chiangmai
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Post by chiangmai on Jun 4, 2018 9:33:03 GMT 7
My jury is out regarding cost of living in Thailand versus the UK and I have been looking at this topic quite closely of late. As always with these things I think the answer is in lifestyle and personal circumstances as well as location in both countries:
Council tax is impossible to avoid in the UK, as is high energy costs in the winter - supermarket food and beer costs are however cheaper in many cases, clothes certainly are. With the exchange rate being so poor/good at present the cost of imported electronics such as appliances and TV's is quite high.
Thailand wins out for transportation costs, food sold in markets, low cost utilities and inexpensive eateries.
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FIREinTh
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Post by FIREinTh on Jun 4, 2018 12:14:48 GMT 7
I'm wondering today how the OP feels about his comments (above) in light of the fall in the SET and capital outflows? The BOT Guv emerged to tell us that outflows are not a problem, a sure sign that something is amiss. There's going to be some volatility from the US-China trade war as well as outflows from higher interest rates and yields in the US, along with whatever other reasons are the flavor of the day. Long term I think Thailand and Asia are good investments.
I'm going to be accumulating for a long time so I welcome the recent pull-back from highs over 1800. It's nice not to be buying at new highs for a change.
The money I've kept invested in Thailand the past 10 years has performed better than almost anything I have. That includes holding through the flooding in 2011 and the drop from 1600 to 1200 when the end to quantitative easing was announced.
The SET keeps going no matter what anyone or country has thrown at it. In a way, since it's such a small market and easily affected by foreign inflows and outflows, the added volatility allows for better returns (buying at lower prices) for someone who is accumulating regularly than if it went up in a straight line.
It's going to be interesting how far it drops and how long it stays down for this time. Shouldn't affect anyone's long term-plans though.
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FIREinTh
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Post by FIREinTh on Jun 4, 2018 12:24:50 GMT 7
Thanks siampolee. I'm back. I used to be Ludacris but I've re-branded myself as FIREinThailand since I found the FIRE lifestyle and made a lot of changes in my life. It stands for Financially Independent Retire Early and if you're curious you can check out the FAQ at reddit. www.reddit.com/r/financialindependence/wiki/faqHere's my original post: It's possible there’s never been a better time in history to be alive. We're currently in a golden era of human existence measured by almost every social and economic indicator. The world is currently experiencing synchronized economic growth. The unemployment rate in many countries is the lowest in decades, and wages are finally starting to rise for the first time since the 2008 crash. The global economy is in a sweet spot of full employment, low inflation, and low-interest rates. Quality of life has never been better in other areas as well. Life expectancy has never been higher. Poverty has never been lower. People have never been healthier. Armed conflicts are at an all-time low. Education has never been more accessible. Thailand has been doing really well in the past few years. The Stock Exchange of Thailand is near all-time highs, politics have been calm, and there's a general feeling of optimism in the air. Have you changed your investments or increased your savings rate? Have you had to plan for a longer retirement? Have you decided to stay in Thailand longer? Over last 17 odd years, made a point of trying to save at least 50% of my income I am planning on retiring in the next 3 to 5 years, it maybe partial retirement yet, not sure Jury is still out on whether i retire in Thailand or go home to retire, with the exception of property, i can retire cheaper at home, given exhange rate (i currently get paid in USD) and general cost of living Tongue in cheeky.. If my crypto investments play out...in addtion to the Aston DB-11, I intend buying a small Thai island and creating an underground lair as a base for world domination by Honey Badgers, (with lasers on their heads and Adamantium claws and teeth)
That's great you've been able to save at 50% of your income for so long! Living far below your means and early retirement go hand-in-hand.
It's interesting that a lot of things would be more expensive back home if you retired there with the current exchange rate. I find a lot of things are higher quality back home but really expensive. At least in Thailand it's easier to live cheaply if you want to, but it doesn't sound like you're looking for a cheap retirement.
I'm also hoping for a another crypto bubble to help me with retirement. Fingers crossed.
I heard animals with laser beams on their heads is easier said than done haha. Dr. Evil might have some extras you could use
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Post by rgs2001uk on Jun 6, 2018 21:39:09 GMT 7
I'm wondering today how the OP feels about his comments (above) in light of the fall in the SET and capital outflows? The BOT Guv emerged to tell us that outflows are not a problem, a sure sign that something is amiss. There's going to be some volatility from the US-China trade war as well as outflows from higher interest rates and yields in the US, along with whatever other reasons are the flavor of the day. Long term I think Thailand and Asia are good investments.
