Never invest more than you are prepared to walk away from, huh?

[lkn]

When people talk about buying property in Thailand, I often see replies like “never invest more than you are prepared to walk away from”.

 

I think people are confused about a few things, so let me try to give some context to those parroting this mantra.

 

1. Investing should not be confused with gambling. When you gamble you can lose everything, so a more proper advice is to not gamble more than you can afford to lose. Applying this to investments is nonsensical, for example the common advice is to have your retirement funds invested, yet most people would not be able to just walk away from that.
2. Buying your second condo (or house) should not be an investment, hopefully you buy it primarily to enjoy it and the advantages buying gives you.
3. With the exception of people doing illegal stuff and then being banned from entering Thailand, nobody is forcing you to walk away from your property, so this really should not affect your decision to buy.

 

So the next time you are tempted to repeat the mantra, consider these things first:

 

Is the person buying to enjoy, or are they actually looking at it as an investment?

 

If they are looking at it as an investment, is it overpriced and/or extremely risky, as to caution the buyer that they are probably going to lose a significant amount of their “investment” solely because they are overpaying, or maybe buying an off-plan property from a developer with a bad track record.

 

Edit: In the above I am referring to property purchases that are 100% legal and in your own name (so basically limited to condos). So no need to reference the one or two guys in Phuket that lost all because they bought through a dubious setup and were minority owners together with a woman met in a bar who had a gambling problem.

Edited October 27, 2016 by lkn

[Gary A]

I am a firm believer in the don't spend more than you can afford to walk away from. You have one thing correct. If you buy a condo in your name, BEFORE, you are married. The key word is before you are married. I have no regrets from buying my condo. I did not buy it for an investment. I bought it because I  liked it and have no intention of selling it even though I now live upcountry in my WIFE'S house and only use it when I want a change of scenery. It sits empty the majority of the time.

[Good Lord]

You know that you can also lose everything when you invest. That does not make it gambling. I mean every investment has gambling elements in it but the amount you may lose has nothing to do with the distinction between both terms.

[KittenKong]

1 hour ago, lkn said:

When people talk about buying property in Thailand, I often see replies like “never invest more than you are prepared to walk away from”.

 

I dont think that quote is complete. The saying usually goes "never invest more in Thailand than you are prepared to walk away from", and as far as I can see that applies to property and also business investments/purchases.

 

I've lost track of the number of people I have met who have been scammed out of money here, by both Thais and farangs. Some have lost a little, some a lot. Some to shady business partners, some to greedy "life partners", some to crooked lawyers and some to outright thieves. Some have lost money simply because a karaoke bar or chicken farm or workshop opened up next to their nice condo or house, or a new illegal condo was built in front of theirs.

 

I have my entire wealth invested in a variety of things. If I lost it all I would be very badly off indeed. Does that worry me? Not particularly as only a tiny proportion of it is in Thailand. The rest is in countries where there is something approaching consumer protection and rule of law, and where the law is not heavily stacked against me. They are also places in which I could have permanent right of abode if I wish, and would not have to ask for permission to stay every year. This makes them very different to Thailand.

[williamgeorgeallen]

it is the second best piece of advice anyone can get before moving here. best piece of advice is 'rent everything, everything'. some people think they have beat the odds but almost always time will get them.

[dotpoom]

16 hours ago, Good Lord said:

You know that you can also lose everything when you invest. That does not make it gambling. I mean every investment has gambling elements in it but the amount you may lose has nothing to do with the distinction between both terms.

Absolutely correct......It is most people's dream to buy a home, marry and have children. Buying your own home has been the advice  (told to do) of our elders since time and imorial. The crash came in 2007/8 and a lot of people lost about half of their investment in their home. They didn't buy them with the attitude......."Heck, if I lose it all I'll just walk away from it".

[1FinickyOne]

You can minimise risk, you cannot eliminate it no matter what you do with your money. Even banks go under. Diversification is good. 

[JSixpack]

1 hour ago, williamgeorgeallen said:

it is the second best piece of advice anyone can get before moving here. best piece of advice is 'rent everything, everything'. some people think they have beat the odds but almost always time will get them.

 

You're looking for the shrewd, street-smart TVF Poster Three Primal Laws Of Survival In Thailand:

 

 1. Never invest in anything you aren't ready to lose;

2. Never own more than you can carry with you;

3. Keep your suitcase packed at all times.

 

Yeah, I codified those a couple years ago. Anybody suggesting "buying" can expect to be attacked not by owners, but our vast Fools Buy Real Estate brigade of mere renters, most of whom can't afford to buy anything anyway.

 

Quoting one or more of the Laws, as you have implicitly, gives you ten (+10) points of TVF posting cred from the peanut gallery. Congrats.

Edited October 28, 2016 by JSixpack

[JSixpack]

Duplicate post :(.

