Retiring with 16mn Baht

[Pdaz]

Dacia Sandero ?  Frankly I'd rather walk.. You only live once. Being "frugal Dougal" your whole life is even worse than being "Spend it Sam" At least Sam enjoyed himself. The ideal is to save a bit, spend a bit. I economize and try to be a canny shopper but not to the extent where I have to forego quality. Buying nasty tasting ( to me ) wine for 300 Baht is pointless cos I won't enjoy it. I'd rather drink less often and "save" to buy a drinkable 600 Baht bottle.  I'm certain it's posible to live on 50K baht a Month as long as you are sensible and have a house/condo paid for along with car/truck etc. If you don't smoke, drink to excess or expect to eat imported food daily it's very do able. However inflation, medical costs, insurance and the odd unexpected bill means living on a fixed income for a longer term is very uncertain. Currently my fixed Monthly expenses are less than 10K (Elec, Internet, TV, Car insurance, Gardener/Pool) In addition we spend another 30-40k on food, entertainment and incidentals. However spending a weekend in BKK, Buying a new phone, Furniture or just getting an A/C serviced can quickly add to this. My wife works so we can easily live on her earnings and save all of mine ( I usually take care of any big purchases ) I'm 4 to 5 yrs away from retiring ( I may do the odd short contract job for extra income as I'm still below official retirement age ) and currently thinking 150K a Month is what I need to be comfortable. I know I won't spend that every Month but I feel it's better to have something extra in case of problems.

If at age 50 ( my current age ) I  had 16 mil in savings with no house, car or knowledge of Thailand I certainly wouldn't have any thoughts of retiring.. Because I'd have no wish to restrict my lifestyle and  live on a tight budget for another 30 -35 years ( if healthy )

I'd say he'd be far better off working on and saving for at least another 5 years. Unless of course he's happy to accept the much lower lifestyle and the risk of a destitute future.

 

[donmarcop]

asking the question is a bit nonsensical s you have you own set of values, priorities, lifestyle choices independent of anyone else. IMHO one major draw of SE asia is that one "can" lively extremely cheap if they desire, or not. If they wish to recreate their lifestyle in the West, start adding $$$.

Personally, I haven't spend close to 2k on my monthly expenses when I was in Thailand or the last several years the PI. Most of my hobbies/time spent re enjoying free things (run, bike, swim, read, etc). I'm perfectly comfortable in a studio fan room, and I enjoy preparing most of my own food/eat fruit instead of go to restaurants.  I don't cll it trying to be overly frugal/spartan, it's how I live/doing what it is I enjoy.

YMMV.

Edited August 18, 2016 by donmarcop

[berybert]

People sometimes don't seem to grasp the concept of 'you cant take it with you'.

As a single man (I intend to stay that way) is there any need for me to worry about having as much money in the bank when I'm dead as I have now ?

I'm far from rich, but do own a 3 bedroom house just outside of London, and a flat in Liverpool.  I will pick up a work pension and a state pension in years to come. I also have a fair bit of money in the bank.

People will tell me I need to worry about making sure I have enough to cover me until my death.

I live a simple life, I have no need for a car, motorbike or iPhone. I currently work and struggle to send anymore than £100 a week.

I lived in Thailand for 18 months and struggled to spend more than £100 a week there + £100 a week on my rent.

I shall be moving back to Thailand some time early next year and will still spend no more than £200 a week. My income will be far more  than that.

Just because I wont be working, tho I will hope to find a job, I am not going to go crazy and live like I am going to die in a week.

So where was I ?  Oh yeah, your mate should have no worries unless he wants to die with a fortune in the bank. Then he might want to carry on working until he is dead.

[Crowes]

On 8/14/2016 at 10:59 PM, 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.

 

 

16 million baht at 8% average return would be easy to live off at 50 for the rest of your life. That's not counting social security or pension either which most people have.

[gk10002000]

13 hours ago, TallGuyJohninBKK said:

Just as an example, a common guide in retirement planning is that a working age person should plan on not withdrawing more than about 4% per year of their overall savings in retirement -- if they expect it to last for their remaining lifetime.

