Savings Needed For My Lifestyle

[Bruce1]

Aussie Federal Reserve and govt. run economic policy to keep Aussie $ below about 80cents US. But $US keep falling againdst other currencies, making that harder to do. Aussie economy shifting towards markets in China, India etc in face of American import barriers so American $ will become less important to Aussie economy I guess. Aust is happily schizonphrenic, being culturally aligned with America and England, although Asian links growing, but economyically increasingly aligned to Asia. We Aussies have a long history of pragmatism and shifting to whoever will keep us wealthy. Everytime I go hopme Oz I'm reminded of how rich we've become, by world standards. I read somewhere we slipped to about 15th or so in the 1980s, but are now back up in the top 10 (eighth?), although I question the criteria for measuring that. Anyway, enough of this rave, must go review some exam papers...

[ArranP]

Hi SiamA,

I'm in a similar position myself, I work in the UK IT industry as a SAP Basis Contractor, I'm currently 35 years old and set to retire to thailand around november time this year.

I won't say how much my personal wealth is because I had my fingers burn't on this forum before from none believers stating I'm only claiming I have this wealth, I guess thats goes with this territory.

I've invested in UK property, here I get an average 5% return a year in rent on property value, plus I get a capital gain as the property value increases.

Property prices like equities will rise over the long term, however with property my investment is leveraged by the banks, my exposure to the market is increased, thus the gain (over the long term) is greater than with equity indexes, and will outstrip inflation.

Regards

Arran.

[Khun ?]

ArranP

Smart move taking care of your home base before getting stuck on a one way street in a foreign country. Siamamerican is very close to getting on top of the hill looking down. Too many get half

way up and give up to soon. Best to put yourself in a position you do not need to spend your savings and let it work in a safe way to provide for your needs. As his needs will be less than

if he was living in the west, he'll only need to climb a smaller hill to get same rewards providing

Thailand ends up being the home, for ever, he thinks it will be.

I said same a couple years back when I hit a certain amount I would walk away from the working life.

Glad I didn't as it would of put me at just an average retirement back home and not as an easy time investing also. The couple more years has returned great results. In the next 2 years with just a 5% return on investment and

saving from my work, I'll be able to put my savings in CD's and live fine anywhere and still have

money left over. It happens really fast once you pass the $500K to 700K mark or at least it did for me. I guess the 15 to 20% returns the market has given the last couple years did not hurt either. I hate the place I am living but like the work and that is life all over the world. I'll have plenty of first class years to reward myself with soon enough.

[siamamerican]

Hi SiamA,

I'm in a similar position myself, I work in the UK IT industry as a SAP Basis Contractor, I'm currently 35 years old and set to retire to thailand around november time this year.

I won't say how much my personal wealth is because I had my fingers burn't on this forum before from none believers stating I'm only claiming I have this wealth, I guess thats goes with this territory.

I've invested in UK property, here I get an average 5% return a year in rent on property value, plus I get a capital gain as the property value increases.

Property prices like equities will rise over the long term, however with property my investment is leveraged by the banks, my exposure to the market is increased, thus the gain (over the long term) is greater than with equity indexes, and will outstrip inflation.

Regards

Arran.

I wish I was in your shoes at 35 years old. I was flat broke and looking for work. Good luck and think we will both be happy with our decision. I just signed a retention contract on Friday that pays out after 2007, so I'm here for 1 more year. The last few years have been enjoyable and the next should be too.

Many people have advised me to work another few years and save. I wonder how happy those people are currently, assuming they took there own advise and worked those extra years. I've never let money solely direct my life and it has been great so far(minus cleaning pools). I hitchhiked the continent in my twenties, did it by car in my late twenties and traveled the globe for 4 years in my thirties. I've had my share of luck, but I think I made some of my own.

Edited January 7, 2007 by siamamerican

[besth]

You've got a nice nest egg, but 8% return on investments over 35 years is optimistic. 7.5% is far more likely. Similarly, 3.1% for inflation is way too low - 5% is far more realistic.

Why???

I would say 35 years is far too long for any kind of economic predictions but, if you pinpoint small differences like those, it would be nice to know what you know now and we don't, if you care to share.

[ArranP]

Hi SiamA,

I'm in a similar position myself, I work in the UK IT industry as a SAP Basis Contractor, I'm currently 35 years old and set to retire to thailand around november time this year.

I won't say how much my personal wealth is because I had my fingers burn't on this forum before from none believers stating I'm only claiming I have this wealth, I guess thats goes with this territory.

I've invested in UK property, here I get an average 5% return a year in rent on property value, plus I get a capital gain as the property value increases.

Property prices like equities will rise over the long term, however with property my investment is leveraged by the banks, my exposure to the market is increased, thus the gain (over the long term) is greater than with equity indexes, and will outstrip inflation.