Edited October 28, 2016 by JSixpack

[Gary A]

I view rent as a total waste of money. As far as my assets, I have about half in the US (cash) and the other half here. I no longer trust the stock market and am now totally out of it. My LPL broker and I had a disagreement and I had him close out my account. Most of my cash is in bank accounts earning nearly nothing. I don't care. At least I can have the money in my hands whenever I want it.

[xerostar]

As soon as you get involved with any woman (Thai women especially) you will spend money and be tempted to "invest" in a future together by buying her some land, a house, a car, a traktor or whatever.

The chances that you will lose your money, your partner and your shirt are quite high IMHO.

As long as you have fun doing it and can afford to "walk away" then no harm done.

If you can't afford to lose too much then the utmost caution is recommended before "investing" in Thailand.

[Gary A]

20 minutes ago, xerostar said:

As soon as you get involved with any woman (Thai women especially) you will spend money and be tempted to "invest" in a future together by buying her some land, a house, a car, a traktor or whatever.

The chances that you will lose your money, your partner and your shirt are quite high IMHO.

As long as you have fun doing it and can afford to "walk away" then no harm done.

If you can't afford to lose too much then the utmost caution is recommended before "investing" in Thailand.

 

My Thai wife has put up with me for more than ten years. Yes, I have bought farmland for her future. If she were to throw me out tomorrow, she has earned everything I have ever bought for her. She says that she is now too old to train another farang and that she'll just keep me. As it stands, I'll always have my condo (my name before we were married) and I will always have a roof over my head. I'll certainly never miss any meals. My condo is totally furnished right down to a computer and a washing machine. It has everything I need except for my clothes.

[bamukloy]

Condo-3million, difficult to re-sell, corporate body fees, risk of law and visa changes.

Then if/when sold, you have the problem of getting your money out of the country.

Endless headaches.

Or

1million-rent for over 10 years, walk at any time, zero headaches.

 

Its like the 'buy a house you cant own' issue..

They keep reading the horror stories

You can keep telling them..but will they listen??

Mugs.5555

[williamgeorgeallen]

1 hour ago, JSixpack said:

 

You're looking for the shrewd, street-smart TVF Poster Three Primal Laws Of Survival In Thailand:

 

 1. Never invest in anything you aren't ready to lose;

2. Never own more than you can carry with you;

3. Keep your suitcase packed at all times.

 

Yeah, I codified those a couple years ago. Anybody suggesting "buying" can expect to be attacked not by owners, but our vast Fools Buy Real Estate brigade of mere renters, most of whom can't afford to buy anything anyway.

 

Quoting one or more of the Laws, as you have implicitly, gives you ten (+10) points of TVF posting cred from the peanut gallery. Congrats.

spot on. and i forgot the 'dont get married' for the bonus point. 

[Grubster]

2 hours ago, williamgeorgeallen said:

it is the second best piece of advice anyone can get before moving here. best piece of advice is 'rent everything, everything'. some people think they have beat the odds but almost always time will get them.

I agree with that, but I really don't care if all the money I spend here is lost, I will still receive the same hansom amount every month that I worked and invested to get previously. It is time to spend it now and as long as I'm having a good life I don't care how I blow it. I love to build things and my home here will be paid for when completed. I fully intend to leave it for my wife when I decide to move on to the next phase. I plan on living in a retirement home back home when I am unable to get around. I would do it here if I could find one as nice here. I would think that is one service they could excel at here with the cheaper labor and health care, but I just can't find a nice one.

[Gary A]

30 minutes ago, bamukloy said:

Condo-3million, difficult to re-sell, corporate body fees, risk of law and visa changes.

Then if/when sold, you have the problem of getting your money out of the country.

Endless headaches.

Or

1million-rent for over 10 years, walk at any time, zero headaches.

 

Its like the 'buy a house you cant own' issue..

They keep reading the horror stories

You can keep telling them..but will they listen??

Mugs.5555

 

My condo maintenance cost 10 baht per square meter or 600 baht a month. I think I can afford that. I don't intend to ever sell my unit so no problems with the money. I'll take my chances with the law and/or visa problems. I play by the rules regardless of how silly I think they are. I'm only a guest in this country and I want to stay.

 

I don't know about you, but I hate to even think about moving. After years of accumulating things, it's not like just packing a suitcase. Maybe my things are not worth a lot of money but they are mine and I want to keep them. Best of all, I'm content with things.

[newnative]

       Arrived in June 2010. Bought and sold my first condo, a small studio as that was all I could afford,  in 2010.  Sold my 13th condo about a month ago.  Average profit somewhere around 750,000 baht each after all expenses.  Never lost money on any of the condos, some made more, some less.   I'm not greedy and price realistically. Have sold to foreigners and Thais, usually using realtors.  Made a few mistakes along the way but hopefully learned from them. Currently own one condo I live in and two that I rent out--legally, long-term.   I have no doubt I can sell each of them for at least what I paid for them. Two are making money and I'm not paying rent to someone else on the one I am living in.  I realize there are times the rental condos will sit empty and I am ok with that--if you're not, don't buy a condo as a rental investment.