 

So, if such a person started out today with $500,000 U.S. -- which is a larger amount than the OP's friend has right now -- that 4% drawdown rate would yield an annual income of about $20,000 per year, or $1,666 per month (a bit under 57,000b per month).

 

A person certainly can live on that amount per month in Thailand. But, not richly. And that assumes no big capital expense drawdowns, etc etc. So, as I said above, it's borderline. Could work out OK, but the person would need to be careful about their funds, and live within their means. Because, no other sources of backup income to rely on.

 

And again, a lot depends on what the OP's friend does with the 16M during his "retirement" years. If he simply is relying on the market value of stocks and gets caught in a stock market downturn, that could quickly and substantially lower the value of his nest egg. But of the flip side, if he invests the money in something that produces a reliable income stream not tied to stock market values, then that's going to produce a better result.

Why don't people do some basic financial smarts and stop thinking of just drawing down the money?  It is not hard to get 4% tax free from any of several Municipal bond funds (NEA,NUW, PRTAX, PZA), 10% from taxable REITS (NLY for example), 4% taxable from any of several Stocks (T for example).  For you folks contemplating just burning through cash, please get some financial advice about basic investing.  There is nothing wrong with some draw down and negative spending but things can last much much longer with just a little bit of up front investing.  Remember the line from Ocean's 11 "I want my last check to bounce"?

[TallGuyJohninBKK]

The good issue you raise I addressed already at length in post #210 above.

 

Indeed, I've lived here quite a few years already, and during that time, have done so off the income flow of my investments. Haven't drawn down from my principal stock market holdings at all.  But not everyone invests and lives that way.

 

Also, unlike the OP's friend, I also have a private employment lifetime pension to supplement my earnings, as well as future Social Security to look forward to.

 

That's also why I wrote above:

 

"a lot depends on what the OP's friend does with the 16M during his "retirement" years. If he simply is relying on the market value of stocks and gets caught in a stock market downturn, that could quickly and substantially lower the value of his nest egg. But of the flip side, if he invests the money in something that produces a reliable income stream not tied to stock market values, then that's going to produce a better result."

 

Edited August 18, 2016 by TallGuyJohninBKK

[TallGuyJohninBKK]

2 hours ago, Crowes said:

 

16 million baht at 8% average return would be easy to live off at 50 for the rest of your life. That's not counting social security or pension either which most people have.

 

I don't know of many 8% stable NET (after expense and taxes) earning investments that don't carry a decent risk of loss of principal -- something the OP's friend probably would not want to risk too much with his only source of income.

 

[Scotwight]

8 hours ago, Naam said:

i have no idea why anyone would rent.

Because you can't legally own land here (I know some people are special ). Because your neighbors might turn funny and necessitate a move.  There is no zoning and someone may open up a pig farm next to your house.  Immigration might get strange and moving to a rational place might make sense.  Your old girlfriend might find you (not a problem for those odd fellows without old Thai girlfriends - but for us normal guys it is a concern.  Another crackdown on companies that own houses in contravention of the law. You want more?

[chiang mai]

10 minutes ago, Scotwight said:

Because you can't legally own land here (I know some people are special ). Because your neighbors might turn funny and necessitate a move.  There is no zoning and someone may open up a pig farm next to your house.  Immigration might get strange and moving to a rational place might make sense.  Your old girlfriend might find you (not a problem for those odd fellows without old Thai girlfriends - but for us normal guys it is a concern.  Another crackdown on companies that own houses in contravention of the law. You want more?

 

Your list of reasons doesn't include the possibility of a nuclear first strike, by one Thailands aggrieved nieghbours!!!

[sezze]

7 minutes ago, Scotwight said:

Because you can't legally own land here (I know some people are special ). Because your neighbors might turn funny and necessitate a move.  There is no zoning and someone may open up a pig farm next to your house.  Immigration might get strange and moving to a rational place might make sense.  Your old girlfriend might find you (not a problem for those odd fellows without old Thai girlfriends - but for us normal guys it is a concern.  Another crackdown on companies that own houses in contravention of the law. You want more?

I agree , but nobody can start a pigfarm or a chickenfarm next to your house .