Regards

Arran.

I wish I was in your shoes at 35 years old. I was flat broke and looking for work. Good luck and think we will both be happy with our decision. I just signed a retention contract on Friday that pays out after 2007, so I'm here for 1 more year. The last few years have been enjoyable and the next should be too.

Many people have advised me to work another few years and save. I wonder how happy those people are currently, assuming they took there own advise and worked those extra years. I've never let money solely direct my life and it has been great so far(minus cleaning pools). I hitchhiked the continent in my twenties, did it by car in my late twenties and traveled the globe for 4 years in my thirties. I've had my share of luck, but I think I made some of my own.

Hi Siam

Yes, we are doing alot better than alot of people, its a good position to be in but please take care to take care and factor in inflation, thailand is not far away only months....

Regards

Arran.

[jackr]

Any update on your situation, siam? Hope all is well

[siamamerican]

Any update on your situation, siam? Hope all is well

All is well - thanks for asking. Signed a retention contract that pays out 2/1/08. My plan is to move to Thailand soon after the end of the contract. The contract includes a substantial bonus if certain revenue #s are achieved and the extra cash would make the move easier. The revenue # is based on all business units and the other units are struggling except for mine, but things are picking up. Regardless if the # is hit or not, I feel I owe the company another 8 months. The company I work for has enabled me to save more money in a just a few short years than I ever anticipated, but I'm aching to make the move to Thailand.

[lordofdelusion]

First off, good luck. I understand the draw to leave the US for Thailand. I made the move at 50 last July. If I might make a few points based on my recent experience.

First, you mentioned 15 million baht. With todays exchange rate that's about $433,000. I've watched my Baht slip away this year too.

For fun, there is a calculator at bankrate.com. It lets you put in the amount you have, a projected return, your expenses, and will calculate how many years your funds will last. You can play with that and try out different scenarios.

Somebody mentioned the Vanguard group. I have had lots of luck with them and can reccommend them highly. A lot of very low cost funds and ETF's.

Dr. Naam I believe mentioned moving your money offshore. I am working with an international financial advisor now for the purpose of doing just that. But, let me warn you, it is difficult to move money out of the US. A host of regulations wrapped in an anti-terrorist package makes it difficult. It appears the regulations were more for the benefit of the IRS so I use the term "wrapped in an anti- terrorist package." It would be helpful for you to set up with your bank before you leave, a way to wire transfer money to a foreign bank with a phone call or fax. In order to invest offshore it will be neccessary for you to prove residence outside of the US. Utility bills, a Thai driving license with your address or such is a must. Current US residents cannot move their money to the Isle of Man for instance. If you return to the US, you cannot make any further deposits into the account. I guess my point is it has been more challanging than I thought to get sorted here. I would reccomend professional advice, either through Vanguard, an international investment advisor here, there are many firms, but not anyone sitting on a bar stool! Your savings are too important.

But that aside, I'm having fun with my Thai wife and I enjoy many things here. Again, good luck.

[Firefan]

If one has about US$500k and need $1700/mth(Baht 60k) both in todays USD/Baht - I would say that one is set for life if invested in a globally and asset class wise well diversified, low cost, portfolio.

Siamamerican has a loooong time horizon so should naturally be willing to tighten the belt when the markets are going against him, which it will in shorter or loner periods.

I generally recommend to my friends askingfor advise that they make 2-3 budgets:

1. Base budget - covering the bills, groceries, medical Etc.

2. Good lifestyle; adding travel, nicer transport(own car/bike) Etc.

3. Happy days budget - all the gravy one might want to add

The safe/boring part of ones portfolio; interest from cash/time deposits/CDs/maybe dividends should cover budget no. 1. One can the switch between budgets depending on the development of the nest egg. In bad times one does not have to sell anything as the base budget is covered no matter what.

Cheers!

[siamamerican]

If one has about US$500k and need $1700/mth(Baht 60k) both in todays USD/Baht - I would say that one is set for life if invested in a globally and asset class wise well diversified, low cost, portfolio.

Siamamerican has a loooong time horizon so should naturally be willing to tighten the belt when the markets are going against him, which it will in shorter or loner periods.

I generally recommend to my friends askingfor advise that they make 2-3 budgets:

1. Base budget - covering the bills, groceries, medical Etc.

2. Good lifestyle; adding travel, nicer transport(own car/bike) Etc.

3. Happy days budget - all the gravy one might want to add

The safe/boring part of ones portfolio; interest from cash/time deposits/CDs/maybe dividends should cover budget no. 1. One can the switch between budgets depending on the development of the nest egg. In bad times one does not have to sell anything as the base budget is covered no matter what.

Cheers!

Good advice! Below is a budget I put together about six months ago. I didn't include the details, because I was unable to past copy the spreadsheet. The budget varied depending on where I lived(northern Thailand, Bangkok...). Sorry, it's in US dollars.

