Retiring with 16mn Baht

[DUS]

Good morning,

 

I hesitated a lot to start this thread as questions like the one to follow usually end in acrimonious discussions. Nonetheless, I will give it a go and see if the initial responses yield some valuable insight and opinions.

 

A friend of mine back in the UK inherited the equivalent of roughly TBH 16,000,000 (that sum already includes his other savings, which are minimal). As he loves Thailand he told me that he now plans to quit his job and move over here to Bangkok and just live "a normal life" without working. I told him that 16mn wouldn´t be enough to live comfortably, given that he´s just 50 years old. He´s used to travelling a lot for fun (within Europe) so I told him that regular weekend trips etc would no longer be possible for him despite the low cost fares of carriers such as AirAsia. I also said that he will be on a very, very tight budget especially when you include things like health insurance etc. He said, I was being too pessimistic and that given his family history he´d be surprised to live for more than 20 years to come anyway. Hmmm, well, it is obviously up for him to decide what he wants to do with his life but am I really too pessimistic when I say that 16mn isn´t enough to retire on (assuming that he will probably live for 25+ years)?

 

If the mods think that this question will only result in fruitless "bickering" then please feel free to close it straight away. But I´d be keen to hear your thoughts, of course....

 

DUS

[chiang mai]

Agreed, 16 mill. baht at age 50 is not a huge amount, especially in a low interest rate environment. And if he thinks that Thailand is cheap he needs to think again, unless he is prepared to live a fairly quiet lifestyle, frequent casual trips to Europe would not be part of the picture. BUT, if he were to put himself on a budget, stick to it and live a truly "normal" life, it's high risk but dooable.

[Henryford]

CM is right it can be done, living on say 50,000 a month, but it's hard to be disciplined at aged 50. Buying a decent place to live could cost 4 million (or much more in rent). If he has a pension coming in at 65+ he will be OK otherwise he will run out of cash at @ 70.

[geriatrickid]

Not enough for me. However, I prefer clean food, a safe place to sleep, proper hygiene, and decent quality consumer goods. There are people in Pattaya who live on less than that. They are quite happy. back in their own countries they would have been content to  get by in life. To each his own.

[Rob13]

It's a good start. Few more years of work and he  can have a decent enough retirement.

Edited August 15, 2016 by Rob13

[ezzra]

 

Get a local GF or a missus and most of that money gone not before long,

not sure what  your friend marital status, but this is one of the biggest mistake

novices to this county fall for....

[KNJ]

Health Insurance.

Car

Motorbike

money for visa

Rent/Buy accommodation

Fixtures and fittings

Crazy first 3 months

Almost as crazy next 3 months

6 ex GF after 12 months

Travel

Eating out

Boozing it up out

Phuket, Pats, Nakon nowhere  all big difference

Maintaining anything in UK

Paid up NI for SP in UK

With that amount it all needs to be considered, all factored in and 16 MTHB whilst not bad, he could do better, and should consult independent financial advice  AND pay for it

[Peterw42]

Invest the money, shares, a uk rental property etc, a return of 6-8% would be around 1m baht a year. Dependent on lifestyle, its feasible.

 

[Rancid]

These issues trouble quite a few people, where to park money where it is safe and offers a return. Many western countries have banking laws that could see pennies on the dollar if a collapse, real estate is in a bubble, and central banks are pump priming stock markets.

 

What he probably needs to do is turn that asset into a cash-flow, otherwise he will just run it down. As interest rate are so miserable, and only probably just trending lower, that reduces his options. These days stocks are a rigged game and only for those that really know what they are doing, bond rates also miserable, businesses risky.

 

Precious metals? Even the gold bugs usually only suggest 10% and it offers no return, only the hope of appreciation.

 

He could invest in some property with a decent rental return, although as the market is quite high he may see some future depreciation. Alternatively he could party hard for the time of his life till he's broke again. Everyone will have varying opinions.

[55Jay]

I would advise him to calm down, get some perspective and ideally, invest it wisely and keep working while he thinks this through a bit more.  

 

Does he have a house or other high value asset he would sell up or rent out?   With interest/dividends from the principle amount and potential rental income or, in the case of outright sale, that cash added to the principle amount to generate more passive income, that would provide a bit more breathing room and piece of mind.  Next boost down the road would be qualifying for a state pension to buffer reliance on the income producing assets.   I rather like the idea of keeping the house initially (if he's got one) and renting it out.  He could get here and later decide Thailand's not a good fit for him long term. 

 

Probably not what he wants to hear, but that's often the case when advice runs counter to emotions. 