Allthough , building a house , especially when you are not big age is not expensive ( no it is not 4 million for a decent house ) . You can do a lot of things yourself , which let's you learn the language and the shops/prices . It gives you something to do . All is depending on the area which you find , some are expensive , others are not . You can have a usufruct which insures you of having the house for as long as you live .

Rent , is ok pricewise and gives you the freedom to move . However pricing can go up fast and i do not know if you have any rights at all if you rent .

[Scotwight]

1 hour ago, sezze said:

I agree , but nobody can start a pigfarm or a chickenfarm next to your house .

Allthough , building a house , especially when you are not big age is not expensive ( no it is not 4 million for a decent house ) . You can do a lot of things yourself , which let's you learn the language and the shops/prices . It gives you something to do . All is depending on the area which you find , some are expensive , others are not . You can have a usufruct which insures you of having the house for as long as you live .

Rent , is ok pricewise and gives you the freedom to move . However pricing can go up fast and i do not know if you have any rights at all if you rent .

Since there is no zoning laws Thais can start any business next to you that they want - like fighting cocks or open all night bar.  Rent, the big right is freedom to move.  Usufruct is a good idea except when the brothers come to live in the house - I think you get the idea.  

[Scotwight]

2 hours ago, chiang mai said:

 

Your list of reasons doesn't include the possibility of a nuclear first strike, by one Thailands aggrieved nieghbours!!!

I lived in Thailand when we got attacked (with guns and bombs) by Cambodia and Vietnam.  No Nukes though.  

[DrDave]

5 hours ago, gk10002000 said:

Why don't people do some basic financial smarts and stop thinking of just drawing down the money?  It is not hard to get 4% tax free from any of several Municipal bond funds (NEA,NUW, PRTAX, PZA), 10% from taxable REITS (NLY for example), 4% taxable from any of several Stocks (T for example).  For you folks contemplating just burning through cash, please get some financial advice about basic investing.  There is nothing wrong with some draw down and negative spending but things can last much much longer with just a little bit of up front investing.  Remember the line from Ocean's 11 "I want my last check to bounce"?

 

Investing the balance in any sort of funds/bond/stocks/CDs with an average annual rate of return of 3%, while withdrawing 4% of the original balance annually (allowing for a 2% cost of living increase each year), will allow for funds to last approximately 21 years. If you can get a 4% return, then you can squeeze out another 3 years.  After that, the balance will be zero - you'll have nothing. If this was my only source of income, I'd want to be very sure I wasn't going to live more than 20 years.

 

REITS can be very volatile. I know this from experience - I had one that was paying a super-high monthly dividend, but in a very short period of time, lost over 50% of its value. Fortunately, the dividends (which have been repeatedly reduced, but are still relatively high) over time have recouped the majority of the loss, but I'm still underwater. I wouldn't recommend REITs to someone depending upon their portfolio for income.

[4MyEgo]

On 16/08/2016 at 7:32 PM, 55Jay said:

Of course, we don't know that much about the guy but it's not unheard of for people to go a little bonkers if they come into a financial windfall.  This guy's savings and the inheritance total 16m Baht.  Perhaps this is the most money he's ever had, or dreamed of having, all at one time, and that can be intoxicating and lead to poor decisions.  All I, others and even the OP, are suggesting is he sit tight, let the, "OMG I'm rich!!!" moment pass, then approach this rationally.

In that case it makes very good sense, because like you say, if he hasn't busted his guts to earn it, he might not respect it as much as us that have. In his case would definitely sit on it for 5-10 years, take the trips to and from, but keep the job, see if I like what I see, feel, before jumping in   

[4MyEgo]

7 hours ago, Crowes said:

 

16 million baht at 8% average return would be easy to live off at 50 for the rest of your life. That's not counting social security or pension either which most people have.

Are we over looking something here, e.g. does the country he currently live in, presuming the UK have tax laws for non-residence, e.g. if he leaves the country for more than 6 months in a financial year, he gets classed as a non resident, although still a citizen, his tax situation changes, e.g. full capital gains tax on property, meaning all profit goes to the government, and tax on earning from rent is at a higher rate, then add council, water rates, insurances, maintenance, agents fees, vacancy factor, and his income stream is reduced to perhaps half and there would be no capital appreciation.