I should have around $400,000 in savings when I make the move. At an 8% return rate, in 20 years I would have roughly $700,000 in todays dollars(3.1% inflation). At a 4% return, I would stil have $310,000. These numbers are after taking out cost of living.

In reality, if my savings reached $500,000, I would most likely not work as much and my income would drop. In my later years, I would also be receiving social security benefits.

Budget: $1110

Income(wife & I): $775

Net: -$335

Average Lifestyle: $1400

Income(wife & I): $975

Net: -$425

Abvove average: $2000

Income(wife & I): $1200

Net: -$800

Edited May 11, 2007 by siamamerican

[PeaceBlondie]

Okay, so 7.5% compounded over 35 years wouldn't quite reflect a major stock market index such as the DJIA of 20 industrial stocks, or the S&P 500 index. However, neither would 8%. It's 7.78%.

Inflation? Nobody knows the true inflation rates because governments such as the USA intentionally understate them. I remember 2% and 14%. I think 3.2% is too high, and 5% is closer. Let's make a conservative estimate that the cost of living increase will be 4.8%, and the stock market will return 7.8%. That's an effective increase, net, of only 3% in real money adjusted for inflation.

If you save 6,000 (in any unit of currency) per year for 35 years at a net increase of 3%, you would then have a nest egg of 362,772.

Can you retire 35 years from now on 362,772 simoleans? Then invest 6000 simoleans every year for 35 years.

If you can make 5% difference on your investments, compared to price increases, you can retire with 541,921 simoleans.

But it's worse than crystal ball gazing to predict 35 years into the future. Japan may be under water, the folks at Microsoft may have invented shannnadaggga by then, etc.

[Firefan]

Peaceblonde; you obviously have the understanding needed to do these nos. Meanwhile we both agree that it is anyway just "mathematical exercises" not really worth much. In reality Siamamerican will simply have to adjust spending (between base budget in "bad" times, towards luxury budget in "good" times) as needed in the long period ahead.

The most important thing is that there is enough flexibility to do so. As Siamamerican and his wife are even willing to work in "retirement' there is a lot of flexibility there too. Based on the info we have been given I do not see any problem with Siamamerican's plan.

Personally I would increase non-US exposure, and I would not bet on 8.5% as a constant (presume he would add bonds of some kind lowering the overall expected average?).

Cheers!

[traveldog]

Well lots of interesting advice/opinions etc. I think Siam has good prospects and level headed thinking....I came to Thailand (at 48years old) leaving high paying job in exchange for low stress and more happiness. Most of my friends back home were incredulous and feared for my sanity(oh well).....Have similar savings as SA and have seen nest egg grow by living off my very modest teaching salary. I live modestly but comfortably...do lots of domestic holiday travel and some internat. travel as well. Get good insurance...had two hospitalizations in last two years and was fully reimbursed through AIA....as you get older the hospital is more or less inevitable.

Anyway....quality of life was my major decision maker and I haven't regretted my move after 4 plus years....in fact wish I had come sooner! I wish Siam American all the best and admire his courage.....

[Naam]

First off, good luck. I understand the draw to leave the US for Thailand. I made the move at 50 last July. If I might make a few points based on my recent experience.

First, you mentioned 15 million baht. With todays exchange rate that's about $433,000. I've watched my Baht slip away this year too.

For fun, there is a calculator at bankrate.com. It lets you put in the amount you have, a projected return, your expenses, and will calculate how many years your funds will last. You can play with that and try out different scenarios.

Somebody mentioned the Vanguard group. I have had lots of luck with them and can reccommend them highly. A lot of very low cost funds and ETF's.

Dr. Naam I believe mentioned moving your money offshore. I am working with an international financial advisor now for the purpose of doing just that. But, let me warn you, it is difficult to move money out of the US. A host of regulations wrapped in an anti-terrorist package makes it difficult. It appears the regulations were more for the benefit of the IRS so I use the term "wrapped in an anti- terrorist package." It would be helpful for you to set up with your bank before you leave, a way to wire transfer money to a foreign bank with a phone call or fax. In order to invest offshore it will be neccessary for you to prove residence outside of the US. Utility bills, a Thai driving license with your address or such is a must. Current US residents cannot move their money to the Isle of Man for instance. If you return to the US, you cannot make any further deposits into the account. I guess my point is it has been more challanging than I thought to get sorted here. I would reccomend professional advice, either through Vanguard, an international investment advisor here, there are many firms, but not anyone sitting on a bar stool! Your savings are too important.