I'm going to be accumulating for a long time so I welcome the recent pull-back from highs over 1800. It's nice not to be buying at new highs for a change.
The money I've kept invested in Thailand the past 10 years has performed better than almost anything I have. That includes holding through the flooding in 2011 and the drop from 1600 to 1200 when the end to quantitative easing was announced.
The SET keeps going no matter what anyone or country has thrown at it. In a way, since it's such a small market and easily affected by foreign inflows and outflows, the added volatility allows for better returns (buying at lower prices) for someone who is accumulating regularly than if it went up in a straight line.
It's going to be interesting how far it drops and how long it stays down for this time. Shouldn't affect anyone's long term-plans though. A lot of truth in what you say, question will probably never be answered, I wonder how may bobs your uncle type brexit pensioners are now stuck here lamenting their lifestyle choice. I am a great believer in the adage, if you cant afford to retire in your home country, you cant afford to retire in Thailand.
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Post by rgs2001uk on Jun 6, 2018 21:45:56 GMT 7
Over last 17 odd years, made a point of trying to save at least 50% of my income I am planning on retiring in the next 3 to 5 years, it maybe partial retirement yet, not sure Jury is still out on whether i retire in Thailand or go home to retire, with the exception of property, i can retire cheaper at home, given exhange rate (i currently get paid in USD) and general cost of living Tongue in cheeky.. If my crypto investments play out...in addtion to the Aston DB-11, I intend buying a small Thai island and creating an underground lair as a base for world domination by Honey Badgers, (with lasers on their heads and Adamantium claws and teeth)
That's great you've been able to save at 50% of your income for so long! Living far below your means and early retirement go hand-in-hand.
It's interesting that a lot of things would be more expensive back home if you retired there with the current exchange rate. I find a lot of things are higher quality back home but really expensive. At least in Thailand it's easier to live cheaply if you want to, but it doesn't sound like you're looking for a cheap retirement.
I'm also hoping for a another crypto bubble to help me with retirement. Fingers crossed.
I heard animals with laser beams on their heads is easier said than done haha. Dr. Evil might have some extras you could use Dont know what country you come from, (new)cars back home are certainly cheaper than here, I can buy a decent second hand car back home for 200,000 baht, try that here. Quality elect goods back home, cheaper than here, I have just bought a 180,000 stereo system (nad) that would have been half the price back home. Check out the costs of Gillette shaving gel here, check out the cost of razor blades, jeez on other forums the skint poms are complaining they cant afford to pay 120 baht for a bottle of HP sauce.
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FIREinTh
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Post by FIREinTh on Jun 7, 2018 14:18:42 GMT 7
It would be risky retiring here with only a foreign pension. You would have both exchange rate and local inflation risk. It would be even riskier if your foreign pension is frozen and not adjusted for inflation in your home country. That's why it's important to have some investments in the country you are living in. Some things are definitely more expensive in Thailand, like foreign imports and luxury goods. Overall though, I think most people spend less in Thailand than they do back home. As long as you don't have expensive tastes in cars, stereos, and shaving cream, it's easy to spend less here Hopefully crypto will offset some of those costs!
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Post by rgs2001uk on Jun 7, 2018 21:19:09 GMT 7
^^^ thanks for the tips, might have to grow a hipster beard and man bun.
Just as a matter of interest, how much do you think it would cost for a single man of 55 to live in Bkk, a non farang but Thai lifestyle?
How much do you think a farang retiring in Thailand should have as a minimum income each month?
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Post by Fletchsmile on Jun 8, 2018 17:19:35 GMT 7
It would be risky retiring here with only a foreign pension. You would have both exchange rate and local inflation risk. It would be even riskier if your foreign pension is frozen and not adjusted for inflation in your home country. That's why it's important to have some investments in the country you are living in. Some things are definitely more expensive in Thailand, like foreign imports and luxury goods. Overall though, I think most people spend less in Thailand than they do back home. As long as you don't have expensive tastes in cars, stereos, and shaving cream, it's easy to spend less here Hopefully crypto will offset some of those costs! Definitely agree with you about the risk of retiring here with only a foreign state pension. Particularly a UK frozen state one. Wouldn't like to be in that boat, and totally agree about investing in Thailand. For me the question is can you afford not to invest in Thailand, rather than can you afford to invest in Thailand
For us I though I think it would actually be cheaper expense-wise to live in the UK than Thailand:
- A decent school could be had for free. Whereas in Thailand you have to pay for an international school
- Cars more expensive here - Housing really depends on where you live. Both our condo and house cost more than my parents house in the UK. Mainly because BKK is the capital whereas my parents house in UK is way away from London
School is the biggest. For top quality / decent international think THB 100k+ a month for 2 kids. Less in early years but more in later years. For EY1 ours starts at 450k a year for 1 and most expensive in 6th form 780k a year for 1. So most years between 900k to 1.56mn for two
So it's really more a lifestyle choice to remain in Thailand
The biggest killer for us in the UK is would on be the income side in the form of tax on your investments. Thailand wins hands down on that, and we pay very little tax on investments.