[MikeyIdea]

I have my investments with Broadgate Advisory Group, part of deVere Group. British of course, very professional, office in Exchange Tower Sukhumvit

 

Far from 16 million though

 

Investments should be left to professionals, it's bad times out there now but still, average returns over a 10 year period should be 5%. Better than 7-8% and ouppps, half gone

Edited August 15, 2016 by MikeyIdea

[Oxx]

8 minutes ago, Peterw42 said:

Invest the money, shares, a uk rental property etc, a return of 6-8% would be around 1m baht a year. Dependent on lifestyle, its feasible.

 

 

Investment in a UK rental property would be moronic for someone in his situation.  Just look at what recent changes in the FX rate have done to GBP income in THB - let alone the changes since the days of 75 baht to the pound.  With such very limited capital, he can't afford to gamble with exchange rate risk and would need to invest in Thailand.  Realistically speaking, 4% would be on the optimistic side.

[mcfish]

 

43 minutes ago, Peterw42 said:

Invest the money, shares, a uk rental property etc, a return of 6-8% would be around 1m baht a year. Dependent on lifestyle, its feasible.

 

 

43 minutes ago, Peterw42 said:

Invest the money, shares, a uk rental property etc, a return of 6-8% would be around 1m baht a year. Dependent on lifestyle, its feasible.

 

just a low end 1 bedroom 70 sqm condo will cost him 30k/month and then he has a lot of other expenses before he gets to his play money.

pretty crappy existance in bangkok ,pattaya or chang mai would be a better choice

[MikeyIdea]

11 minutes ago, Oxx said:

 

Investment in a UK rental property would be moronic for someone in his situation.  Just look at what recent changes in the FX rate have done to GBP income in THB - let alone the changes since the days of 75 baht to the pound.  With such very limited capital, he can't afford to gamble with exchange rate risk and would need to invest in Thailand.  Realistically speaking, 4% would be on the optimistic side.

 

I don't agree with investing IN Thailand, from Thailand rather than from England though. A big professional investment company laying up a broad balanced investment plan should be able to average 5% over a 10 year period, it's less than 5% now, the world is in shambles, I still believe in 5% average

[theguyfromanotherforum]

1 hour ago, ezzra said:

 

Get a local GF or a missus and most of that money gone not before long,

not sure what  your friend marital status, but this is one of the biggest mistake

novices to this county fall for....

 

Or get a local who works and get health insurance and housing for free.

[kannot]

11 minutes ago, mcfish said:

 

 

just a low end 1 bedroom 70 sqm condo will cost him 30k/month and then he has a lot of other expenses before he gets to his play money.

pretty crappy existance in bangkok ,pattaya or chang mai would be a better choice

your  way  off on the price of a low end 1 bed and 70m2 for a  1  bed is really a 2-3 bed these days, he could rent a decent room in On Nut of 45-50m2   1  bed for about 18- 20k in a low rise round suk 50-52 etc and if he goes out to Waterford condo even less, if  hes  not too fussed City Condo is  right next to the BTS and very cheap.

[amykat]

37 minutes ago, Oxx said:

 

Investment in a UK rental property would be moronic for someone in his situation.  Just look at what recent changes in the FX rate have done to GBP income in THB - let alone the changes since the days of 75 baht to the pound.  With such very limited capital, he can't afford to gamble with exchange rate risk and would need to invest in Thailand.  Realistically speaking, 4% would be on the optimistic side.

 

So, you suggest a man who seems to be a total newbie at investing in general, and as newbie to Thailand, cash out everything and transfer all his assets to Thailand at these same horrible, record low exchange rates ...so that he can avoid exchange rate risk over time, with whatever income he would generate?  Besides all the other issues with having your assets here which are massive. 

 

CRAZY!!

Edited August 15, 2016 by amykat

[HampiK]

I think it will be very difficult to say anything. Because we don't know how his life-standards are.

- What appartement he want to life in? (a 5'000 baht Appartement, or a 50'000 baht one)

- He still wants to travel many times to Europe

- What kind of food he can and wants eat?

- What about health Insurance?

 

If you know about this questions there can maybe an answer. But the main problem for him is, that he not have a goverment scheme, which will start to help him, when he reach some ages. So it's actually not exactly clear how much money he could use per year/month. Or he says in 25 years he will do a suicide?

[JHolmesJr]

at 100,000 a month, he could have a blast for 13 years.

[mcfish]

25 minutes ago, kannot said:

your  way  off on the price of a low end 1 bed and 70m2 for a  1  bed is really a 2-3 bed these days, he could rent a decent room in On Nut of 45-50m2   1  bed for about 18- 20k in a low rise round suk 50-52 etc and if he goes out to Waterford condo even less, if  hes  not too fussed City Condo is  right next to the BTS and very cheap.

on nut? meh the whole point of moving to thailand is to bump your lifestle up not down. 30k is still cheapest to get in upmarket areas or at least heavy expat areas lower suk

[amykat]

I think you should tell your friend  what is good advise for all people who get a sudden windfall and who aren't financially very organized:  Do nothing for at least a year.  Make no changes in your lifestyle.  Do not meet with financial advisors who will try to talk you into investments you do not understand and that will pay them big commissions and most likely not suit you. Take the time to educate yourself ...this is very important!!  If he wants to retire in Thailand or elsewhere, he should read about early retirement planning and how to go about that, and what things need to be considered.  You can't learn that in a few hours or in a few conversations in a bar.  There are web forums on this topic which give a lot info and point out books and other areas one needs to learn about, like investing.   It really isn't as simple as, is X amount enough for this?

