Your solutions on 3 million baht to find longevity here

[Dannie Boy]

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.

Thanks Nerus, if that's the case then I might make further enquiries next time I go to the bank - not sure what rate of tax they deduct, but 8% gross is worth looking into.

[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.

Thanks Nerus, if that's the case then I might make further enquiries next time I go to the bank - not sure what rate of tax they deduct, but 8% gross is worth looking into.

The withholding tax rate on savings accounts is at present 15%.

[Pagey]

Dannie : The Thai deposits at Kasikorn I looked at recently were not 8% p.a. but a stepped %age. I can't remember the figures but it's for example 1% for the first 3 months, 2 % for the next 3 months, 4% for the next 3 months and 8% for the last 4 months so maybe averaging 4 or 5% over a year so not 8% p.a. but still comparable or slightly better with UK banks. Especially useful IF immigration allow that type of account to be used for your 800,000k visa based on retirement. I think that debate has been the subject of another thread and not conclusive

[Dannie Boy]

Dannie : The Thai deposits at Kasikorn I looked at recently were not 8% p.a. but a stepped %age. I can't remember the figures but it's for example 1% for the first 3 months, 2 % for the next 3 months, 4% for the next 3 months and 8% for the last 4 months so maybe averaging 4 or 5% over a year so not 8% but still comparable or slightly better with UK banks.

I must admit that I didn't pay that much attention as soon as the woman mentioned tax, but if it is simply that the bank does the withholding then I will at least find out more, even if it is as you say, a stepped increase, but I certainly recall her saying that after month 13 it hits 8%, so presumably for year 2 onwards, it is the full 8% gross, which is pretty good going?

[Pagey]

Dannie I think it is a 'bond' that matures after 13 months. I don't think it pays 8% after the 13 months are over but pays you out your investment plus interest and you have to start again.

[Dannie Boy]

Dannie I think it is a 'bond' that matures after 13 months. I don't think it pays 8% after the 13 months are over but pays you out your investment plus interest and you have to start again.

Thanks Pagey, I will check next time I am there but if that is the case then probably not worth the bother as most/all of the money will be spent over the next 6-8 months building the house.

[Super Joe]

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

The last 50 years in the U.S. shows growth of 5.5% average per year, exceeding inflation at 4.2%. And this is today after the biggest plunge in US house values since the great depression, so it's withstood the biggest test, we know what would happen to a business or stock market portolio when hit in a similar way. The US 100-year trend line indicates US property will recover about 30-40% of the value lost since 2007, time will tell ofcourse.

And ofcourse house price graphs do not indicate the monthly rental returns, which have been 5% net on average of last 50 years in the US. So overall long-term investment returns have averaged 10.5% p.a., even with this current slump. And that's a massive plus that your rental income stream is maintained even when the thing it is derived from is crashing, if your business suffered this level of set-back you'd have serious cash-flow problems.

Anyway, that's why I'd advise anyone with a specific amount to invest it in property first, and only invest in a business here if it was a small portion of their savings and that they were otherwise sound should it go tits up. And totally agree about not over-leveraging yourself.


SJ

[johnnyk]

A bank paying out more than it charges for loans? Where?

[johnnyk]

If you had 3 million baht ($100K US/60k UK pounds) and wanted to start a sustainable expat life here with a wife/kid plus achieve longevity, but weren't of retirement age or in receipt of a pension or any other income.....what would you suggest or do?

Only parameters are not opening a bar or teaching.

Is it enough or is it do-able, and if so....then how? Any suggestions?

If you think "Nay", then say so.

Interested to know what you guys would do in that situation despite many of you being in much more lavish settings/circumstances.

I had this question asked of me by a few friends (some with Thai girlfiends or wives) that say they have some money but not too much and are seriously considering moving from the UK. I must admit that I suggested starting a 7-11 or something after being here for a year or so.

Thanks for any replies as I don't live by the beach so have limited authority on such beach touristy destinations.

Anyone contemplating retiring to Thailand with 3 million baht in his pocket is certifiably nuts. The following post by a knowledgeable guy across the Gulf is worth reading:

I) Assumption One: I will live for exactly 30 years in retirement.

Commentary: No one lives forever. You need to pick a time frame for your life. I just picked the number. The best way, however, is to use insurance life tables. Here's a link to figure out how much time, statistically speaking, you have left.

http://www.budgetrates.com/mortality.htm

There are a lot more detailed tables out there if you are interested; Just google insurance life tables. But this one is simple.

II) Assumption Two: Baseline budge amount. I choose that in year one I will spend 100,000 baht per month.

Commentary: This is an important number. Don't forget to add in travel, medical and other things that you will spend money on. This represents ALL spending, for whatever reason.

