Your solutions on 3 million baht to find longevity here

[kendo]

Spitfire the British and International Franchise Show is on the 16 -17 March at Olympia here's a link

http://eco.co.uk/event/british-internat ... n-2012/451

Kendo.

[Super Joe]

so how much is enough? i am moving to thailand in 2 years time. i will be 58 then and i will be able to raise £250,000, about 12 million baht at todays exchange rate. i have a woman who lives in tak, which is halfway between bkk and chiang mai, she owns her own house and works as a pharmacist assistant in a hospital. she will continue to work, but my only additional income until i reach state pension age is £200 a month that i recieve from my late wifes civil service pension. will our joint assets be enough for us to have a reasonable standard of living.

With a sum like that, if you were astute, you could conceivably make traditional investments in the West that would finance a modest lifestyle in Thailand with less capital risk. For instance there are cities in the UK and other parts of Europe where you could buy two or three rental apartments for that.

That would be it for me too, invest in property and rent it out. For so many reasons...
1) The net rental of maybe 4-7% is not to be sniffed at, I should think the odds of it being 'guaranteed' compared to success starting a new business are infinately better.
2) Your capital is not risked, generally.
3) History shows your capital grows in excess of inflation in the long run, generally.
4) It's an asset you can actually use if needs be.
5) You can modify/expand it to sub-let part, start a business on part etc.
6) You can fairly easily raise capital against if needs be, particularly in Thailand (albeit expensive rates).
7) You can cash it in if needs be to get you out of the mire. How do you cash in your investment in a failing business!?

IMO, for the low risk involved there's nothing that can touch the fact that property pays a dividend AND increases in excess of inflation over the medium-long term. It's out-performed the stock market because of this.

If you put your money in a savings account you can't touch a penny of the interest without your invested capital starting to depreciate through inflation. If you decided to risk a large % of your life savings in a new business, particularly in Thailand, I think you'd be mad. If the rental return is sufficient then I'd take that yardstick as telling me I'm just not ready yet.

Re: a business in Thailand, if it in anyway involves leasing a shop/office/restaurant etc, and this involves investing substantial part of your savings, then forget it would be my advice. What's the longest lease people usually accept? 5 or 6 years, at the end of that you are at the mercy of the landlord, rent increase agreement or not. The better you're doing the more it'll increase. I know of quite a few who have had to move on to another location because of it, a least 3 sponsors on here have. And they don't have 5 or 6 years they have 3 years as landowners do not register the leases at land office, they can legally use that against you to get you out. Lease law is very biased towards the lessor here, seeing as the laws are written by wealthy owners that's a given.

And the couple of leases I've actually read, one who does many bars in town, is no more than a 30 day lease. People have unwittingly signed up to a clause that says they agree to vacate within 30 days of notice should the landowner decide to sell the property. It's not even dependant upon a buyer, just a desire 'to sell'.


SJ

[kendo]

Wow amazing post SJ, i am thinking along the lines of getting into being a land lord, i have capital nearly enough deposit, to buy a two bed appartment, but in the UK the criteria is 30% deposit on buy to let morgages, so its a long term plan.

I will be morgage free on my house at 50-51 and my intention was always to gift a property to my baby girl Amelie, i will try to give her ultimate choice in Thailand or here.

Maybe i should think about the bigger picture for my own great escape, food for thought mate.

Kendo. :cheers
ps look forward to seeing you at the Saterday Social.

[margaretcarnes]

As you know you will have to get by for at least 7 years before your State Pension kicks in - at which point I suspect that the civil service pension might cease. Worth checking on that by the way.

I've researched this as part of my retirement plan (my state pension will not kick in for 12 years). In the event that I should die, my Thai wife will receive a percentage of my Civil Service pension for life. On the day that I would have been eligible for state pension, my wife will also qualify for the spouse's element of that pension also. She has not worked enough in the UK to qualify for a state pension in her own right.

If Margaret, or anybody else for that matter, knows differently then I'd like to know - this has been an important piece of my retirement planning to make sure my wife is financially secure (although my death has never really featured in my planning ).

A different situation BB. Curlybaggie gets a widowers Civil Service pension transferred from his late wife. That's why I'm wondering if there is a cutoff point for it.
But you do need to be aware that there is no longer a 'dependant addition' to any UK State Pension (other than some residual payments which carry on until death as things stand.) For new pension claims the only way for a spouse to get any extra due to her lack of NI conributions is if - as a couple - there is scope for Pension Credit.
Another thing you might want to check is whether - in the event your Thai wife does end up with a widows CS pension - that pension stops if she remarries. Although how they would find out is another matter. I do know for sure that a CS pension can only be transferred to A N Other one time only.
Pensions are a minefield, CS ones included, and I have known plenty of financial advisors who sadly don't have a clue about the finer points. Especially with State Pensions.