But that aside, I'm having fun with my Thai wife and I enjoy many things here. Again, good luck.

i am well aware of these facts Lord and the problems you mentioned are not limited to the U.S. and its IRS but have surfaced in Europe too. however, it it neither illegal nor impossible to move your money/holdings out of any country except when currency restrictions apply and this goes for U.S. citizens too. nobody can force a U.S. citizen NOT to liquidate his/her holdings and (e.g.) buy a home abroad, spending the money in casinos or buying precious stones for ladies.

two of my american friends moved their holdings out of the U.S. without any problems. one left back those investments which were tax-deferred (401k, etc.) because of the progressive amount of tax due. the other one bit the bullet, paid his taxes and liquidated all his assets. of course both of them have to file an annual tax return as long as they don't renounce their U.S. citizenship.

although i am not a U.S. citizen i was for a number of years a "U.S. person" and paid my dues to the IRS. never "imported" any of my holdings into the U.S. because i don't like any laws telling me in which assets i can invest.

In order to invest offshore it will be neccessary for you to prove residence outside of the US. Utility bills, a Thai driving license with your address or such is a must.

neither was requested by any U.S. authorities but all "proper" banks worldwide do request that you prove your residence, generally done by presenting a utility bill but that only once only opening an account. additional clear proof like residence permits or driver's license are not required.

edited for grammar

Edited May 11, 2007 by Dr. Naam

[Naam]

addendum to previous post:

a number of international banks with subsidiaries in the U.S. only hesitantly accept U.S. citizens or U.S. persons. the reason for their reluctance is that their subsidiaries could come under pressure respectively pure black mail when refusing to submit details of their client's holdings. acceptance is in most of the cases only granted when the potential client signs a bunch of indemnity documents releasing the bank from all kind of responsibilities especially banking secrecy. an extremely unfair practice but the banks just want to cover their butts.

[solo siam]

A 35 year plan to move to Thailand seems a bit extreme to me, who knows what its going to be like here then. What if you will save up for your 35 years, come over here and drop off dead within the week?

Seriously, 35 years is longer than I've even been alive, there has to be a better way to do it.

Why not just save a little more, come out here for 6 months and see what happens?

[lordofdelusion]

addendum to previous post:

a number of international banks with subsidiaries in the U.S. only hesitantly accept U.S. citizens or U.S. persons. the reason for their reluctance is that their subsidiaries could come under pressure respectively pure black mail when refusing to submit details of their client's holdings. acceptance is in most of the cases only granted when the potential client signs a bunch of indemnity documents releasing the bank from all kind of responsibilities especially banking secrecy. an extremely unfair practice but the banks just want to cover their butts.

Like I said, it has proved challenging.

HSBC in Singapore requested utility bills and my Thai driving license.

Liquidating assests in the US can leave you open to tax liability as well as Dr. Naam pointed out.

I would be interested in any long termers experience with offshore investment. Any stories to share???

[siamamerican]

A 35 year plan to move to Thailand seems a bit extreme to me, who knows what its going to be like here then. What if you will save up for your 35 years, come over here and drop off dead within the week?

Seriously, 35 years is longer than I've even been alive, there has to be a better way to do it.

Why not just save a little more, come out here for 6 months and see what happens?

I don't plan on moving to Thailand in 35 years. My plans are to make the move next year. The 35 year plan your referring to is for the years following my move.

I agree, working another 35 years saving for my retirement would be extreme. I definitely would have a secure retirement if I was still around to enjoy it.

I don't know your age, but I lived in Thailand for a few years in my early thirties. It was the best years of my life, but I came to the conclusion it was to risky to stay permanently. I feared the possibility of being past my prime professionally and not having any real savings.

To each his own - I'm comfortable with my current savings and shortly will be making the move. Some posts think I still have too little and others think I have more than enough.

I think the key is to do what you enjoy, but have some foresight.

[siamamerican]

Okay, so 7.5% compounded over 35 years wouldn't quite reflect a major stock market index such as the DJIA of 20 industrial stocks, or the S&P 500 index. However, neither would 8%. It's 7.78%.

Inflation? Nobody knows the true inflation rates because governments such as the USA intentionally understate them. I remember 2% and 14%. I think 3.2% is too high, and 5% is closer. Let's make a conservative estimate that the cost of living increase will be 4.8%, and the stock market will return 7.8%. That's an effective increase, net, of only 3% in real money adjusted for inflation.

If you save 6,000 (in any unit of currency) per year for 35 years at a net increase of 3%, you would then have a nest egg of 362,772.

Can you retire 35 years from now on 362,772 simoleans? Then invest 6000 simoleans every year for 35 years.

If you can make 5% difference on your investments, compared to price increases, you can retire with 541,921 simoleans.

But it's worse than crystal ball gazing to predict 35 years into the future. Japan may be under water, the folks at Microsoft may have invented shannnadaggga by then, etc.

Your numbers are flawed. What year or years did the DJIA or S&P return 7.8%? Did you include dividends? You can't analyze returns without including dividends. Below are actual S&P returns during the specified periods with reinvesting dividends. There are many on-line sources where the numbers can be verified.