 

After he does that, then it would be appropriate to decide if he wants to try out Thailand and then learn about Thailand.

 

That would be the best way to go about it anyway ...

[CharlieH]

Too many variables to be even remotely close. Lifestyle, location, "habits" etc...........how long is a piece of string.

 

If the little head takes over, meets the wrong girl, that lot will be gone within a year !!

[Agent Sumo]

2 hours ago, MikeyIdea said:

I have my investments with Broadgate Advisory Group, part of deVere Group. British of course, very professional, office in Exchange Tower Sukhumvit

 

Far from 16 million though

 

Investments should be left to professionals, it's bad times out there now but still, average returns over a 10 year period should be 5%. Better than 7-8% and ouppps, half gone

 

deVere???!!!

 

Is this the same deVere Group recently sanctioned by the Thai SEC?

[Oxx]

6 minutes ago, Agent Sumo said:

 

deVere???!!!

 

Is this the same deVere Group recently sanctioned by the Thai SEC?

 

Or, indeed, the same group that has another topic running:  http://www.thaivisa.com/forum/topic/937534-devere-broadgate-complaints-qrops

[Oxx]

20 minutes ago, Agent Sumo said:

 

deVere???!!!

 

Is this the same deVere Group recently sanctioned by the Thai SEC?

 

I don't believe that is true.  As far as I can tell (and despite rumours that it has) deVere hasn't even been the subject of an SEC Investor Alert.  (You can search at http://market.sec.or.th/public/idisc/en/InvestorAlert - I found nothing relevant there.)

[geronimo]

Well, it is more than most have had when setting up an new life here, and if he's careful, I see no reason why he shouldn't have a great time. When it runs out, it runs out.

[DUS]

Thank you all for your input! I am just glad to see that I am not alone with considering his move "a risk".

 

He´s so fed up with working and living in London that, I believe, he is a bit too overoptimistic when it comes to him being honest with himself and the lifestyle he envisages (i.e. the sacrifices he´s willing to make or would have to make given his budget). At the end of the day it´s his choice. But, knowing him, I doubt he´ll live a happy life over here for 20 - 25 years on 50k month each. I know he´d love to live around where I live at the moment (lower Suk), so that would leave him with roughly 20.000 a month for everything he needs or wants in his life. Not a huge budget indeed. But if the most important thing in his life at this moment in time is to leave London and to retire then he´ll have to make this jump into the "financial unknown". I advised against this but we´ll see what he´ll do in the end. 

 

Anyway, thank you all for your feedback so far! 

[Agent Sumo]

9 minutes ago, Oxx said:

 

I don't believe that is true.  As far as I can tell (and despite rumours that it has) deVere hasn't even been the subject of an SEC Investor Alert.  (You can search at http://market.sec.or.th/public/idisc/en/InvestorAlert - I found nothing relevant there.)

 

OK fair enough.

 

I just remember reading something on Andrew Drummond's site about them not even being registered with the Thai SEC as recently as last year.

 

Countless people have complained about their sharp practice and disregard for investor risk tolerance. 

 

I suspect that when MikeyIdea decides to cash in, it might be a case of "QR-oooops"

[Briggsy]

I don't see any reason to bring into Thailand any more than is necessary. Why?

 

1. Exchange rates (45 Baht to the pound at present) are far more likely to see some strengthening in the £ than further weakening.

2. Exchange rate risk can be managed absolutely fine from Thailand without bringing money here. Simply invest in ETF's, unit trusts, etc which do not track the value of the £.

3. Weak regulation and law enforcement mean that investments turning out to be worthless are far more likely to occur to a noob in Thailand than in the UK.

 

Bearing in mind, capital growth and reinvestment of income could very easily bring in 3% per annum, probably more. That is around £25,000 per year. Assume total annual expenses of £15,000 per annum (but who knows) and the "friend" has initially £10,000 excess per annum to cover inflation. I wrote a simple Excel spreadsheet for this which plots a graph of total liquid worth/annual expenditure vs age. It will tell you how many years' worth of expenditure you have as liquid funds at any given age. £800,000 at this guy's age would easily last the majority. Depends principally on his tastes.

[dick dasterdly]

So many negative posts!

 

If he can make his money last until he can draw his own private pensions, he'll be fine.