were not already.

Many Thais have a few rais up country but that is hardly a positive asset to cost of living ratio, if converted. I am obviously speaking generally and will suffer the exceptions, in a nonsense sense.

[chicowoodduck]

Average Thais have 68,000 thousand ฿ debt

thai farmers losing money left and right with one of their biggest issues, them must borrow money from loan sharks at a rate of 20 to 30 percent per month

http://www.thaivisa.com/forum/topic/841750-cash-strapped-thai-farmers-forced-to-watch-crops-wither-away/

I can sense I am in the wrong line of business? ?

[1FinickyOne]

I would guess that 15-20 years ago there were near no mortgages within 20 km of my house. Thai have discovered borrowing and it does not go well... Yes, we used to call it land rich and cash poor...

As to begging... I never see it upcountry. Only in places like Bkk and Cm in the tourist zones. Upcountry, I see no desperate poverty in that anyone can get a meal at the local temples and families stay together so there is always room to roll out another mat on the floor... that does not mean they have money, just that the basics are provided for... unlike the homelessness in the West.

[optad]

More to the point, income versus easy exposure to loans [albithey car or house] is beginning to hurt many Thais as industry, capacity to earn and remunerated skills are not keeping pace with escalating costs. Everyone has known this effect was coming to pass. It will get worse and the divide widen.

[akentryan]

GF's family has rice growing land but doesn't generate enough income. A rainbow in every storm as I have a beautiful GF half my age primarily because I send money up country every month to support her two kids. Plus we get a 25 kg bag or two of Jasmine rice a year - the best I have ever eaten. Spare me the comments from you handsome guys that never have and never will give your GF or wife money. I was married to a Thai lawyer for 23 years and yes I helped her younger sisters get through college and find jobs. Absolutely no regrets except that she died way too young.

[bubba1]

True for Issan

[theguyfromanotherforum]

GF's family has rice growing land but doesn't generate enough income. A rainbow in every storm as I have a beautiful GF half my age primarily because I send money up country every month to support her two kids. Plus we get a 25 kg bag or two of Jasmine rice a year - the best I have ever eaten. Spare me the comments from you handsome guys that never have and never will give your GF or wife money. I was married to a Thai lawyer for 23 years and yes I helped her younger sisters get through college and find jobs. Absolutely no regrets except that she died way too young.

You have some deep insecurities man,

[little mary sunshine]

Not only Thailand. I lived in The South in

The USA, Southerners, the older generation,

Would rather die than sell some of their

Land. "Dirt Poor or Land Poor." They would

Die and have taxes to pay, and live such a

Peasant life leave the land to the children

Who would immediately sell it to a developer

Then squander the money on cars, trucks, bars,

And second and third wives...and become POOR!!

Edited May 18, 2016 by little mary sunshine

[gandalf12]

You also have to remember that Thai's like to spend today and think about tomorrow when it comes. If they have land they cant spend it as such but if they have cash they will go through that like there is no tomorrow

[dotpoom]

Is it not the same everywhere?.......The phrase from home that rings out is....."I'm just a poor farmer". To me that's like saying ..."I'm just a poor landlord with lots of properties, but the market is slow just now".

A homeless person having to get meals from convents and freebie handouts...that for me is a "poor person".

Edited May 18, 2016 by dotpoom

[cgphuket]

About 95% of the country are certainly poor, with no assets they could cash out. This is a country where 5% of the population holds about 70% of the wealth.

[hocuspocus]

Wife's family bought a second hand pickup about four years ago 5200 baht per month, still one year to go, pickup looking a bit battered now, not worth a lot, they are still living in a step up from a shack. We are building a house and up to now we have spent about the same as they have spent on the pickup (ok my money please no comments about that) and we have a nice Western looking house and have something to show for our money (ok my money). They have a battered pickup and a shack and we were locking the doors on our new house and I told my wife about the comparison between our house and her families shack and she said I did not have to tell this. With poor education and very bad mathematical skills it is no wonder that a lot of Thai people are in such a bad financial state with loan sharks knocking on the door, but that is the way the people at the top want the majority of the people to be like.

[baansgr]

In the UK people work 40 hours a week every week, some with 2 jobs, couples both, just so they can afford their little 2 up 2 down terrace, constant worry about bills, eat out once a month, holiday once a year, basically on a treadmill for 45 years. Here people come and go, work when they want, eat out most days and live on what they have......who really is poor?

[thaiduncankk]

I would guess that 15-20 years ago there were near no mortgages within 20 km of my house. Thai have discovered borrowing and it does not go well... Yes, we used to call it land rich and cash poor...

As to begging... I never see it upcountry. Only in places like Bkk and Cm in the tourist zones. Upcountry, I see no desperate poverty in that anyone can get a meal at the local temples and families stay together so there is always room to roll out another mat on the floor... that does not mean they have money, just that the basics are provided for... unlike the homelessness in the West.

Quite a few homeless in Khon Kaen. Because they do not sleep around the bar area, not many people see it.