Last 30 years ending 12/2005: 12.73%(9.15% without dividends )

1970s: 5.86%

1980s: 17.55%

1990s: 18.20%

1st 3 yrs of this decade: negative 14.55%

2006: 15.79%

7.8% isn't an accurate reflection of the S&P performance. You can even go back to 1926 and the average annual return is 10.4%.

I can only guess you didn't consider dividends or you selectively picked a period of time where the returns equaled 7.8%.

As for your inflation number, what is basis of your number? You just claim the US number as inaccurate ( it could be - I don't know). As for me, I feel more comfortable basing future inflation off of the US CPI index(my returns are in dollars), not your number. Below are some CPI inflation numbers.

1926 - 2000: 4.03%

Last 10 yrs: 3.02%

Last 2 yrs: 2.95%

In the end, I do agree with Firefan's comment, "it is just a mathematical exercise, not really worth much". In the end, you need to be able to adjust your lifestyle if your investments go south.

[solo siam]

A 35 year plan to move to Thailand seems a bit extreme to me, who knows what its going to be like here then. What if you will save up for your 35 years, come over here and drop off dead within the week?

Seriously, 35 years is longer than I've even been alive, there has to be a better way to do it.

Why not just save a little more, come out here for 6 months and see what happens?

I don't plan on moving to Thailand in 35 years. My plans are to make the move next year. The 35 year plan your referring to is for the years following my move.

I agree, working another 35 years saving for my retirement would be extreme. I definitely would have a secure retirement if I was still around to enjoy it.

I don't know your age, but I lived in Thailand for a few years in my early thirties. It was the best years of my life, but I came to the conclusion it was to risky to stay permanently. I feared the possibility of being past my prime professionally and not having any real savings.

To each his own - I'm comfortable with my current savings and shortly will be making the move. Some posts think I still have too little and others think I have more than enough.

I think the key is to do what you enjoy, but have some foresight.

I'm 31 and been here for 5 years and yes its been a blast.

Your plan sounds very doable to myself, Additional to your plan and with the knowledge in your industry I would also suggest seeing if it was a possibility to do something online, based in your own country but run from here. Perhaps an online mortgage portal or similar, it would be an additional backup and possible income stream and only takes time and next to no money to set-up.

Also personally, and I will get someone jumping down my throat for this I'm sure - I would work an extra 6-8 months and use that money to build a house here, you could buy the land in the wifes name (get her to lease it for 30 years to you if you needed to) and build the house (which you can own) for around 2.5 million baht (for a nice place) and that would mean you aren't at the mercy of rises in rent.

[jrbkk64]

A 35 year plan to move to Thailand seems a bit extreme to me, who knows what its going to be like here then. What if you will save up for your 35 years, come over here and drop off dead within the week?

Seriously, 35 years is longer than I've even been alive, there has to be a better way to do it.

Why not just save a little more, come out here for 6 months and see what happens?

I don't plan on moving to Thailand in 35 years. My plans are to make the move next year. The 35 year plan your referring to is for the years following my move.

I agree, working another 35 years saving for my retirement would be extreme. I definitely would have a secure retirement if I was still around to enjoy it.

I don't know your age, but I lived in Thailand for a few years in my early thirties. It was the best years of my life, but I came to the conclusion it was to risky to stay permanently. I feared the possibility of being past my prime professionally and not having any real savings.

To each his own - I'm comfortable with my current savings and shortly will be making the move. Some posts think I still have too little and others think I have more than enough.

I think the key is to do what you enjoy, but have some foresight.

earlier someone suggested starting your own business. I invested 45k THB(inventory and rights to the rental contract) in a very small (15sqm) rented space outside a convenience store with a lot of traffic, rent 4,500/month.

My GF and her brother in law sell cheap beachware from the space which is located very near the beach. The GF does most of the purchasing in BKK and sends it on the bus to the shop. The brother in law runs the shop. They average a net profit of more than 1,000/day. The deal was that I would get 10% of net profit to pay off my investment. Start was December 2005 and I was paid back in full 12 months later incl. 10% interest. It provides both my GF and her immediate family with an income source sufficient for their needs. They have even expanded/upgraded their house upcountry with another two bedrooms, new kitchen, bathrooms etc with money earned from the shop. ( and now are ofcourse thinking/dreaming about a car!!??!!)

The point I am trying to make is that for very little money/investment and with almost no risk, it is fairly easy to have an income greater than that of the average english teacher. I am seriously considering setting up a business myself here. What kept me from doing it sofar is that I am much too comfortable with my "rat race" job and income here in Thailand and abroad.

Siam American: I would say go for it ASAP, but instead of getting into english teaching, I would start a small business and take it from there. Good luck.