 

This is how they do things down under in Australia, I would imagine it would same same in most countries, just a thought, because if that's the case, then property would not be the way to go

 

[4MyEgo]

11 hours ago, Naam said:

i have no idea why anyone would rent.

Super cheap to build,  quality 4 beds, 2 baths, living, kitchen/dining, family room 1.5 (don't have to move) King of me castle

[4MyEgo]

On 18/08/2016 at 2:27 AM, TallGuyJohninBKK said:

I think the answers above reflect the reality of the situation faced by the OP's friend:

 

Although 16 million baht sounds like a lot, it's not really so much if that's ALL a person expects to have for his financial resources in the many years ahead. With that as his only financial resources, I'd say the chances of success would be borderline, depending on 1) how frugal or extravagant a lifestyle the friend intends to live, and 2] how long he will end up living.

 

I know I can live here in BKK on roughly $2,000 U.S. per month -- renting a very affordably priced apartment in a good area (lucky for me), married with a working, frugal wife, no kids, live a comfortable lifestyle, but we don't spend a lot on expensive capital purchases because we have the basic things we want and need. (Making bad choices and getting involved with the wrong Thai woman could easily see his savings quickly and substantially depleted).

 

But, I'm not planning my financial future on a budget of ONLY $2,000 U.S. per month, because prices will rise, health insurance will get more expensive, life may throw unexpected curves, etc etc.  So in my case, beyond the basic amount we spend right now, I have for the future added amounts both from private retirement funds (which continue to grow and I haven't tapped yet) and U.S. Social Security (which I'm still a few years away from being eligible for).

 

So, I could live on the expectation of spending $2,000 U.S. per month for the time being. But I wouldn't want to plan my financial future on the expectation that I'd HAVE to live on no more than $2,000 U.S. per month for the rest of my life. And unfortunately for the OP's friend, it sounds like the 16 million is his ONLY financial resource, period.

 

16 million baht = $470,000 U.S. -- over 20 years = $23,500 per year, or roughly $2,000 per month.  Of course, that's not considering any earning potential from the original funds, the results of which would depend on the OP's friend's success or lack thereof in investing.

 

 

 

 

You come up with some good points, the only question I have for you, not wishing to burst your bubble is the social security, which I am assuming from an Aussie's point of view is a government paid pension ? 

 

I hope its not the same in the US, but in Australia, you must return for 2 years prior to your retirement age, and stay in the country for 2 years after, that's a total of 4 years to get your pension which is out of the question for me.

 

Be interested to hear if anyone else has the same or similar rules in their country of birth, be worth investigating, because could be a lot of bubbles being burst ?

 

 

[DrDave]

1 minute ago, 4MyEgo said:

 

You come up with some good points, the only question I have for you, not wishing to burst your bubble is the social security, which I am assuming from an Aussie's point of view is a government paid pension ? 

 

I hope its not the same in the US, but in Australia, you must return for 2 years prior to your retirement age, and stay in the country for 2 years after, that's a total of 4 years to get your pension which is out of the question for me.

 

Be interested to hear if anyone else has the same or similar rules in their country of birth, be worth investigating, because could be a lot of bubbles being burst ?

 

 

No such restrictions for Social Security in the US.  While it's taxable to a certain extent (some complicated calculations are involved), there are no residency restrictions.

[evilebxxx]

3 hours ago, Scotwight said:

Because you can't legally own land here (I know some people are special ). Because your neighbors might turn funny and necessitate a move.  There is no zoning and someone may open up a pig farm next to your house.  Immigration might get strange and moving to a rational place might make sense.  Your old girlfriend might find you (not a problem for those odd fellows without old Thai girlfriends - but for us normal guys it is a concern.  Another crackdown on companies that own houses in contravention of the law. You want more?

Yeah that’s is huge problem. Former wife, g/f will certainly hunt the farang down; I have seen that many times, money money

[gk10002000]

1 hour ago, DrDave said:

 

Investing the balance in any sort of funds/bond/stocks/CDs with an average annual rate of return of 3%, while withdrawing 4% of the original balance annually (allowing for a 2% cost of living increase each year), will allow for funds to last approximately 21 years. If you can get a 4% return, then you can squeeze out another 3 years.  After that, the balance will be zero - you'll have nothing. If this was my only source of income, I'd want to be very sure I wasn't going to live more than 20 years.

