Put my savings to use

[sidgy]

Ok, I have just over 2 million baht in my Kasikorn bank. I also have 28000 sterling in my Uk natwest account. As I understand it, I can not invest on Uk markets as I am no longer tax resident , and I cannot invest on SET through Kasikorn. I believe I can invest through Kasikorn in Mutual funds. If this is the case,would it be beneficial for me to bring my money from the Uk to invest in mutual funds here? Also how easy/hard is it to get the money back out of funds if needed quickly i.e. For my annual visa 800000

I am a complete novice in all of this so any help/advice in this will be much appreciated

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[allane]

Before you invest in any mutual fund, acquaint yourself with the rules re withdrawal. I used to be invested in a Thai mutual fund company. I was able to do withdrawals with only 2 or 3 days notice. And I did not have a bank account at the bank to which they were affiliated. If I had had one, I think that would have been reduced to 1 to 2 days.

[55Jay]

A few questions first, then I'm sure someone more familiar with UK and SET will chime in.

 

Understand you are on the 800k money in the bank plan for visa extensions.

• Married, kids, mother in law, sick buffaloes, etc?
• Do you have a source of income for routine living expenses (pension, rentals, etc).
• ^ If so, any surplus from that or do you use it all every month?

Do you have insurance to cover catastrophic event - car/motorbike accident, medical problem, or are you counting on the liquidity of the 2 million and/or 28k pounds as self-insurance?

• For example, I keep about 2.5m in a Thai bank (presently @ 1.3p/a) for visa extensions and self insurance should life bowl me a googly.

What are your expectations and level of risk you are willing to take on?

 

Edited November 6, 2016 by 55Jay

[chiang mai]

You can invest in UK markets but you need an intermediary to do so, an onshore IFA who specializes in expat financial affairs will help no end. The UK FCA has a register of IFA's many of whom will be able and are willing to help expats in Thailand, the register can be found here but is down for maintenance as of the time of posting:  https://www.fca.org.uk/firms/financial-services-register

 

As for your Thai assets: I keep in excess of THB 5.5 mill. in Thai banks which acts as a currency hedge, it's value in GBP terms has increased 20% this year. So it's not necessarily about the percentage return on the funds under investment as it is the hedging aspect of THB.

Edited November 6, 2016 by chiang mai

[meatboy]

5 minutes ago, 55Jay said:

A few questions first, then I'm sure someone more familiar with UK and SET will chime in.

 

Understand you are on the 800k money in the bank plan for visa extensions.

• Married, kids, mother in law, sick buffaloes, etc?
• Do you have a source of income for routine living expenses (pension, rentals, etc).

Do you have insurance to cover catastrophic event - car/motorbike accident, medical problem, or are you counting on the liquidity of the 2 million and/or 28k pounds as self-insurance?

• For example, I keep about 2.5m in a Thai bank (presently @ 1.3p/a) for visa extensions and self insurance should life bowl me a googly.

What are your expectations and what level of risk you are willing to take on?

 

as above you need to look at what is what,3,2million wont get you far, unless you have an income,at todays interest around1.8%anually gets you less than 50,000bht.after tax. which you can claim back.

as jay say's gf.or wife,inlaws,extended family, then there is health and immigration, so better to do some homework before you start talking about investing,otherwise you will end up on the funny farm.

[sidgy]

Hi, first of all thank you both for taking the time to reply. I am married with children here. House and cars paid for, school fees paid for this year
The amounts mentioned are purely my savings, between my wife and myself we have around 1million baht for living expenses ... I am in the offshore drilling industry.. Currently unemployed.. I need only 6-8 weeks work per year to finance our living standards. Hopefully this is achievable even with current low oil price but if not we have the 1mill to see us through for approx 14 to 18 months. As you state the unforeseen can occur at anytime that is another reason I ask about getting money out



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[sidgy]

Hi CM, I wanted to avoid hie IFA route if possible as I have heard nothing but bad about them, as said I am completely novice to this and think the safety of a mutual fund through a bank is probably the way for me to start.
Hi Meatboy, I know this isn't a large amount and I don't intend to try to live of my investments, I am just trying to start of with this and try and add more investments over time as my work/ future earnings allow .
I just feel my savings can be put to better use than just sitting idle in the bank.
Thanks Sid



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[chiang mai]

I wouldn't be too quick to dismiss IFA's, the high levels of regulation in the UK means they are pretty safe and if you can find one you're happy with they can be a god send. I'm reasonably savvy in financial and economic terms but I'm also very risk averse, for that reason alone I always defer to my IFA for financial advice and I've never regretted doing so even once, on the contrary, he's been invaluable to me.