[siamamerican]

Well lots of interesting advice/opinions etc. I think Siam has good prospects and level headed thinking....I came to Thailand (at 48years old) leaving high paying job in exchange for low stress and more happiness. Most of my friends back home were incredulous and feared for my sanity(oh well).....Have similar savings as SA and have seen nest egg grow by living off my very modest teaching salary. I live modestly but comfortably...do lots of domestic holiday travel and some internat. travel as well. Get good insurance...had two hospitalizations in last two years and was fully reimbursed through AIA....as you get older the hospital is more or less inevitable.

Anyway....quality of life was my major decision maker and I haven't regretted my move after 4 plus years....in fact wish I had come sooner! I wish Siam American all the best and admire his courage.....

Happy to hear you are enjoying yourself. Money is nice to have, but I'll take take doing what makes you happy over dying with millions in the bank.

As for insurance, I learned during my last stay in Thailand that it is a necessity. In your opinion, what would it cost per year for a good policy?

After living in Thailand for 4 years, do your friends still question your sanity? My friends and family view my plans a little differently. They are happy I didn't make the move a couple years ago, but now that I have a decent nest egg, completely support my decision.

[Bruce1]

Doesn't your job include health insurance? Many do.

[youngkiwi]

Firstly, good on your siamamerican. As you're looking to contribute growth to your investments, certainly holding growth stocks over the long term is an excellent strategy.

I disagee with some other earlier posters regarding putting your funds into balanced, diversified stocks at this time. In most cases, they achieve lack-lustre performance compared to growth stocks. While they don't have the same risk, due to your age and long investment timeframe, having funds in growth stocks is a sure way to grow your investments. As you get older and cannot assume the same element of risk, it would then be wise to move an good proportion of those funds into either a balanced portfolio, or invest in other asset classes such as property.

I myself am 29 years old and have been living in Thailand for 9 years, with very frequent travel allowing me to return home for a few weeks every two months. While I have business interests at home, I am able to live more than comfortably in Thailand from existing income brought in from overseas.

Similar to yourself, I have a well structured investment plan which includes a number of active managed funds which have achieved excellent performance over the recent years. While historical performance is no indication of future performance, one of the managed funds I invested in achieved 49% return over the past year, and while I do not expect this to continue, performance since inception of the fund (10 years) has been 19% - still resulting in excellent performance. I do think it is important that those of us who are younger and can afford more risks with a longer investment timeframe should invest more in growth stocks while we can take those risks, and while we are still earning good incomes. I have a number of rental properties back home rented to international students which have also proved to be an excellent cash cow. While the capital growth on those properties has not been huge (apartments), the rent has been a worthwhile supplement which I have been channeling back into growth investments for the long haul.

[Firefan]

Youngkiwi; I do as such not disagree that Siamamerican can be in growth stocks - but he should ALSO be in value, small caps, international, reits, commodities and even bonds in Siamamericans case.

Focusing on the growth/value discussion first: Growth stocks have not done better than value stocks in the long run - average returns are about the same - so why not reduce volatility by holding BOTH growth and value? And in all sizes and geographical(giving added currency diversification) areas too.

Adding OTHER asset classes like reits, commodities Etc. having equity like (historical) returns also makes good sense - again; giving less overall portfolio volatility and re-balancing bonus.

Finally; your situation is NOT the same as Siamamerican's. He NEEDS some income from his nest egg as he is sick of the "hamster-wheel"-work style, and have reached a nest egg already having the potential to cover all his needs. I.e. I fully agree that you can take on much more risk - being willing to work the big job for much longer - and in fact; a big drop (say 50%) in overall stock prices would be GOOD for you as you can buy "on sale", while Siamamerican would not have the new capital to buy "on sale".

THis is why for HIM it might make sense to have a part on bonds/fixed income/CDs paying enough to cover all base-budget costs. For YOU that would not make much sense, except maybe 10% or so for re-balancing bonus.

Cheers!

[sukanyacondo]

A 35 year plan to move to Thailand seems a bit extreme to me, who knows what its going to be like here then. What if you will save up for your 35 years, come over here and drop off dead within the week?

Seriously, 35 years is longer than I've even been alive, there has to be a better way to do it.

Why not just save a little more, come out here for 6 months and see what happens?

I don't plan on moving to Thailand in 35 years. My plans are to make the move next year. The 35 year plan your referring to is for the years following my move.

I agree, working another 35 years saving for my retirement would be extreme. I definitely would have a secure retirement if I was still around to enjoy it.

I don't know your age, but I lived in Thailand for a few years in my early thirties. It was the best years of my life, but I came to the conclusion it was to risky to stay permanently. I feared the possibility of being past my prime professionally and not having any real savings.

To each his own - I'm comfortable with my current savings and shortly will be making the move. Some posts think I still have too little and others think I have more than enough.