 

REITS can be very volatile. I know this from experience - I had one that was paying a super-high monthly dividend, but in a very short period of time, lost over 50% of its value. Fortunately, the dividends (which have been repeatedly reduced, but are still relatively high) over time have recouped the majority of the loss, but I'm still underwater. I wouldn't recommend REITs to someone depending upon their portfolio for income.

I didn't mean to give any specifics.  I meant more to stress along the lines that people should not just think of sitting on a pile of money and drawing it down.  As far as REITs, sure there have been some ups and downs, but people panic too much about the value when often they should just be concerned with the yield.   It is like owning a house where the value went down.  No big deal unless you are in a forced to sell position. Of course nobody should put a large part of their portfolio in anything.  I have about 6% of my portfolio in NLY.  A fair risk to reward ratio in my opinion.   Anyway,  I own all the equities I mentioned in my first post and here are some others I also own: PFXF, PGX, PRHYX, JDYRX, JDTRX, ANARX plus good old BP!   I am in the USA and all the tax free muni funds as well as my municipal bonds are in my regular brokerage account, and the other equities are in my tax free ROTH account, and some are in my traditional IRA which in about one year from now when I expect to be in a very much lower tax bracket and of course being a FL resident, I will be converting a good part of my traditional IRA to a Roth IRA.  The main reasons are 1:  I dodged any state income tax on those monies that I earned working in taxable states 2: the ROTH IRA has no Required Minimum Distribution (RMD).  I want to access my money on my timetable, not the IRS. 

 

Once I got close to 1 Million, I decided I can finish up my next  3 or 4 years of work by being very conservative and letting my stuff just compound some more while I of course add to it, and in 3 years when I am eligible for social security I should be in good shape for retirement if chosen. 

 

There are some very good withdrawal calculators on the internet that people should fiddle with.  It can be quite an eye opening.

[TallGuyJohninBKK]

4 hours ago, Scotwight said:

Because you can't legally own land here (I know some people are special ). Because your neighbors might turn funny and necessitate a move.  There is no zoning and someone may open up a pig farm next to your house.  Immigration might get strange and moving to a rational place might make sense.  Your old girlfriend might find you (not a problem for those odd fellows without old Thai girlfriends - but for us normal guys it is a concern.  Another crackdown on companies that own houses in contravention of the law. You want more?

 

I tend to agree with Scot's assessment above re the risks of owning property in Thailand -- ESPECIALLY in the case of the OP's example where those funds are his friend's SOLE financial asset and source of income.

 

But I think you left out the MOST important reason: unless the person happens to be one of the precious few who obtain permanent residency here (or those who have paid big $ for multi-year TE visas), the rest of us are just a government law or Immigration rule change away from being kicked out of the country. One year permissions to stay. No right to long-term residency.

 

You may be able to own some place. But that doesn't mean you'll also be guaranteed the right to be able to continue to live there. If I were the OP's friend, I wouldn't want to tie up a good portion of my retirement funds in that kind of environment.

 

Edited August 19, 2016 by TallGuyJohninBKK

[rhodie]

1 hour ago, 4MyEgo said:

 

You come up with some good points, the only question I have for you, not wishing to burst your bubble is the social security, which I am assuming from an Aussie's point of view is a government paid pension ? 

 

I hope its not the same in the US, but in Australia, you must return for 2 years prior to your retirement age, and stay in the country for 2 years after, that's a total of 4 years to get your pension which is out of the question for me.

 

Be interested to hear if anyone else has the same or similar rules in their country of birth, be worth investigating, because could be a lot of bubbles being burst ?

 

 

 

This is wrong. You only have to spend 2 years in total. So if you arrive 2 years before the pension, you can leave once you get it and it is portable. If you arrive at pension age, you have to stay for 2 years and it is portable.