 

As far as getting money out is concerned: this aspect is overplayed to death on TVF, the facts are that if the money was legally imported into the country and  you have a Foreign Currency Exchange Transaction receipt (or similar) that can prove that, exporting that same money is very simple and easy.

[jpinx]

Depends on your connections in other countries, but 6% is available in some first world countries' finance houses, with non-resident tax-status taking only 2% tax.

[meatboy]

18 hours ago, sidgy said:

Hi CM, I wanted to avoid hie IFA route if possible as I have heard nothing but bad about them, as said I am completely novice to this and think the safety of a mutual fund through a bank is probably the way for me to start.
Hi Meatboy, I know this isn't a large amount and I don't intend to try to live of my investments, I am just trying to start of with this and try and add more investments over time as my work/ future earnings allow .
I just feel my savings can be put to better use than just sitting idle in the bank.
Thanks Sid



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thanks for your reply,myself i would consider the bigest risk i took 27yrs.ago when i married the wife,so i am not one to take risk's with any savings.do you need to look at if anything happened to you,how would the wife cope if she needed money urgently,if its tied up then there is a problem for her.myself i am at the age where money dosent come into it for me as long as the wife is well looked after.it can be a pain for wife's who have to do the running around for their husbands savings ect.even if you got a will its got to go to court.

interest rates are not that good the past 12months so you do need to shop around,thai seem to get the best deals exspecially on tax free savings.my moto has allways been DONT BE GREEDY plan what you need and let the rest work for you.

eg.open a fixed acc.which pays interest monthly,have that put into a tax free current acc.that also earns interest,if you dont touch it then it will soon mount up.time goes very quick here and so does money if your not carefull.so play safe and do your homework.

meatboy a cheap charlie taff.

[sidgy]

Again,thanks to all for taking time to assist me with your replies.
CM, sorry, I misunderstood,I was thinking of IFA's in Thailand. And the getting money back out is referring to 'out of the fund' rather than out of Thailand. This is my home and cannot envisage going back to the UK through choice.
After reading a lot of previous threads close to my subject question, many advise on investing with the same currency you will be spending in to avoid risk from currency fluctuations while some say invest in multiple currencies for the same reason. With my relatively small amounts,do you think I should pool all into one (i.e. Thailand) or invest in both the UK and Thai markets.
Also I think with my limited experience/knowledge putting into a mutual fund would be the best option for me.
Meatboy, I hear you, I'm in my late mid 40s with hopefully another 10-15 years of earning potential ahead of me. This plan is to get me started on the route of having/leaving something later in life for the family.



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[Gary A]

I am in basically the same situation. I had a disagreement with the firm that managed my US IRA. I liked the decent dividends but didn't like paying the fees and other crap that were involved. Rather than argue with them and getting worked up, I had them sell everything. The cash is now in my US bank insured money market that pays virtually nothing. The bulk of my savings earns nearly nothing but the money is there and I can put my hands on it anytime I want. That has to be worth something. I make an online wire transfer from my US bank whenever my Thai account gets lower than a million baht. Maybe I value peace of mind too much. Years ago I got caught in a stock market crash. I don't want to experience anything like that again.

[1FinickyOne]

9 minutes ago, Gary A said:

I am in basically the same situation. I had a disagreement with the firm that managed my US IRA. I liked the decent dividends but didn't like paying the fees and other crap that were involved. Rather than argue with them and getting worked up, I had them sell everything. The cash is now in my US bank insured money market that pays virtually nothing. The bulk of my savings earns nearly nothing but the money is there and I can put my hands on it anytime I want. That has to be worth something. I make an online wire transfer from my US bank whenever my Thai account gets lower than a million baht. Maybe I value peace of mind too much. Years ago I got caught in a stock market crash. I don't want to experience anything like that again.

 

not sure of your age, but the way to mitigate a market crash is to be invested long term, then you can survive many of them... just look at a long term chart of Dow or S&P - the other rule is to invest gradually to avoid a sudden drop and diversify.. but it is rarely for the faint of heart. 

 

Sidgy - read some books for beginner investors - at least have some knowledge of the risks/rewards of what you are getting into... 