I think the key is to do what you enjoy, but have some foresight.

earlier someone suggested starting your own business. I invested 45k THB(inventory and rights to the rental contract) in a very small (15sqm) rented space outside a convenience store with a lot of traffic, rent 4,500/month.

My GF and her brother in law sell cheap beachware from the space which is located very near the beach. The GF does most of the purchasing in BKK and sends it on the bus to the shop. The brother in law runs the shop. They average a net profit of more than 1,000/day. The deal was that I would get 10% of net profit to pay off my investment. Start was December 2005 and I was paid back in full 12 months later incl. 10% interest. It provides both my GF and her immediate family with an income source sufficient for their needs. They have even expanded/upgraded their house upcountry with another two bedrooms, new kitchen, bathrooms etc with money earned from the shop. ( and now are ofcourse thinking/dreaming about a car!!??!!)

The point I am trying to make is that for very little money/investment and with almost no risk, it is fairly easy to have an income greater than that of the average english teacher. I am seriously considering setting up a business myself here. What kept me from doing it sofar is that I am much too comfortable with my "rat race" job and income here in Thailand and abroad.

Siam American: I would say go for it ASAP, but instead of getting into english teaching, I would start a small business and take it from there. Good luck.

I think the key thing here is you have found people you can trust and there are more of them out there, good for you, and nice to hear something not about being ripped off stitched up or fleeced for once.

[traveldog]

SiamA, ummm yeah after 4+ years I haven't actually asked what they think now about giving up the so called "good job", securtiy etc for here. My former boss and good friend was sure I would come back after a few years-he is fairly miserable in his work/lifestyle(hamsterwheel-great metaphor) but like many americans can't imagine living expat-it's certainly not for everyone. You have gotten a lot of good advice and you seem to have a head on your shoulders and won't "go crazy" here.

Insurance here through AIA is only with a work permit or residency AFAIK. I pay around B17,000/year for inpatient coverage, single male,and it has worked very well(100% pay out) on two hospitalizations. This also has international coverage, but depending where it could be insufficient-especially for high western country care...., You can pay more or less, I am somewhere in the middle...for my age...you should pay smaller premiums as you are young....BUPA will do non work permit folks at a higher premium but still very reasonalbe-when you decide where you will live, check the good private hospital room/surg rates to get some feel for your coverage needs.

Bruce, my job like most in LOS does not pay for my med insurance....some will offer you a in house plan...but often very limited and you pay....I do qualify for the gov insurance scheme and can go to gov. hospitals for very very cheap but prefer the private service.

Finally...though tempting to do a private business here be careful. You must trust your Thai business partner...Obviously working well for JRBKK(fantastic). However, most of my friends experience has been different. If you already have business talent/experience-good, but still it is a minefield for many-research well. I think an easier peace of mind...make the move, marriage visa, showing investment stream....decide after much research later maybe a very small business to "supplement" income...but that's just me. I did some business in america....not my thing too many headaches your mileage may vary....Chok Dee Siam American

[Heng]

earlier someone suggested starting your own business. I invested 45k THB(inventory and rights to the rental contract) in a very small (15sqm) rented space outside a convenience store with a lot of traffic, rent 4,500/month.

My GF and her brother in law sell cheap beachware from the space which is located very near the beach. The GF does most of the purchasing in BKK and sends it on the bus to the shop. The brother in law runs the shop. They average a net profit of more than 1,000/day. The deal was that I would get 10% of net profit to pay off my investment. Start was December 2005 and I was paid back in full 12 months later incl. 10% interest. It provides both my GF and her immediate family with an income source sufficient for their needs. They have even expanded/upgraded their house upcountry with another two bedrooms, new kitchen, bathrooms etc with money earned from the shop. ( and now are ofcourse thinking/dreaming about a car!!??!!)

The point I am trying to make is that for very little money/investment and with almost no risk, it is fairly easy to have an income greater than that of the average english teacher. I am seriously considering setting up a business myself here. What kept me from doing it sofar is that I am much too comfortable with my "rat race" job and income here in Thailand and abroad.

Siam American: I would say go for it ASAP, but instead of getting into english teaching, I would start a small business and take it from there. Good luck.

Going entrepreneurial isn't for everyone. There's most certainly risk to doing so it's called market risk (and it'd be a mistake to assume that this doesn't exist here... or worse, to overestimate one's ability to overcome local market risk). And when compared to a lot of the investments mentioned previously, market risk compared to institutional risk is a no brainer. Most looking to maintain and build on their current financial foundation at a conservative rate would choose institutional risk (CDs, fixed accounts, etc.). Nothing wrong with mixing in market risk, in fact it's wise to take some risk on... but betting it all on the market -whether it's the Nasdaq or Chatuchak market- is no better than gambling, no matter how "good" you think you are at it.