[Scotwight]

1 hour ago, 4MyEgo said:

Super cheap to build,  quality 4 beds, 2 baths, living, kitchen/dining, family room 1.5 (don't have to move) King of me castle

Cool.  But you don't own the land.  No way no how.  Someone else may move into your castle at the whim of the land owner. 

[GarryP]

13 hours ago, Scotwight said:

Rent is super cheap in Thailand.  I have no idea why anyone would buy.

Perhaps because there are some of us who can actually own the property, including land. Also, property tends to increase in value and gives a better return on investment than parking money in a bank account and tends to be safer that playing the market, especially for those with no experience. Ultimately, when funds are running out one can sell the property for a tidy profit and start renting.   

[dick dasterdly]

17 minutes ago, Scotwight said:

Cool.  But you don't own the land.  No way no how.  Someone else may move into your castle at the whim of the land owner. 

 

2 hours ago, 4MyEgo said:

Super cheap to build,  quality 4 beds, 2 baths, living, kitchen/dining, family room 1.5 (don't have to move) King of me castle

Quite apart from the obvious 'land' issue - I had to laugh at the "quality" build comment!

 

Its only "quality" until you discover the myriad of things done badly.....

[DrDave]

46 minutes ago, gk10002000 said:

I didn't mean to give any specifics.  I meant more to stress along the lines that people should not just think of sitting on a pile of money and drawing it down.  As far as REITs, sure there have been some ups and downs, but people panic too much about the value when often they should just be concerned with the yield.   It is like owning a house where the value went down.  No big deal unless you are in a forced to sell position. Of course nobody should put a large part of their portfolio in anything.  I have about 6% of my portfolio in NLY.  A fair risk to reward ratio in my opinion.   Anyway,  I own all the equities I mentioned in my first post and here are some others I also own: PFXF, PGX, PRHYX, JDYRX, JDTRX, ANARX plus good old BP!   I am in the USA and all the tax free muni funds as well as my municipal bonds are in my regular brokerage account, and the other equities are in my tax free ROTH account, and some are in my traditional IRA which in about one year from now when I expect to be in a very much lower tax bracket and of course being a FL resident, I will be converting a good part of my traditional IRA to a Roth IRA.  The main reasons are 1:  I dodged any state income tax on those monies that I earned working in taxable states 2: the ROTH IRA has no Required Minimum Distribution (RMD).  I want to access my money on my timetable, not the IRS. 

 

Once I got close to 1 Million, I decided I can finish up my next  3 or 4 years of work by being very conservative and letting my stuff just compound some more while I of course add to it, and in 3 years when I am eligible for social security I should be in good shape for retirement if chosen. 

 

There are some very good withdrawal calculators on the internet that people should fiddle with.  It can be quite an eye opening.

 

It looks like you've got a really good strategy in place!  (Sorry to go a little off topic from the OP). I'm already retired, and began drawing from my IRA just last year. Currently, in the process of liquidating most equities in my IRA with an eye toward shifting more toward fixed income holdings. 

 

I agree that 6% in an REIT is minimal risk when looking at the big picture, but I'm apprehensive myself because my REIT's share price hasn't recovered since diving about 5 years ago, hence my warning not to invest heavily in an REIT, especially with interest rates certain to rise during the next few months. The other way of looking at that, I guess, is that for the past 5 years the share price has been much more stable (although in a gradual decline), but the dividend is well over 10%.

 

I'm wondering a little about your plan to convert some of your Traditional IRA to a Roth IRA. I never did it because my assumption is that it's not a simple "rollover". That is, any amount that you move to the Roth IRA will be treated as a distribution from the Traditional IRA, and subject to federal tax as regular income.  If "rolling over" 500K, then I think you'd be liable for around 140-150K in taxes. The IRS is now going to want to collect the tax that was never levied against the earnings that made up the Traditional IRA contributions, as well as any investment gains. If you have an aggressive investing strategy in the Roth IRA, I suppose you may be able to recoup the tax in a few years, but I think it's kind of a crap shoot in order to eliminate the required distributions and have tax-free distributions from the  Roth account in the future.  

[dick dasterdly]

18 minutes ago, GarryP said:

Perhaps because there are some of us who can actually own the property, including land. Also, property tends to increase in value and gives a better return on investment than parking money in a bank account and tends to be safer that playing the market, especially for those with no experience. Ultimately, when funds are running out one can sell the property for a tidy profit and start renting.   

