Retiring with 16mn Baht

[pauleddy]

Many variables but:

 

Buy any condo in LOS and it's hard to sell. Thais only want new because they get a free microwave and shower curtain from BigC and pay over the odds.

 

Don't invest in any Thai bank bonds or long-term. Have one Thai bank current account for weekly stuff. Nobody knows the future here. Thai banks, even in settled times, hate it when you try to withdraw a matured lump sum or anything over 30,000b. There are all sorts of tricks and charges to keep you in.

 

Eddy

 

(Actually, the rental prices for condos are coming down cos no farang about. Keep seeing places in Asoke and Suk for 17,000, with more luxury 25-30,000. Rachada 2-bed 14,000. Anybody else notice this?)

[Briggsy]

2 minutes ago, pauleddy said:

Don't invest in any Thai bank bonds or long-term. Have one Thai bank current account for weekly stuff. Nobody knows the future here. Thai banks, even in settled times, hate it when you try to withdraw a matured lump sum or anything over 30,000b. There are all sorts of tricks and charges to keep you in.

 

 

This bit made me recall an incident.

 

I had a 12-month term deposit with a bank here. It was around 300,000 Baht or something like that. It came to an end. I went in and asked to renew it. The conversation proceeded as follows:-

 

Bank : Do you have a work permit?

Me : No, I no longer work in Thailand

Bank : Oh cannot renew. Wait. Do you own a condo?

Me : No, I rent a condo long-term.

Bank : Oh cannot renew. Wait. Are you married to a Thai?

Me : No I am single.

Bank : Oh cannot renew.

Me : Ok, since the account matured yesterday, I would like to withdraw the funds.

Bank : Oh! Wait. Errmm, do you have a Thai girlfriend?

Me : What has that got to do with anything?

Bank : Okay, okay, can renew.

 

Just bizarre.

[SteveSamui6262]

I went through 100,000 b per month here for years.  That began 15 years ago.  Your friend will eventually crash hard and burn.  It is impossible to avoid the goods & services here.  You start out telling yourself "not everyday".  Before he knows it, he will become accustomed to a very comfortabe lifestyle, and it is expensive.  Add in the companionship, who take an inch at a time, sometimes a yard.  Expensive rental housing (western style in Bangkok will average 30,000 baht or more monthly).  Health care.  

I'm just not going to go any further.  

 

By the time he realizes he blew the wad, he will have nowhere to go and be too old to find employment.

 

Falongs are always going to be outsiders here.  The deck is stacked against us.

Thailand has very weak laws, so forget about any real law & order.

If a child was offered the opportunity to move to Disneyland, do you think the kid would survive  in the long run?  $467,000 USD is pretty much crap in California.  It's not enough cash now to purchase a good middle class home in a good location.  Just 15 years ago it was more than enough!  

 

Please advise your friend to avoid temptation and to rationally look far ahead.  I advise he doesn't bet against himself (heathwise).

[pauleddy]

2 minutes ago, Briggsy said:

This bit made me recall an incident.

 

I had a 12-month term deposit with a bank here. It was around 300,000 Baht or something like that. It came to an end. I went in and asked to renew it. The conversation proceeded as follows:-

 

Bank : Do you have a work permit?

Me : No, I no longer work in Thailand

Bank : Oh cannot renew. Wait. Do you own a condo?

Me : No, I rent a condo long-term.

Bank : Oh cannot renew. Wait. Are you married to a Thai?

Me : No I am single.

Bank : Oh cannot renew.

Me : Ok, since the account matured yesterday, I would like to withdraw the funds.

Bank : Oh! Wait. Errmm, do you have a Thai girlfriend?

Me : What has that got to do with anything?

Bank : Okay, okay, can renew.

 

Just bizarre.

Computer it say mai.

[chicowoodduck]

Should last about a nano second with the first coin operated Thai girlfriend...????

[pearcerf]

Quote

Slow down a little and think this through. I will suggest you wait until you are 55, and continue to keep your job in the UK and step up your savings. Then, move to Thailand. Until then, travel to Thailand once a year to get your fix. Maybe by then you will generate a pension if possible. 