That said, I built my revenue streams here in the LOS up from just a few thousand US$ just as you did. But before I got my first 'working business model' (exporting pet fish/aquatic plants/cut orchids), I also crashed and burned 3-4 businesses first.... and that's despite the fact that I've never had to borrow a cent or satang for any of these businesses and have never had to pay a single month's rent (since I owned the properties I was doing business in to begin with)... given an advantage that most can't count on. I have watched us go from nothing to making maybe $100-$200 a day to a few $k a day in profit, for a good run of 7-8 years, and then back down again to barely making $400-500 a day in the present, even though we are much better at what we do than before, have a brand new fleet of trucks (instead of old pickups with turtle backs in the old days), and a full spectrum of time / cost competitive suppliers. Ah, but then the Baht took a dive. Unfortunately for many, they ride their businesses all the way up and all the way back down... still paying rent, not diversifying, and worse yet taking on debt along the way. So goes the market.

Now my bread and butter is 4% (and a bit) fixed accounts + the revenue from my investments in the family pawn shops (loaned out at 12% a year; secured with collateral). Now the gamblers out there will tell you that at 4%, you're not beating inflation. Full respect, and yes that's important benchmark for many, but also considering that the vast majority of folks in the middle classes (much less the vast majority of people on the planet) have a negative savings rate, I'd say they are skipping a step in there somewhere.

[siamamerican]

earlier someone suggested starting your own business. I invested 45k THB(inventory and rights to the rental contract) in a very small (15sqm) rented space outside a convenience store with a lot of traffic, rent 4,500/month.

My GF and her brother in law sell cheap beachware from the space which is located very near the beach. The GF does most of the purchasing in BKK and sends it on the bus to the shop. The brother in law runs the shop. They average a net profit of more than 1,000/day. The deal was that I would get 10% of net profit to pay off my investment. Start was December 2005 and I was paid back in full 12 months later incl. 10% interest. It provides both my GF and her immediate family with an income source sufficient for their needs. They have even expanded/upgraded their house upcountry with another two bedrooms, new kitchen, bathrooms etc with money earned from the shop. ( and now are ofcourse thinking/dreaming about a car!!??!!)

The point I am trying to make is that for very little money/investment and with almost no risk, it is fairly easy to have an income greater than that of the average english teacher. I am seriously considering setting up a business myself here. What kept me from doing it sofar is that I am much too comfortable with my "rat race" job and income here in Thailand and abroad.

Siam American: I would say go for it ASAP, but instead of getting into english teaching, I would start a small business and take it from there. Good luck.

Going entrepreneurial isn't for everyone. There's most certainly risk to doing so it's called market risk (and it'd be a mistake to assume that this doesn't exist here... or worse, to overestimate one's ability to overcome local market risk). And when compared to a lot of the investments mentioned previously, market risk compared to institutional risk is a no brainer. Most looking to maintain and build on their current financial foundation at a conservative rate would choose institutional risk (CDs, fixed accounts, etc.). Nothing wrong with mixing in market risk, in fact it's wise to take some risk on... but betting it all on the market -whether it's the Nasdaq or Chatuchak market- is no better than gambling, no matter how "good" you think you are at it.

That said, I built my revenue streams here in the LOS up from just a few thousand US$ just as you did. But before I got my first 'working business model' (exporting pet fish/aquatic plants/cut orchids), I also crashed and burned 3-4 businesses first.... and that's despite the fact that I've never had to borrow a cent or satang for any of these businesses and have never had to pay a single month's rent (since I owned the properties I was doing business in to begin with)... given an advantage that most can't count on. I have watched us go from nothing to making maybe $100-$200 a day to a few $k a day in profit, for a good run of 7-8 years, and then back down again to barely making $400-500 a day in the present, even though we are much better at what we do than before, have a brand new fleet of trucks (instead of old pickups with turtle backs in the old days), and a full spectrum of time / cost competitive suppliers. Ah, but then the Baht took a dive. Unfortunately for many, they ride their businesses all the way up and all the way back down... still paying rent, not diversifying, and worse yet taking on debt along the way. So goes the market.

Now my bread and butter is 4% (and a bit) fixed accounts + the revenue from my investments in the family pawn shops (loaned out at 12% a year; secured with collateral). Now the gamblers out there will tell you that at 4%, you're not beating inflation. Full respect, and yes that's important benchmark for many, but also considering that the vast majority of folks in the middle classes (much less the vast majority of people on the planet) have a negative savings rate, I'd say they are skipping a step in there somewhere.

Hard to make sense out out of this post. You mention that you started with a few thousand and went bust 3 or 4 times before finding the right model. In your next sentence you tell us you never paid rent and owned the properties you did business in. How could you be broke and at the same time own the properties?

As for the stock market being a gamble, so is getting out of bed each morning.