[Korkenzieher]

The single biggest issue with buying a property as a landlord is how much the yield is relative to the debt. Plenty of people talk about 7-8% yield, ignoring the fact that they are carrying 70% loan-to-value on maybe 5% interest. If you factor in usual levels of debt, property hasn't outperformed anything very much - certainly not the stock market. Fifty year compound return on a zero debt proposition has been between 3.5 and 4% - that is taking figures from 1960 to 2010, and is obviously slightly downwards affected by the 2008 collapses.

You need to spread-sheet it up pretty carefully and make decisions on whether you are investing for yield, capital gain, consider what you will do if interest raise, and keep on rising, and so on. There's many things to consider, not least whether you would take all the income, pay down interest only or pay down debt as soon as possible. It is true that if you leverage your money by taking on debt (as a buy-to-let landlord) you can grow the asset base very much quicker so long as rates don't catch you out.

I would certainly agree however, that this is a decent time to be considering making that style of investment, if you are not already in the market and want to be. Many of the other comments are good too - you can move to occupy and so on.

[Big Boy]

A different situation BB. Curlybaggie gets a widowers Civil Service pension transferred from his late wife. That's why I'm wondering if there is a cutoff point for it.
But you do need to be aware that there is no longer a 'dependant addition' to any UK State Pension (other than some residual payments which carry on until death as things stand.) For new pension claims the only way for a spouse to get any extra due to her lack of NI conributions is if - as a couple - there is scope for Pension Credit.

We're off topic here, so this had better be the last post on this

My wife definitely gets a % of my Civil Service Pension in the event of my death, and that lasts until her death, or as you rightly say, she re-marries.

Regarding State Pension, what you are saying is contrary to what I was told by an 'expert' not long ago. However, I know that you're good at these things, so I will check it out again - thank you.

Fortunately, most of my planning has been based on Civil Service Pension, and any income from State Pension will be a bonus.

[Spitfire]

A lot of useful stuff so far on here, cheers.

As an aside, does anyone know anything about investing sums of the like mentioned (US$ 100K or more) in bank systems that may seem unconventional, like Central or South American/Chinese/Hong Kong/Thai or wherever banks?

Am I right in thinking that when you invest with, say Lloyds or someone, that they invest it somewhere like a Panamanian bank that gives them 7% but they pay you like 3-4% and take the risk but pocket the difference?

Not sure on that one of course and may be completely wrong but have heard that they do that sort of thing.

Do the Thai banks offer anything worth looking into that may pay you a regular fee?

[Korkenzieher]

If you are looking for a multi-currency interest bearing account, then I think you could do a lot worse than Singapore and Malaysia though I'm not sure if the terms and conditions for international investors would be as favourable as those for locals.

[Super Joe]

Wow amazing post SJ, I am thinking along the lines of getting into being a land lord, i have capital nearly enough deposit, to buy a two bed appartment, but in the UK the criteria is 30% deposit on buy to let morgages, so its a long term plan.
I will be morgage free on my house at 50-51 and my intention was always to gift a property to my baby girl Amelie, i will try to give her ultimate choice in Thailand or here. Maybe i should think about the bigger picture for my own great escape, food for thought mate. Kendo.
ps look forward to seeing you at the Saterday Social.

I wouldn't hesitate personally Kendo. This certainly is the mother of all financial crises, but historically anytime from around now/soon and the next 5 years is when prices usually come back with a vengeance. I had a buy-to-let in '97 or '98 I think and the rent didn't cover everything, agents fees/insurances/repayments etc and it was running at 100 quid/month 'loss', but nobody cared because you were down 1,200 quid/year from this but the value increased by 4k or 5k. Only wish I had done more than one like others did, but easy to say with hindlegs.

There's no guarantees things will follow previous patterns, the main thing for it to work imho, is if you're not stretching yourself at all and you can afford to give it time if it needs it, ie: 8-10 years plus. Time in the market, not timing the market, as they say
Yes, see you there fella

The single biggest issue with buying a property as a landlord is how much the yield is relative to the debt. Plenty of people talk about 7-8% yield, ignoring the fact that they are carrying 70% loan-to-value on maybe 5% interest. If you factor in usual levels of debt, property hasn't outperformed anything very much - certainly not the stock market.

We were talking about having the capital up front though. And oranges for oranges... if you've only got 25k out of the 100k to invest (75% LTV), then you've also only got 25k of the 100k you want to invest in the markets... so also have to borrow at interest!?

Even if you did borrow at 5%, it still historically returned 7%'ish a year in UK, for no real risk. Being able to invest and claim a stake in the ownership of the whole asset... 15, 20, 25 years earlier than you are financially ready to... is one of the biggest plusses to the whole investment. How do you get that advantage starting a business or playing the markets.

SJ

[T.I.G.R.]

Even if you did borrow at 5%, it still historically returned 7%'ish a year in UK, for no real risk. Being able to invest and claim a stake in the ownership of the whole asset... 15, 20, 25 years earlier than you are financially ready to... is one of the biggest plusses to the whole investment. How do you get that advantage starting a business or playing the markets.