       My condo advice, for what it's worth.  If you are here short-term or don't know what you're doing, rent.  If you are going to be here for some years and like to own the place you live in, buying I don't think is as risky as some posters make it out to be, if you purchase wisely. There are always exceptions but here is what I would suggest if you decide to buy a condo in Pattaya:

1.  Buy in foreign name.

2.  Buy seaview.

3.  Buy from a large name-brand developer with a good track record of completing projects--especially if you buy off-plan.

4.  Buy on the baht bus line or just a short walk from it.

5.  Buy only after you have carefully studied your condo selection.  A condo is not an impulse purchase.

      Recently there was a poster who was moaning and groaning about having bought a condo for, I think, 1.3 million baht and now he is trying to sell it and the best offer he has gotten has been 795,000 baht.  So basically he paid around $38,000 USA dollars and is being offered around $23,000, a loss of around $15,000 if the condo sat empty the whole time and was not rented or used by the owner.  Not a horrific loss in my book and I am far from rich.  A 1.3MB condo is likely a studio or small 1 bedroom of around 35sqm. or less.  Even with a condo fee of 45 baht a sqm, his yearly cost to maintain the condo is only around 19,000 baht, or around $556.  Pretty cheap to keep a roof over your head.  If he's desperate for cash he can take the $15,000 and run.  If not, why not hang on to the condo--it's costing him so little.  Use it himself or rent it.  If he continues to try to sell, he should make sure it is listed everywhere. He should take a hard look at the condo from a buyer's eyes.  What does the buyer see?  Hopefully, a beautifully decorated, clean and neat, clutter-free condo that 'shows like a model'.  If not, he needs to get cracking. 

[hawker9000]

I think it's the OP who is actually confused.  so let me give some context to the bad advice.

 

If it's real property, in Thailand, and you're a foreigner, it IS gambling.

[georgemandm]

2 hours ago, Gary A said:

 

My Thai wife has put up with me for more than ten years. Yes, I have bought farmland for her future. If she were to throw me out tomorrow, she has earned everything I have ever bought for her. She says that she is now too old to train another farang and that she'll just keep me. As it stands, I'll always have my condo (my name before we were married) and I will always have a roof over my head. I'll certainly never miss any meals. My condo is totally furnished right down to a computer and a washing machine. It has everything I need except for my clothes.

I can say this if my wife thai or western said to me , she was to old to train a other man and she will keep me .

i would give her one and and piss her off .

if you are joking sorry but I would not put up with that s???. 

[1FinickyOne]

2 hours ago, Gary A said:

 

My Thai wife has put up with me for more than ten years. Yes, I have bought farmland for her future. If she were to throw me out tomorrow, she has earned everything I have ever bought for her. She says that she is now too old to train another farang and that she'll just keep me. As it stands, I'll always have my condo (my name before we were married) and I will always have a roof over my head. I'll certainly never miss any meals. My condo is totally furnished right down to a computer and a washing machine. It has everything I need except for my clothes.

 

Good for you - that tends to be what I see here too -  - the people who truly care about their wives, and have concerns for their well being and their future well being, seem to have marriages that last. Of course any marriage can fail, but ones with kindness and sharing are more likely to last. 

[georgemandm]

2 hours ago, Gary A said:

I view rent as a total waste of money. As far as my assets, I have about half in the US (cash) and the other half here. I no longer trust the stock market and am now totally out of it. My LPL broker and I had a disagreement and I had him close out my account. Most of my cash is in bank accounts earning nearly nothing. I don't care. At least I can have the money in my hands whenever I want it.

I will agree with you rent is total waste of money, but in thailand I think the opposite .

rent here not buy 

[1FinickyOne]

6 minutes ago, georgemandm said:

I can say this if my wife thai or western said to me , she was to old to train a other man and she will keep me .

i would give her one and and piss her off .

if you are joking sorry but I would not put up with that s???. 

 

Geez George - that is an obvious joke and he seems obviously to be in a nice relationship. 

[georgemandm]

4 minutes ago, kenk24 said:

 

Geez George - that is an obvious joke and he seems obviously to be in a nice relationship. 

How do you know it is a joke I have no idea and if it is I said sorry did I not .

[fletchsmile]

I used to listen to the mantra of "never invest in Thailand blah blah blah ... " when I first arrived by self proclaimed experts and anyone wanting to try and look like they're an old hand knowing what they are doing.

 

It was useful cautionary advice to stop and make you think when you're fresh off the boat and don't know what you are doing.