[Kiwiken]

The curse of most Societies is Hire Purchase and so called refinancing loans. All give you cash and goods today hardship and stress tomorrow. Thailand not alone in this . All Our Societies have levels of this. Someone Once said to me years ago "poor people are poor because they want to be", "Everyone can be rich if they want". My answer was "If everyone can be rich then how would you know and what would that really be worth" Food for thought. Nations should be ranked not on the wealth at the top but how they care for the bottom. It is said the good you do comes back to you. That is Karma . Enjoy reflect

[Thaidream]

Many Thais who state they own land actually have what is called a permit to stay on land that is actually government land. They do not have a Chanote-or land title. They have documents that state they can stay on the land and utilize but legally cannot sell it. Some do 'sell' or get a loan on it from a loan shark but in reality they cannot get the actual fair price until they get the government to issue a Chanote. This is done through the Land office which of course takes its 'cut'. A horrid system that keeps people in debt forever.

[The Deerhunter]

Well, many are drowning in debt. The other day, I bought a repossessed motorcycle. Someone failed to manage the payments of perhaps less than 2,000 Baht in the first few months.

Got a new car? Now work to pay for the car!

Folks on low incomes having Apple products.

But then, middle class Americaans are often in a precarious situation as well: http://davidstockmanscontracorner.com/desperate-straits-the-secret-financial-crisis-of-middle-class-americans/

Yes, I agree. Second hand repossessed m/c's all have roughly the same mileage, 16,000 to 22,000 km. It relates to the time it took to get the bike back after the original no-deposit purchase and when payments started being missed (and when they could find the bike to get it back.)

Eventually being cash strapped leads to borrowing against the assets and then although the assets may still be in the nominal owner's name, he/she may have little equity left. and that is truly drowning in debt. And at say 10% a month (compounding) as the local money lenders charge, the equity vanishes real fast. Losing the farm means being home-less, property-less and income-less, all at once.

When my wife first came to my country bank interest rates were around 8% and she discussed borrowing a bit of money off a "friend" at 10%. I hit the roof. I explained and she quickly understood the difference between 10% a month and 8% a year. Now she has only contempt for the money lenders who were previously thought of as friends.

Credit risk is so bad here that it is very difficult to get a credit card. I know through personal contacts of many people who just get a CC and consider it free money and spend with no hope or intention of ever repaying. In normal loans, I have been told that banks charge 12% or more the first year on loans and if you survive that, they drop it in the second year and subsequent loans. (Can anyone confirm this???)

A combination of low wages, poor financial understanding/education and a live-for-today attitude brought on by generations of low wages, poor financial understanding and fatalistic-superstitious teachings from the cradle. (I must have been bad in the last life to have this one so bad so I will suck it up as my just, pre-ordained and inescapable punishment in this life and work towards a better life next time. Therefore I will give whatever spare cash I have to the temple now to ensure a better life next time.)

Edited May 18, 2016 by The Deerhunter

[Eric Loh]

An aspect of poor in Thailand that I find intriguing is that there are not many poor homeless or even beggars. Even in Japan and USA, there are homeless communities but I don't see that in Thailand. Yes there are few hard core individuals homeless living in Bangkok and the regular and professional beggars but not really widespread. My thinking is that no matter how poor, the close family ties will provide those in hard times with home security and food. The small items like food are still within reach of the marginalized and its the big ticket items like paying the truck, phone and furniture that pushed them to debts and poverty.

[khunPer]

OP, you are in way right mentioning the land-value and short-of-cash – however, not all Thais own land.

You need a home. If you sell the home you own, you need to rent – in long term it's cheaper to own.

Farmers need land to grow. A number of farmers rent their land; or rent extra land, to make it a business to live/survive from. If they sell their land, they can be considered rich – in most Isaan areas I believe farmland average around 100k baht a rai at the moment, so a typical 20 rai farm is some 2 million baht worth. But if you sell your land, you often need to rent a home or find a job, often meaning move to a city – however elder folks selling farmland, but keeping village house plot, may be able to have a pleasant senior-life from a couple of million baht; but most Thais don't like to sell family-land. Some farmland can officially not be sold, but is still traded locally in village or between relatives. Many Thais borrow money on their land, sometimes they are forced to borrow at the grey market – low title deeds cannot be used as security for bank loans – paying an extremely high interest; sometimes end up loosing all their land.

In general Thailand is a wealthy country, but the wealth is distributed different than in the in general socialist West, with redistribution through taxation and social welfare system...

[mihalis]

isn't the whole world cash strapped, apart from the super rich ~~

[oldlakey]

GF's family has rice growing land but doesn't generate enough income. A rainbow in every storm as I have a beautiful GF half my age primarily because I send money up country every month to support her two kids. Plus we get a 25 kg bag or two of Jasmine rice a year - the best I have ever eaten. Spare me the comments from you handsome guys that never have and never will give your GF or wife money. I was married to a Thai lawyer for 23 years and yes I helped her younger sisters get through college and find jobs. Absolutely no regrets except that she died way too young.

There is a lot on here who would like to be in your shoes all the best going forward old son

[Bangkokazy]

That means cash strapped I have but not now, but soon.

[bazza40]

There are quite a few Thais who sleep on pallets under trees as they don't even have a roof over their head. I wonder what the superstition that a house where someone has died violently must be abandoned due to ghosts does to family wealth as well.

Some Thais get so deep in debt to the local mafia they move out of their village to make a fresh start.

More affluent villagers can sometimes be identified by the amount of gold they are wearing, which is pawned and redeemed as fortunes fluctuate