 

[amykat]

21 minutes ago, dotpoom said:

I came here 15 years ago with 5 MB. Bought 3 condos, lived in one and rented out the other two. I got married, sold the condo I was living in and bought a house in a nice middle class area about 30 mins. outside Pattaya.. I have a life beyond my wildest dreams today. Myself and the Mrs. want for nothing (we neither drink or smoke). We go on a driving holiday about every 9 or 10 weeks around Thailand for about 2 weeks at a time.

    I still have the house and two different condos from the originals I bought, which would add up to about 5 and a 1/2 MB if I sold all.

   So, with the greatest respect.....anybody who tells me that 16 MB is not enough to live on at 50 years of age is talking a load of horse manure.

    I am 66 years of age now...... If I were to die tomorrow I will have had a far fuller life than I could have ever imagined.....Had I waited till I had at least 16 MB before coming here I would have sold myself so short that I dread to even think about it.

 

I'm happy for you that things have gone so well.  But are you trying to say that you have no other income?  Because if so, your situation seems like it could be rather risky and without much cushion.  I understand that things look good if you die now, but what if you live for 30 more years?  How will you pay for big medical expenses? What if your wife leaves and takes half the properties?  What if you want to go back to your home country, etc?  You are still young.

[Stevemercer]

To live comfortably he will need 1 million baht per year. This assumes a modest spend on beer, ladies and entertainment (max 5,000 baht per week). Presumably when he turns 65 the UK pension will kick in.

 

It is possible if your friend is disciplined and can fill in most of his daylight hours on pursuits costing next to nothing. Personally, I could not do it. I would want to spend a fixed capital (say 5 million baht) to secure a home and other capital goods debt free. I would be impossible in today's financial climate to safely invest the remaining 10 million Baht at 10% to secure an annual income of 1 million baht per year. Even 5% (500,000 baht per year) is not without risk (but is possible if invested smartly in the UK).

 

Your friend should look to see the best tax friendly and likely return he can get through a UK investment for 10 million baht, and then work out if he can live on the annual return. He should expect to spend 5 million baht to set himself up with a house and car etc. That leaves 1 million baht to support himself in the first year, look around for somewhere to live etc. If he has gone through the first 1 million in less than 6 months then he does not have the discipline to cut it in the longer term and should go back to the UK and make some money for 5 years.

 

Do not invest the money in Thailand and expect to get a return.

 

PS I'm talking about living in rural Thailand, not in Bangkok or other tourist places.

Edited August 15, 2016 by Stevemercer
More info

[khunPer]

16 million baht over 25 years with a nominel interest in the area of 3 percent from bonds, that will average 700,000 to 800,000 baht a year; or little more than 60,000 baht a month, which is actually about the figure stated for retirement by the Thai authorities.

However, it's all a question of lifestyle – and future lifestyle – for some folks 60,000 baht a month is far more than enough; for others it work out just as well as a tailor will do in Hell.

Any back-up from government retirement pension; and what happen, if your friend fall in love with a Thai..?

 

I wish your friend good luck...

[SteveSamui6262]

I went through 100,000 b per month here for years.  That began 15 years ago.  Your friend will eventually crash hard and burn.  It is impossible to resist the goods & services here.  You start out telling yourself "not everyday".  Before he knows it, he will become accustomed to a very comfortabe lifestyle, and it is expensive.  Add in the companionship, who take an inch at a time, sometimes a yard.  Expensive rental housing (western style in Bangkok will average 30,000 baht or more monthly).  Health care.  

I'm just not going to go any further.  

 

By the time he realizes he blew the wad, he will have nowhere to go and be too old to find employment.

 

Falongs are always going to be outsiders here.  The deck is stacked against us.

Thailand has very weak laws, so forget about any real law & order.

If a child was offered the opportunity to move to Disneyland, do you think the kid would survive  in the long run?  $467,000 USD is pretty much crap in California.  It's not enough cash now to purchase a good middle class home in a good location.  Just 15 years ago it was more than enough!  

 

Please advise your friend to avoid temptation and to rationally look far ahead.  I advise he doesn't bet against himself (heathwise).

[ThaiPauly]

37 minutes ago, yellowboat said:

He sounds like the perfect sucker this country attracts and the word "work" is a four letter word in Thailand.  He is far to young to stop working.  At the very least, he can volunteer and have his expenses covered. 

I Retired in Thailand at 49, I am still here, but I came with a lot more than 16m, I have already spent more than that in 13 years here

[4MyEgo]

5 hours ago, 55Jay said:

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. 