Foreigners on visas or extensions can't OWN land, they can only find a way around it - which can be stopped if the authorities decide to have a genuine crack-down on these methods.  I assume you're part of the tiny minority that have residence status?

 

But (for those doing this) so far, so good.

 

It also has to be said that trying to sell ordinary (i.e. not those top tier properties 'on the beach') second hand houses/condos etc. nowadays, only results in a loss - not a profit.

Edited August 19, 2016 by dick dasterdly

[slipperylobster]

4 minutes ago, dick dasterdly said:

Foreigners on visas or extensions can't OWN land, they can only find a way around it - which can be stopped if the authorities decide to have a genuine crack-down on these methods.  I assume you're part of the tiny minority that have residence status?

 

But (for those doing this) so far, so good.

 

It also has to be said that trying to sell ordinary (i.e. not those top tier properties 'on the beach') second hand houses/condos etc. nowadays, only results in a loss - not a profit.

 

Not only that...what makes people so certain that they can stay forever? Political Instability in the future, visa problems, divorces, financial losses, criminal charges (let's hope not), and even a drop in the exchange rate ....all might make a quick move elsewhere very appealing.  

 

Don't burn bridges.....what may look like a hundred percent guarantee of safety and financial security may take a quick turn.  A house/condo in your homeland makes much more sense...if you are looking to invest.  The people I know (including myself) look at their home as being something given away to their children...eventually...    Not an investment.

 

[GarryP]

7 minutes ago, dick dasterdly said:

Foreigners on visas or extensions can't OWN land, they can only find a way around it - which can be stopped if the authorities decide to have a genuine crack-down on these methods.  I assume you're part of the tiny minority that have residence status?

 

But (for those doing this) so far, so good.

 

It also has to be said that trying to sell ordinary (i.e. not those top tier properties 'on the beach') second hand houses/condos etc. nowadays, only results in a loss - not a profit.

Not PR, but the next step up. Second hand houses can turn a nice profit here in BKK and the suburbs. The house I bought in Bangkok five years ago has already increased in value by approximately 30 percent (based on second hand sales prices in the same estate in 2016). However, if I were to build a 3 million house out in the sticks it is exceedingly unlikely that I could recoup my investment, whereas perhaps with something for about 500k or 1 million I would have a better chance. So location is definitely an issue. You would need to buy in an area where there is demand and the local population has the necessary buying power. 

[TallGuyJohninBKK]

19 minutes ago, DrDave said:

I'm wondering a little about your plan to convert some of your Traditional IRA to a Roth IRA. I never did it because my assumption is that it's not a simple "rollover". That is, any amount that you move to the Roth IRA will be treated as a distribution from the Traditional IRA, and subject to federal tax as regular income.  If "rolling over" 500K, then I think you'd be liable for around 140-150K in taxes. The IRS is now going to want to collect the tax that was never levied against the earnings that made up the Traditional IRA contributions, as well as any investment gains. If you have an aggressive investing strategy in the Roth IRA, I suppose you may be able to recoup the tax in a few years, but I think it's kind of a crap shoot in order to eliminate the required distributions and have tax-free distributions from the  Roth account in the future.  

 

This is just for Americans

 

Rolling over IRA proceeds into a tax-free Roth IRA can be a very good long-term financial planning move --  if it's done early enough to enjoy the benefits, and if done in a smart financial way.

 

Yes, the rollover is a taxable event, so you're going to pay taxes on the amount you roll over into a Roth. But, once in the Roth, you'll  never pay any taxes again, nor will you have any RMD (required minimum distribution) requirement.

 

As for the rollover itself, I believe, the IRS recently enacted a new rule clarifying that any taxpayer can only do ONE IRA rollover per tax year. So you have to be careful to follow that.

 

So, the normal way to handle such rollovers is to do a modest amount each year, gradually year after year, so that the amount added to your taxable income for that one year ideally doesn't push you into a higher (or much higher) tax bracket. For example, do $10K a year, and over 10 years, you've moved more than $100,000 into a totally tax free, permanent earnings account.