 

Keep an open mind though and learn for yourself.

 

Within a couple of years it's obvious that often people repeating the mantra again and again just don't know what they are doing with investments, and in particular Thai investments.

 

A couple of decades later, I think the more intelligent question is "can you afford not to invest in Thailand, if you're going to make it your home for the long term?

------------------------------------------------------

When it comes specifically to property? Personally I'm not a big fan of investing in property. Maintenance and hassles of administration are a key reason. Liquidity is another.

 

I also recognise property is not my area of expertise, which is probably the biggest factor stopping me invest too much in it. 

 

We did buy a condo about 9 years ago. Yes in my wife's name with a mortgage guaranteed by me for the first 3 years, which we paid off. I like the concept of nesting rather than investing when it comes to a home. Could we sell it? Might struggle, but I do know to buy another one would cost more today. Also THB has strengthened considerably vs my home currency so I'm glad I'm not renting based on home currency income.

 

Nice also to know the wife and kids have a roof over their head if I'm not around. Really nice having a family home that's ours. So I consider it an investment in life and our quality of life. Any financial gain is a bonus.

 

Cheers

Fletch :)

Edited October 28, 2016 by fletchsmile

[Bulldozer Dawn]

Hilarious how investments threads on TV only refer to property and condos.  Demonstrates how unsophisticated the average TV poster is.

 

The Thai Stock Market is up 20 percent this year and is currently the strongest market in all of Asia.

 

You can trade the Thai market with a small amount of capital, the shares are held 100 percent in your name, you pay no tax on your profits, and Thai brokers now offer trailing stop functionality in their trading platforms so you can automatically limit any losses.  Don't even worry about investing more than you can loose...just sleep tight and let the automatic trailing stop loss manage your worries.

 

Anyway here is an article I found that should at least get you interested:

 

Trade Thai Shares

[elgordo38]

Good article just reinforces my thinking. I came to Thailand to enjoy the few years I have left. To enjoy those few years I want to stay worry free thus I will "invest" in nothing here. "Investing" here is much different than investing in the West with different rules that frankly at times make no sense so again no sense to investment. There is truly little to "invest" in anywhere in the world besides money is becoming so debased so fast you better enjoy it while its still worth something. 

[Bulldozer Dawn]

On the other hand if you are a TV die hard doom and gloomer you could read up on how to short the Thai market and cash in when everything heads south:

 

How to Short Sell Thai Shares

[fletchsmile]

44 minutes ago, Bulldozer Dawn said:

On the other hand if you are a TV die hard doom and gloomer you could read up on how to short the Thai market and cash in when everything heads south:

 

How to Short Sell Thai Shares

 

The main problem with Thai single stock futures is liquidity. If you want to short the market generally SET50 futures are a much better choice in terms of liquidity. Personally I prefer SET50 options although again sometimes liquidity issues.

 

[amykat]

58 minutes ago, Bulldozer Dawn said:

Hilarious how investments threads on TV only refer to property and condos.  Demonstrates how unsophisticated the average TV poster is.

 

The Thai Stock Market is up 20 percent this year and is currently the strongest market in all of Asia.

 

You can trade the Thai market with a small amount of capital, the shares are held 100 percent in your name, you pay no tax on your profits, and Thai brokers now offer trailing stop functionality in their trading platforms so you can automatically limit any losses.  Don't even worry about investing more than you can loose...just sleep tight and let the automatic trailing stop loss manage your worries.

 

Anyway here is an article I found that should at least get you interested:

 

Trade Thai Shares

 

So Mr. Sophisticated Investor,

 

Do you really think it is a good idea to promote trading shares in general, shorting stocks, investing in a small emerging market to newbie, financially, unsophisticated people with their hard won retirement funds?  The fact that you have written this post proves that you are in fact, yourself, what you claim others in this forum seem to be.

 

This is not a forum for serious investing, therefore those of use who are interested in that probably go other places for that.

 

 

 

[Bulldozer Dawn]

7 minutes ago, fletchsmile said:

 

The main problem with Thai single stock futures is liquidity. If you want to short the market generally SET50 futures are a much better choice in terms of liquidity. Personally I prefer SET50 options although again sometimes liquidity issues.

 

 

Yes the guy who wrote the article agrees with you.  He talks about both Single Stock Futures and Thai warrants.  At the end of the article he provides a number of detailed reasons why he prefers to trade warrants.  Liquidity is cited as one of his main reasons. 

 

He wrote a good time ago about the Jas warrant (JAS-W3), which with the current takeover bid, is now up more than 1000%.

 

JAS warrant

 

As he notes in that article there is also a R version of the warrant (JAS-W3-R) which when executed entitles a foreigner to all benefits.

 

For those unfamiliar with R class Thai shares you can read about them here:

 

Different Types of Thai Shares