 

When you have had enough, enough is enough, I bailed at 55 and will never return to the working rat race, although you give some good advise, but everyone has a breaking point.

 

This is probably more educational for a lot of expats than a suggestion, but pick what you like for your friend or yourselves as this research was done with intensity before I moved here.

 

The 1st thing your friend must do is check out the tax laws regarding non residents, as your friend will certainly become a non resident once he is out of the country for more than 183 days, this rule applies to every citizen who is out of their country of normal residence for tax purposes; meaning you are still a citizen, but you become a non resident and are charged a different tax as opposed if you still lived in your country of origin.  I know this applies in Australia and the tax laws on foreign residence are pathetic, e.g. 32.5% up to $80,000 on income derived from real estate, jumping to 37% after $80,000 if your fortunate enough, regardless if its your principal place of residence or not, and wait for it, there is no tax threshold, yep, no threshold, usually $18,200 before you start paying tax, so its straight up 32.5c in the $.

 

Term deposits are taxed at 10% on the interest earned, shares if fully franked, e.g. tax paid up front means you pay the difference, about 4%, however if they are not fully franked its 32.5% tax, but the good part is there is no capital gains tax payable on the increase of shares, if your lucky enough in this volatile market.

 

If you go back to real estate for a moment, capital gains tax is charged at 100% from the date you leave the country, e.g. if you rent your principal place of residence out, you will be up for full capital gains tax from the date you departed the country and applies if your out of the country for more than 183 days, and for anyone telling you the 6 year rule applies, get that in writing from the taxation department, because it doesn't.  Once you have decided to change your abode, (place you live), your up sht creek as we say in Australia, but then again best check your countries laws, much the same, I would suggest, after all what are all these meetings every so many years with these government bureaucrats, scamming new plans to tax their departing citizens on.  

 

16 Million baht to retire on is doable if he wants to retire in this country as I have, however he must split his inheritance into 2, e.g. bank term deposit as low as the rates are, at least that part of his money is safe and will be government guaranteed if the bank goes belly up, and he will probably only pay 10% of the interest earned (withholding tax), providing he notifies his bank of his overseas address, the other half could go into bank shares which are paying around 5.6% fully franked (net), and remember no capital gains tax payable, again depending on the country he is from, all of the above is worth looking into because if he stuffs up, the taxman will come a knocking.

 

When I say 16 mil is doable, he will be living tight in BKK, Phuket or Pattaya, he would be more than likely be living the life of a rural hermit like myself, who fly's to BKK & Phuket when one feels the urge, failing that there are other places that can be as equally satisfying and much cheaper, however no blue ocean to look at.

 

[akentryan]

Rough estimate of how long it would last invested at 1.91% the latest bank rate for a similar deposit. The interest would be approximately 300,000 a year. Assuming 600,000 a year non-lavish living expenses leaves an annual shortfall of 300,000 a year which would increase by about 2 % as principal is reduced. Also based on renting not buying a condo. Fifty years plus or minus barring that old bugaboo - unknown medical costs. Makes the assumption that annual living costs will be matched by a rise in the interest rate to be earned. Possible but again not lavish living. Quite likely to be OK for 40 plus years.

[chiang mai]

4 minutes ago, khunPer said:

16 million baht over 25 years with a nominel interest in the area of 3 percent from bonds, that will average 700,000 to 800,000 baht a year; or little more than 60,000 baht a month, which is actually about the figure stated for retirement by the Thai authorities.

However, it's all a question of lifestyle – and future lifestyle – for some folks 60,000 baht a month is far more than enough; for others it work out just as well as a tailor will do in Hell.

Any back-up from government retirement pension; and what happen, if your friend fall in love with a Thai..?

 

I wish your friend good luck...

 

I'm not sure I would want to go all in on the bonds market and have that as my only financial thread for the rest of my life.

[Mansell]

I find this conversation very amusing. If I had that kind of money I would have been here years ago, and probably most people on here. The comment about going a few blocks to save a few baht is right on the money. If the guy is an idiot the money will be gone quickly whether he stays in London (which is very expensive) or if he comes here. Look at all the lottery winners with millions of pounds who blew it all in a few years. The average person doesn't have a clue how to handle real money, and that is why there are so many investment advisors thriving. The smartest thing to do with real money is property wherever you live.....everything else does not appreciate steadily in the long run.