If you look at a bar graph for the past fifty years or so, of American real estate prices, you will see a huge spike in the figures, which was our bubble that popped.

So history doesn't validate the fact that you will always do well in property......and one should never, ever borrow money to use as leverage. Ask all the risk takers in America how it worked out for them.......

[Korkenzieher]

@super joe - sure, it was just pointing out that if you take for instance an interest only approach (which might be difficult today) as opposed to a paydown approach on a loan, it will all look quite different on a spreadsheet. I have 2 - 1 paid up completely, and one on interest only at 2.0% above MLR. Right now, with interest rates at 0.5% it is almost a meaningless distinction, as I get practically all the income - but with interest rates at say 6% as they were in 2007, then the income gets swallowed completely on one house, and you are looking at capital gain only.

I certainly agree there are few better ways to build an asset portfolio than B2L - but it does largely rely on people either paying down the debt in your name, or asset value increases.

[Dannie Boy]

A lot of useful stuff so far on here, cheers.

As an aside, does anyone know anything about investing sums of the like mentioned (US$ 100K or more) in bank systems that may seem unconventional, like Central or South American/Chinese/Hong Kong/Thai or wherever banks?

Am I right in thinking that when you invest with, say Lloyds or someone, that they invest it somewhere like a Panamanian bank that gives them 7% but they pay you like 3-4% and take the risk but pocket the difference?

Not sure on that one of course and may be completely wrong but have heard that they do that sort of thing.

Do the Thai banks offer anything worth looking into that may pay you a regular fee?

I am in the process of having a house built here so have transferred a sizeable amount into my account at Kasikorn. When I was in the bank today, the woman who served me pointed to a notice about them paying up to 8% interest on fixed amounts held for more than 13 months. She then went on to mention that it would be subject to tax, which was when my interest (no pun intended), started to wane, as I don't want to get involved with registering with the Thai tax authorities, but it may be worth investigating for others?

[margaretcarnes]

Just a little tip here for 'buy to let' plus longer term capital gain properties in the UK. Word on the soi in the Humber area - Yorkshire and North Lincs - is that the burgeoning property market around the south bank of the Humber Bridge - ie Barton, South Ferriby - will soon turn to boom with the big reduction in bridge tolls due very soon.
Current typical prices in Barton are around 120 k to 150 k for good detached bungalows. I personally don't think it will be long before people on the north bank start to move over. Certainly if I were in a position of looking for an investment or BTL that is where it would be.

[Nereus]

What many of these posts have to do with the the OP completely eludes me.

Dannie Boy, and others for that matter: you do not have to register, or become involved with the tax man, with interest earned on deposit accounts at a Thai Bank. It is taxed at source by the Bank, and you will not even see where it was deducted.

[Jose]

hi mate,

sports arbs are not high risk, I think you may be refering to sports trading or spread betting. Sports arbing is when you bet on two outcomes on the same game that returns a small profit regardless of which outcome wins. Example you find a bookie with good odds on over 0.5 goals in a game, you then find a different bookie with good odds for a 0-0, you balance you stakes so you realise a profit either way.
google rebelbetting or mathbet.

Sports arbitrage isn't difficult but it is hard work. That might sound a bit of a contradiction. I have done quite a bit of it, but find in general that from Thailand, with certain sites being blocked, internet latency, time-zone differences and black / brownouts at inconvenient times, that the return doesn't often justify the risk. Sports arbitrage is really pretty much identical to day trading, whether it is stocks, futures or ForEx. It takes the same level of expertise to make a success of any of them. It is not trivial, a comes with considerable risk to your bankroll which needs to be larger than most people first realise. But once you know what you are doing, it can be quite profitable.

Likewise some of the online gaming options, particularly poker and 'bonus pimping' can turn a profit. @hhfarang - point your browser at 'matched betting' and you will find a lot of very good info about how to find the opportunities. But this is not intended as an encouragement to try it. Most of the easy money has been made.

From the "basics book of investing (aka Korkenziehers Rules of Thumb)". If want an income of say £20,000 - roughly 1M baht, or 80,000 a month, and ignoring tax implications:
Average sized accounts of say £2000 - making average returns of 10% gets you a weeks shopping at Tesco!
order of magnitude larger - £20,000 account - 10% is 2000 a year. To get that year in, year out you are outperforming 95% of the professionals
order of magintude larger still - £200,000 account gives £20,000 a year. Any more than that, consistently, and you are getting into Buffett territory.
order up again - £2,000,000. Why would you risk it in share trading?

So, in conclusion, for an acceptable quality of life here based on trading, you need either in excess of £200,000 consistently and well managed, and to be very good at the job or very lucky. That is $300,000 roughly. I would personally not fancy it with much less than close to double that. So, IMHO, I feel that $100,000 to run a trading operation simply isn't enough if you have to live out of the same money.