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AyG
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Post by AyG on Jun 8, 2018 18:09:10 GMT 7
- A decent school could be had for free. Whereas in Thailand you have to pay for an international school
- Cars more expensive here - Housing really depends on where you live. Both our condo and house cost more than my parents house in the UK. Mainly because BKK is the capital whereas my parents house in UK is way away from London
The biggest killer for us in the UK is would on be the income side in the form of tax on your investments. Thailand wins hands down on that, and we pay very little tax on investments.
Just a few brief, random thoughts: Decent state schools in the UK are far and few between. Education standards have dropped alarmingly over the last few decades. If I had a kid I wouldn't want him/her in the UK state system. When I left the UK I sold my London (Docklands), 3 bedroom, 3 storey townhouse for GBP 320,000. My 3 bedroom detached property on the fringes of Bangkok cost roughly half that and is both more spacious and has more garden attached. My house in Ayutthaya (4 bedroom, a bit less land) was even cheaper. The quality of my UK houses has undoubtedly been better than those in Thailand, but I definitely think Thailand provides better value for money. Council tax in the UK is ridiculously expensive. As for UK tax, I think VAT is far more pernicious than the income tax regime. 20% is outrageous. This really struck home when I booked an hotel in London for a few nights for a forthcoming trip to the UK. Hundreds of pounds to the government just because I need somewhere to put my head at night. In Thailand I know that what (little) tax I pay isn't being wasted on supporting economic migrants, the work shy, the lazy and the feckless. Can't say that's the case in the UK.
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FIREinTh
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Post by FIREinTh on Jun 12, 2018 8:27:52 GMT 7
Fletchsmile - Good points. School fees and cars are definitely two big things that are more expensive in Thailand. At least we have made educated choices to pay extra for those while benefiting from lower taxes here. It would be interesting to see how higher school fees and lower taxes would balance after a few decades or after spending most of your life here. For me, not having a government pension is huge, but I'm hoping with the lower taxes here the extra money I am able to invest myself will more than make up for it. With the way pensions are going back home it might be the smartest thing I've ever done. Where people really go wrong in Thailand is when they come here and survive hand-to-mouth teaching English and send their kids to government schools or low-quality English programs. Sad to see people who started at the top of the socio-economic ladder in the world end up with kids who start near the very bottom. rgs2001uk - To survive like a Thai, I think a retiree would need about 30,000B per month in Bangkok. But that's just surviving. More realistically, I would recommend at least 25,000 USD per year or close to 70,000B per month in Bangkok as a minimum. That would provide a bit of a buffer and allow for a trip home every couple of years. Using a modified 4% rule of 3.5% to give an extra safety cushion, a retiree would need at least a 750,000 USD portfolio (not counting any pensions). And like Fletch mentioned, that doesn't include paying for a decent school for any kids the retiree might have or wish to support in Thailand
AyG - Completely agree with you about not paying for other people who don't want to work. Yes, of course, some people have a bad start in life or have a mental illness, but I have a hard time paying for people who haven't worked as hard as I have or sacrificed as much as I have for work. There's a lot of homeless on the West Coast of North America who would rather do nothing while enjoying life on the water with the nicest weather in the continent than go up North or somewhere else inhospitable where they can easily find jobs. I had plan a to rent enough buses to give free transportation up to Northern Canada along with free accommodation for a few months for all the homeless in Vancouver. Up North, you could walk into any store and get a job on the spot, even restaurants couldn't get enough staff. After having a real job in -40 degree weather, I bet most of them would end up homeless back in the sunshine in Vancouver before the next summer.
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Post by rgs2001uk on Jun 12, 2018 21:45:05 GMT 7
^^^ your figures sound about right, thats from one who lives in Bkk.
From my years here, some observatons on the biggest mistakes peopole make.