[khunPer]

Just now, chiang mai said:

 

I'm not sure I would want to go all in on the bonds market and have that as my only financial thread for the rest of my life.

It was not a financial suggestion, but an example of what 16 million baht is like over 25 years; 3 percent is a fair average market interest for calculation.

[chiang mai]

19 minutes ago, ThaiPauly said:

I Retired in Thailand at 49, I am still here, but I came with a lot more than 16m, I have already spent more than that in 13 years here

 

Ditto, except I was 54. But your point about seeing your net worth decrease by 16 million over 13 years should be taken to heart, this despite risk aversion, spread investments and not a small amount of financial acumen, it can easily happen.

Edited August 15, 2016 by chiang mai

[Chivas]

53 minutes ago, yellowboat said:

He sounds like the perfect sucker this country attracts and the word "work" is a four letter word in Thailand.  He is far to young to stop working.  At the very least, he can volunteer and have his expenses covered. 

 

lol 50 too young !!

[KittenKong]

1 hour ago, chiang mai said:

And to the poster who suggests that very few members have anything like 16 million in cash assets, you'd be very surprised at the extent of wealth that exists on TVF, most members however have sufficient class and good taste not to talk about it!

 

Actually it's all the begging messages that really p*ss me off.

 

I suppose I should stop sending them.

[bazza40]

It's possible; however, he would have to generate income while waiting for a UK pension to preserve capital. Fairly difficult in these times as savers are being dudded in favour of debtors.

 

The worst thing he could possibly do is bring the 16 million baht to Thailand. His best course of action is to invest 80 - 90% of his funds in the UK for income, and only bring 10-20% here.

 

Retiring at 50 is a rather drastic step. I found it difficult to come to terms with retiring at 70.

 

 

[metisdead]

Bickering posts have been removed.  Another post containing inflammatory comments has been removed:

 

7) You will respect fellow members and post in a civil manner. No personal attacks, hateful or insulting towards other members, (flaming) Stalking of members on either the forum or via PM will not be allowed.
 

[Johnniey]

1 hour ago, GuestHouse said:

50 years old!

 

Bht 16million will probably give him, and whoever he finds to help him spend it, 4 good years together, follwed by 12-18 bad months together, and  futher 6-12 months of him wondering what went wrong, were the money went while he plucks up the courage to go back home.

 

Arriving home at age 55-56 years old, no cash and 5 or 6 years out of the job market.

If he's lucky without kids to take care of.

 

On the otherhand, he could invest now, continue working, enjoy great holidays and an early 'sustainable' retirement in 7 or 8 tears time.

Or he might be bored shitless and die in 9 years.

I cam to Thailand on Aug 10, 1985 with 1000 BGP. I spent it in 2 weeks and had to get a job. I'm still here.

 

Get on that plane mate, there is SO much one could do with 12 million baht. I wouldn't listen to the rich guys here. Time for Naam to come in and tell us that's how much he gives his gardener, butler and maid in a couple of years.

[Johnniey]

41 minutes ago, chiang mai said:

 

Ditto, except I was 54. But your point about seeing your net worth decrease by 16 million over 13 years should be taken to heart, this despite risk aversion, spread investments and not a small amount of financial acumen, it can easily happen.

What are you guys doing? Drinking every night and giving money away to women? Losing houses?

 

I had a mate who earned 12 million a year and even with cars a speedboat and a <deleted> airplane he couldn't spend that much

[chiang mai]

13 minutes ago, Johnniey said:

Or he might be bored shitless and die in 9 years.

I cam to Thailand on Aug 10, 1985 with 1000 BGP. I spent it in 2 weeks and had to get a job. I'm still here.

 

Get on that plane mate, there is SO much one could do with 12 million baht. I wouldn't listen to the rich guys here. Time for Naam to come in and tell us that's how much he gives his gardener, butler and maid in a couple of years.

 

Risk and luck are two totally different things, I'm happy for you that you were lucky but sensible people would hardly recommend a 50+ year old to make financial  plans on the basis of luck alone.

[Johnniey]

2 hours ago, Chivas said:

16 Million at current rates is around £347,000. Christ I do it on half that albeit the money wouldn't  just be at 0.5% interest

The bread heads have arrived and like to boast about how much they need.