[Gary A]

5 minutes ago, kenk24 said:

 

not sure of your age, but the way to mitigate a market crash is to be invested long term, then you can survive many of them... just look at a long term chart of Dow or S&P - the other rule is to invest gradually to avoid a sudden drop and diversify.. but it is rarely for the faint of heart. 

 

Sidgy - read some books for beginner investors - at least have some knowledge of the risks/rewards of what you are getting into... 

 

I'm 71 years old and am able to live here quite well on what I have. I'm not wealthy by any means but I am comfortable and my bank nest egg would pay for any health emergency I may have. With the astronomical national debt, I'm not at all sure the stock market would survive a major crash. My money in the bank may not even be totally safe. The government can only print so much funny money before the system implodes.

[1FinickyOne]

1 hour ago, Gary A said:

 

I'm 71 years old and am able to live here quite well on what I have. I'm not wealthy by any means but I am comfortable and my bank nest egg would pay for any health emergency I may have. With the astronomical national debt, I'm not at all sure the stock market would survive a major crash. My money in the bank may not even be totally safe. The government can only print so much funny money before the system implodes.

 

Yes, you looked a good bit older, hunched at the computer and the equation definitely changes as to what is wise for a youth and wise for us older fellows.. and at this age, comfort becomes paramount... 

 

As to the stock market not surviving a crash? Not exactly sure what you mean? Every major company goes bankrupt including utilities and food markets? But, if that happens, then it won't matter where you live or what you have, it will be anarchy... now we just have mean-archy... evolved from me-archy.

 

But, yes, it is impossible to protect yourself from all possibilities in finance and life... be well. 

[Oxx]

You have two obvious choices:

 

(1) Open an offshore brokerage account which will allow you to buy/sell shares/ETFs in major world markets, including the UK, and invest in a broad range of mutual funds.  I generally recommend TD International in Luxembourg for this.

 

(2) Open a brokerage account in Thailand and invest in Thai mutual funds.  Personally I don't find Thai funds particularly attractive.  However, I do have an account with the asset management arm of TMB.  No need to have a TMB bank account to open or manage the account.  You can link the brokerage account to most (if not all) Thai bank accounts.  My TMBAM account is linked to my Krung Sri and Bangkok Bank accounts.

 

Absolutely no problem investing in UK shares or mutual funds when not resident.  However, you'll find it nigh on impossible to find a UK IFA to take you on as a client (if that's the route you want to go down, but with your relatively small amount to invest it's probably not worth using an IFA), and nigh on impossible to open an account.  Hence the need to think outside the UK.

 

I get the impression you need to think more about (a) what the future holds for you (particularly,  are you going to spend the rest of your life based around Thailand, in which case investing in Thailand and in Thai baht makes sense, if not, then better to invest elsewhere), and (b) what exactly do you want to invest in? A lot of asset classes are simply not available for investing in within Thailand.

[Gary A]

I intend to live out the rest of my life in Thailand if at all possible. Meaning that unless the Thai government makes it impossible for me to stay, I'll be staying here. As of about an hour ago, I wired a million baht from my US bank. Having that extra money in my Thai bank account makes me feel a little more secure. Kind of like being more diversified in the stock market. 

[Oxx]

1 hour ago, Gary A said:

I intend to live out the rest of my life in Thailand if at all possible. Meaning that unless the Thai government makes it impossible for me to stay, I'll be staying here. As of about an hour ago, I wired a million baht from my US bank. Having that extra money in my Thai bank account makes me feel a little more secure. Kind of like being more diversified in the stock market. 

 

Having assets in THB makes sense for someone with your aspirations.  However, be aware that cash is very different from the stock market.  Holding a lot of cash (and, to be blunt, you've been holding crazy amounts of it) is not a good idea for the simple reason that the returns on cash rarely match inflation, so you're simply holding on to an asset that is eroding in value.

 

On the positive side, by holding THB cash, you're not exposed to FX rate fluctuations.

 

You really need to think first about what you expect from your investments (capital growth, income, or both), your attitude to volatility (very volatile investments can provide a stomach churning ride, with peaks and troughs, but they generally provider higher returns in the longer term), and then precisely which asset classes you wish to invest in.

 

Incidentally, going back to your original post, any investment in funds or shares should be a medium to long term thing (minimum 5 years' time horizon).  Putting your 800,000 baht into funds in the expectation of cashing out the same year is utterly wrong.  Always keep the 800,000 plus 3-6 months' living expenses (or longer) in cash.  Only invest your spare cash above that amount.  Remember that investments can be very volatile, and if your 800,000 halved in value you might be facing difficulties.