1, not learning the language. 2, choice of partner. 3, related to #2, monthly stipends to partner. 4, thai ing up equity. 5, related to #4, building a farang mac mansion on pappas land in the jungle. 6, not thinking like a Thai, just about every thai/thai marriage I know of, the girl follows the guy, why is it in farang/thai marriages the farang follows the girl? 7, travel around Thailand, pick an area you can live in and marry a local, dont pick up some bargirl and follow her to the boonies. 8, have an exit plan or backup plan, and I dont mean the condo balcony. 9, get it through your head, Thailand was not, is not and never will be a cheap place to retire to. 10, there is more to Thailand than soi cowboy/nana plaza and soi 6, spend some time here and you will find plenty of women who dont need your money, they are single women past their thai sell by date, one across the road from me right now, she tells me, where am I going to meet a man, I dont have time, I am working all day, she owns the house she lives in, has a well paid job (about 80k per month).
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chiangmai
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Post by chiangmai on Jun 13, 2018 8:44:54 GMT 7
I'm not sure about number 4 above, this is going to vary from person to person, the amounts involved, their age and circumstances. Tying up equity in real estate is a reasonable way to avoid rent but of course, you need to understand any limitations associated with trying to cash in that investment.
I agree with number 8 that Thailand is no longer a cheap place to retire however it once was, there were some golden years when THB value was low and the Pound was high, large scale transfers made during that period would have seen a retiree set for life here.
FWIW I think one of the biggest mistakes that foreigners make here is thinking that where they are is representative of Thailand as a whole, as far as I can tell there are about five different Thailands out there based on where you live and many don't relate to each other.
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Post by rgs2001uk on Jun 13, 2018 21:02:57 GMT 7
^^^^ #4 above, , the stories I could tell you, right off the top of my head, rubber plantations, orchards, taxi firms, if we are talking about investing in the SET, I agree. As for cheap place, I will admit I remember the days of 38/40 baht to the pommie peso (pre 1997), I also concur, large scale transfers would set you up, the brutal truth is, most dont have the sort of money we are talking about. I also concur with your last para, what lifetyle do you want, choose the destination, off the top of my head I can think of the following places I could live easily, in no particular order, Bang Saen, Nakon Nayok, Chanthaburi, a little one buffalo town outside Petchabun called puu toei. One of the beauties of Thailand is cheap petrol, cheap guesthouses and cheap food, the mrs and I can do a road trip for less than 2000 baht per day. The common denominator no matter where I have been in Thailand that does relate is underfunded retirees. Was on a road trip last week, the topic of funding came up, guy told me he could afford to stay here even if the pommie peso went to 20 baht, then he added, why should I, I know what 4 thousand quid a month can buy me in the UK, I couldnt disagree with his logic.
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Post by rgs2001uk on Jun 13, 2018 21:29:27 GMT 7
Heres some stories for you, the sad fact is they aint stories but real life.
Guy invests 17 million baht in Pattaya, buys 3 condos at 5 million baht and a 2 million baht house (on the other side of the railway tracks, darkside I think they call it), can rent the condos out for 75,000 baht per month (yes I shit you not), great an easy 225,000 baht per month, I will have some of that. The reality, managed to sell on of the condos and the house, no profit made, lives in one condo, and the other is rented out for 20,000 baht per month if he is lucky.
Same city, guy buys three condos, live in one and rent out the other two, use the income to live on, both condos are empty and on the market.
Guy in his mid 50s hands in his notice to get his hands on his severance package from the company (two houses up in the boonies) kid has to go to an international school and he needs a house, only way to finance this is to get severance money, guy was on a decent wedge, now back in the Middle East at the bottom of the ladder for less money than he was on this time last year.
Guy retires out here at 60, going to live in a beach side town (not Pattaya) and play golf,lasted 5 years before the money ran out, lucky for him he has skills someone will pay a 66 year old guy for back in the ME.
The one thing these guys all have in common, 2 week millionaires.
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chiangmai
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Post by chiangmai on Jun 14, 2018 5:11:29 GMT 7
Yes, I agree with all of that, the multiple condo route is/was probably the least risky but even that can be dangerous, the rubber plantation is suicidal.
I put £100k into Baht fixed deposits a few years ago when the Pound was at 54, everyone said I was nuts by investing in THB, nobody thought it was a good idea. But if you spend baht, you need baht and all of that worked out really well....listening to the advice of others is really useful sometimes, often it's not, the source of the advice is the key and the expat community in TH is not known as a fountain of knowledge or wisdom.
I've organised my UK income to where I'm just under the Personal Allowance, my drawdown pensions have been suspended thus it will accumulate tax-free and will be inherited by my wife, our house in Thailand is in my wifes name and investments are in joint/her name, other deposits are incognito - I'm poor as a church mouse. I shall want nothing from the UK state during my 6 month visits but I'm also making sure they don't want anything from me, it's enough that I'm spending money in the UK economy which is what they've said they wanted me to do all along!
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