 

Personally, with 4 kids, one at Uni in the UK, I need slightly more than 100k a month but when the last kid is finished in a couple of years, house paid for, I could live well on 50k a month. That includes holidays abroad.

[chiang mai]

4 minutes ago, Johnniey said:

What are you guys doing? Drinking every night and giving money away to women? Losing houses?

 

I had a mate who earned 12 million a year and even with cars a speedboat and a <deleted> airplane he couldn't spend that much

 

Somebody who earns 12 million baht a year will almost certainly spend over 1.2 million baht a year so you seem to be making the story up as you go along. Please stop that or we wont talk any more!

 

As for why or how a person could see their net worth reduced by 16 million over 13 years: think currency exchange rates versus fixed term investments versus the Lehmans financial crisis of 2008.

 

[Laza 45]

10 hours ago, chiang mai said:

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.

That is my thinking too..  a small house in Isaan.. a quiet life.. do-able.. health insurance is a problem though especially as he gets older.. income on that amount is not enough with current interest rates.. a pension and that amount would just be enough I think.. it would be a very quiet life..  

 

[dontoearth]

I considered the same option as your friend at age 50 about 10 years ago.  However, my money was my own, made and saved, and invested slowly grown to just about that amount.  Perhaps you heard of our President at the time George Bush.  The investments crapped out by more than 50% in just a few months back in the 07/08 economic crash.  These were high quality mutual funds with no fees as they were offered by my employer as a benefit.  I have read all the investment advice from others and they must be from different countries, or planets, or a place where math works differently.  ROFL!   I can't think of any type of safe reliable return for your friend that would yield him yearly expenses.   In a big downturn everyone gets crushed.  If I had been here in Thailand I would have quite suddenly found myself rather panicked.  I sucked it up and worked until age 60 and got two pensions and recovered the money back from 07/08.   I was able to stay invested as I was working.  However, I am here now at 60 and just doing a small retirement visa.  I didn't sell my Chicago condo!  I didn't cash in my investments.  I am a firm believer in what one of the other posters said.  The first year out just make small steps.  I think your view between 50-60 years of age really does mature!  Hopefully, your friend is hoping for the best, and planning for the worst!

Edited August 15, 2016 by dontoearth

[JayBird]

Now I'm presuming he has no house/car to sell, nor has a house/condo in Thailand. 

 

If he plans to live long term here he needs to do some up-front purchases to reduce his cost of living:

1) Probably wise to purchase a 20-Year Thailand Elite Visa for 1M THB.  (Alternatives may be cheaper but this will make things easier for him)

2) Purchase a small, but good quality condo for about 3M THB.

 

That leaves him 12M THB out of his 16M Start. 

 

Which, as you may see, is not much.  Depending on how comfortable he wants to live will of course dictate his monthly/yearly expenses.  If we went with a modest 50k THB/mo (that's 10k/week plus a little buffer), that would be 600,000 THB / year. 

 

That will let him run out of cash in 20 years.  If he lives for 21 years, he'll be in trouble   If he wants to spend more than that or enjoy a few things on the side he'll be out of luck.  So it's *VERY* tight.

 

Obviously if he spent less it would last longer, but it might not be the quality of life he wants to enjoy -- just scrapping by and always a bit worried.  Not saying he has to spend, spend, spend every day like money is going out of fashion, but there are lines in between and he has to find his comfort zone.  Lots of threads here (including one by me) on living expenses. 

 

What would be a better option is for him to put that money to work for him so it can earn him enough to cover his expenses.  In theory, if he invested the 12M THB in an investment that returned 5%, that would get him 600,000 THB/year.  He would draw down in the original 12M THB over time to compensate for inflation.  However, now he needs a good financial advisor and someone to help him with this.

 

Note: If you are considering annuity be *very* careful -- they often neglect to mention that most do not compensate for inflation.  5% per year for life sounds great --- except in 20 years that same 5% is nothing due to inflation

 

Bottom line: If he can not use that money to make him MORE money then he will have problems.

 

Suggestion:  Go Semi-Retired if he can (work 6-9 months/year and take the rest off in Thailand).  Do this until he has some more money in the bank.

 

[thaipo7]

Your friend could have one hell of a week in Pattaya with the money.