[sidgy]

Hi Oxx. Thankyou for your input, that is the sort of info I was requiring with the OP. Yes I intend to stay in Thailand for the long term. I think all things considered,with my experience(lack of) the option 2 you gave (Thai mutual funds) is the way for me to go.
After searching more,I think I will start with an initial investment of around 2mill thb and add to it each year thereafter.. Funds permitting. Any thoughts you have would be welcomed
Thanks Sid


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[Oxx]

Sid, what is your attitude to risk? If you saw your investments fall in value, say 30%, would you be unable to sleep?

 

Just an initial suggestion would be to invest as follows.  (All the funds are from TMBAM since I very much like their Property Income Plus fund which is pretty much unique as far as I can tell.  To be honest, it's the only Thai fund I hold.  It's the only Thai fund that really floats my boat.  The rest of my investments are offshore.)

 

25% Property Income Plus - steady income of around 5% (which can - and probably should -  be reinvested)

25% SET 50 fund - core exposure to the SET

25% Global Quality Growth - broad global exposure, though with quite a heavy bias towards the US which I'm not so keen on

25% Ultra Short Bond Fund - conservative investment, but with slightly better returns than bank deposits.  Lower risk of fall in values should interest rates rise than conventional bond funds

 

Don't take the above as a recommendation, but rather a starting point.  And also consider your tax situation.  LTFs and RMFs provide very generous tax benefits for Thai tax payers.  (That's payers of Thai income tax, not Thai people paying tax.)

 

Anyway, if you haven't gathered already, diversification across asset classes is important.  Nobody is smart enough consistently to pick the next winning sector.  As they say "don't put all your eggs in one basket".

[sidgy]

Hi Oxx, obviously a 30% drop is not the desired goal,but no it won't break me. The money stated in OP is my idle savings, ( I have other funds) that I thought I would put to use for my retirement/children.... Have to start somewhere right ..
I think what you have suggested is the type of thing I am looking for, and hopefully when the Offshore Oil industry picks up again I will have surplus incomes to add to the initial investment each year.
Once again , thank you very much for your time and input


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[jpinx]

For someone staying for life and wanting to provide for family when he passes, the option to get a business going is valid too.

[sidgy]

Jpinx, thank you for your reply. Business not really suitable for me... I spend over six months a year away, my wife busy with two small children and not really comfortable trusting anyone else to run it for me


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[jpinx]

On 08/11/2016 at 4:10 AM, sidgy said:

Jpinx, thank you for your reply. Business not really suitable for me... I spend over six months a year away, my wife busy with two small children and not really comfortable trusting anyone else to run it for me


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Very valid reasoning -- I'm glad you thought it all through.  If you have any kinds of contacts in NZ you can do well there with term deposits

[chicowoodduck]

I think the best idea is to follow just a few simple rules....1. Never seek advice from any TV member.....a crap shoot at best. 2.  I only pretend to be a TV member, seek professional help and not from the Internet.....?

[steve73]

Have you tried opening a UK on-line dealing account?  You might need to live there (or at least provide a UK address) to get started, but you should be able to then change it to a Thai address (if you really need to) at a later date.

I 'd held an i-dealing account for a couple of years in the UK before moving here in 2007 and they were quite happy to register my Thai address. Only problem is that as I'm now non UK resident I cannot add to my ISA, but there's no restrictions trading within it, and no problems adding to my standard trading account.

[Oxx]

8 minutes ago, steve73 said:

Have you tried opening a UK on-line dealing account? 

 

With the possible sole exception of Barclays, it is no longer possible for a non-resident to open a UK brokerage account without going through an IFA.  (That is, unless you lie about your residency.)

 

Anyway, there is no benefit for a non-resident in opening a UK account.  Interest will be subject to UK withholding taxes.  And the account will (if not non-UK domiciled) form part of your estate for inheritance tax purposes.

[Generalchaos]

If you have a UK Bank account, why not just use that to link to something like TD Waterhouse? You can invest all you like in the UK, USA Canada and some European markets.

All dividends / interest on savings from TD are Gross too!

[Bannoi]

Plenty of Go-Go's and bars in Pattaya up for sale with accommodation and perks

 

Downside is you would probably lose the lot in 6 months  

[bridge2bridge]

Just give it to the first Thai bird you see.

she will probably take you for it anyhow.