III) Assumption Three: Inflation. The amount you need to live on goes up every year, of course. What you spent for a beer in 1970 is different than in 2012. You will spend more in year 30 than year one for the same basket of goods. I choose 5% as the inflation rate.

RUNNING THE NUMBERS:
I use simple interest methods.

YEAR 10: Monthly spending=155,000 baht per month (55% above year one); TOTAL SPENT IN TEN YEARS, 15.05 million Baht. ($500,000)

YEAR 15: Monthly spending=197,000 baht per month (about double year one); TOTAL SPENT IN FIFTEEN YEARS, 25.79 million Baht. ($860,000)

YEAR 20: Monthly Spending=252,000 baht per month (250% above baseline); TOTAL SPENT IN TWENTY YEARS, 39.51 million Baht. ($1,310,000)

YEAR 30: Monthly Spending=411,000 baht per month (4x year one); TOTAL SPENT IN 30 YEARS, 79.49 million Baht. ($2,650,000)

And note, when it comes to the dollar amounts, I am assuming that the dollar stays 30:1 to the Baht in this excercise. That was to keep it simple. If you change this rate, say decreasing it to 20, the dollar amount for 30 years balloons to almost 4 million dollars spent over a 30 year period.

CONCLUSIONS:

This simple outline shows the huge amounts of money spent over time. The starting budget is 100,000 baht per month. This is a good budget-many people get by on much less-but it also is not "living like a King". And by the end of the 30 year period the exact same basket of goods you bought in year one for 100,000 baht will cost you 400,000 baht. Over the course of your retirement on this budget you will have spent some two and a half million dollars in total and maybe a lot more if the Baht falls to under 30-1.


Thus, your retirement funding must cover this total amount. If it doesn't, you go home. Maybe you have a pension. Maybe you have rental properties. Or maybe you just have a nest egg. Or you might have some combination of all these. But where ever you plan on drawing the money, these are the kind of numbers you must deal with over time. And this is why so many people don't make it long term in Thailand. These are Big Numbers. The ever increasing effects of compound inflation over time are very difficult to keep up with for most retirees.

Plan Carefully.

[hhfarang]

Good post Johnnyk and it makes sense. My Pension income was 120k when I came here. It's now 85k because of the exchange rate and inflation has increased the cost of living here by somewhere between 20 and 40% since I came. My initial bank (savings) was around 19 million at 44 baht to the dollar at that time, 13 million at today's exchange rate so I've lost 6 million from savings alone just due to the exchange difference. I'm going on 9 years here and your 10 year estimate is pretty close unless you can live at a much lower lifestyle.

I realize that some come here to escape a miserable life somewhere else, whether it's work, climate, or whatever so this is paradise and those people will be willing to lower their lifestyle drastically just to be able to live here. I actually intended to have the same lifestyle in retirement as when I was working.

[lomuamart]

A fixed income from abroad probably isn't going to cut it here any more unless a person is lucky to have also made a small fortune before and is of the age that there aren't many years left. 3 mill THB - no way as we've all been saying.
On a personal note, I'm lucky in as much as I've still got my property back in central London and I rent it out for income. Over the past 8-10 years, that income has increased by about 25%. And the figure could have been higher but sometimes it's worth keeping tenants on. Getting new ones can be expensive. A year or so of consolidation is necessary before spending a lot on maintenance to attract a higher rent.
That dosn't keep me ahead of exchange rate fluctuations or inflation here but at least I'm not swimming against the tide quite as much as I might have been.

[T.I.G.R.]

Let's not forget in these figures that it is quite likely as one ages one spends less money. I, for one, will eventually give up chasing that damn little white ball, and thereby, will increase my disposable income twofold.

[Vandoug]

I plan to move to Hua Hin (first choice, Bangkok if all else fails) for six months this winter and spend my time day trading on Nasdaq. I would be interested to hear from any expats doing the same thing (any market) regarding internet issues, latency etc. Has it worked for you? How difficult is it to get a quality land line, not interested in wifi. Thanks in advance.

[Pleng]

There's no problem getting quality and decentish speeds. If you're relying on last-second decisions to sell or buy you might be out of luck because the network can go down without notice. It doesn't happen very often, but if it happens just in the window where you might be able to make a million, it might be enough to put you off the country for life!

Not to mention, internet downtime aside, the power occasionally cuts out for a few minutes to a couple of hours at a time, which could leave you in a similar situation.

I'd imagine things are a bit better in bkk, but I have no experience to base this on!

[Vandoug]

Thanks for the info. Just wondering if there is a time of day the power goes out most often? I will be trading Nasdaq so that means I would start around 9 pm. in Hua Hin