FIREinTh
Crazy Mango
Posts: 85
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Post by FIREinTh on Aug 15, 2018 13:20:31 GMT 7
There's a blogger who likes to talk about how great life is retiring early in Thailand with $350,000 USD of only US dividend stocks which pay 3.5% per year.
I think that's way too close for comfort especially when you look at the USD-THB exchange rate since 2000 and dividend cuts during 2008. In just 8 years from 2000 to 2008, your income in Thai baht would have been cut in half. Combine that with Thai inflation and I think it's a recipe for disaster to try and retire in your 30's on that type of portfolio.
What do you think about that portfolio given how long it has to last?
What percentage of your portfolio would you recommend bringing into Thailand to protect against the exchange rate moving against you as well as local inflation?
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Post by Soutpeel on Aug 15, 2018 13:58:17 GMT 7
There's a blogger who likes to talk about how great life is retiring early in Thailand with $350,000 USD of only US dividend stocks which pay 3.5% per year.
I think that's way too close for comfort especially when you look at the USD-THB exchange rate since 2000 and dividend cuts during 2008. In just 8 years from 2000 to 2008, your income in Thai baht would have been cut in half. Combine that with Thai inflation and I think it's a recipe for disaster to try and retire in your 30's on that type of portfolio.
What do you think about that portfolio given how long it has to last?
What percentage of your portfolio would you recommend bringing into Thailand to protect against the exchange rate moving against you as well as local inflation?
Blogger or blagger ?...how old is said blagger ?...if a digitally pikey type, living the dream type, 20s to mid 30's said blagger is fking delusional with USD 350k @ 3.5% p.a....he will either run out of cash or end up living under a bridge eating mamma noodles in his late 50s 60s If blagger is already in his 60s then he might just make it on that amount... I have told the story before but a good friend of mine is a CA, a finanical fking whizz kid...many years ago when i was in my mid to late 20's he did some projections of how much one would need for a stress free retirement for people our age at the time, the number he came back with for me...as a lump sum...USD 1.9 million dollars....i said at the time he was taking bollox...its far less, but you know what, as the years have gone, i have filling the piggy bank getting closer to that day and doing the calculations/projects etc...the fker will not be far wrong, if Uncle Soutie intends early retirement between 55 and 60 and doesnt kick the bucket till his 80s say....now saying if i down scaled, cheap charlied etc, i would need far less...but i am assuming living exactly as i do now.. |
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FIREinTh
Crazy Mango
Posts: 85
Likes: 47
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Post by FIREinTh on Aug 15, 2018 14:32:28 GMT 7
Yes, said blagger is in his mid-30's. And he gives paid coaching for others to do the same thing...
The more money the better obviously, but I've come up with a similar figure for myself. 1.5 million USD would be very comfortable. Depending how much my future wife makes and how much school is for my future kids, I could probably make do with 1 to 1.5 million. The bare minimum I think is around 750,000 USD.
Blagger even has a post where he encourages people to retire here on 200,000 USD!
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Post by Fletchsmile on Aug 15, 2018 17:41:46 GMT 7
Sounds like the guy needs educating on finance matters rather than coaching others  Pity the people who are paying for his coaching. If $350k in US dividend stocks yielding 3.5% is his only income and he's aged mid-30's planning to continue that path then he's basically a disaster waiting to happen. 350k @ 3.5% x current exchange rate would be about THB 408k a year give or take, or THB 34k a month !!! On the positive side he's made a start and put a few hunded k USD away. On the negative side he has a very poor grasp of what financial independence means. There's some massive holes in his numbers: - Basic survival with a few niceties maybe but not quality: THB 34k a month for a single guy mid-30's. Wouldn't want to be living off that amount in real terms in Thailand for the rest of my life. Not exactly quality living independence. Survival maybe possible, but quality financial independence no. - Inflation: Being generous, if he's 100% in equities and lucky, the capital growth may keep pace with inflation, but he really shouldn't be budgeting for that amount to increase in real terms - Life Events: Get married. Have 2 kids, that 34k will go nowhere. Severely limiting his children's education opens. Think THB 60k to THB 150k per month for 2 children in international school. 2 children in a bilingual school maybe 20k per month upwards. So basically any kids would need to go to a Thai school for a Thai education - Life changes: Your pot should be able to finance changes in lifestyle. On that sort of money he'd be stuffed if he decided Thailand or another emerging market wasn't for him, and he tried to go back to the US or another developed market - Insurance: Ill-health etc. As he gets older even basic coverage from Thailand would eat a fair chunk of his income. Throw in wife and kids' cover and.... - Reserves: what sort of cash reserve does he have? - FX risk. USD vs THB. Crazy not to consider and assume current rates - Market risk: Market crash and dividend cuts could likely wipe him out, or force him to draw undesirable amounts from capital, severely affecting portfolio survival etc etc Could go on, but there are so many gaps. Could also expand the points in detail, but the gaps he has are so big that if he couldn't see that, there's little point Basically the guy might understand where he is now, but seems pretty clueless about the things that could happen in life. He's probably had a few good years on the US stock market, with a favourable USD story. Expecting that and his life to continue as is, just invites trouble |
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Post by Fletchsmile on Aug 15, 2018 17:47:24 GMT 7
Fletch's recommendation to him: Get real! Get a better education and understanding of finance, financial independence and life in general. Fletch's second recommendation to him: get a vasectomy Probably the best investment he could make if he really isn't going to educate himself about finances. |
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Post by Fletchsmile on Aug 15, 2018 17:55:06 GMT 7
Yes, said blagger is in his mid-30's. And he gives paid coaching for others to do the same thing... The more money the better obviously, but I've come up with a similar figure for myself. 1.5 million USD would be very comfortable. Depending how much my future wife makes and how much school is for my future kids, I could probably make do with 1 to 1.5 million. The bare minimum I think is around 750,000 USD. Blagger even has a post where he encourages people to retire here on 200,000 USD! He's way short on $350k and encouraging others to do so with $200k is just taking the p**s
Soutie's estimate of $1.9m and your $1m to $1.5m are much more realistic if that's what you are living off with no other income.
Depends on so many variables, wife and kids being of course a big factor. I'd go as far as to say though that $2m for a married guy won't necessarily be stress free financial independence. There will be times when markets crash and the shit hits the fan in different ways, where that sort of sum won't have removed all your financial worries every day of the year under any market and life conditions
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Post by Fletchsmile on Aug 15, 2018 18:06:12 GMT 7
... What percentage of your portfolio would you recommend bringing into Thailand to protect against the exchange rate moving against you as well as local inflation?
My rule of thumb when mid-30's was to aim to have about 1/3 of my assets where I came from (in case needed/wanted to go back), 1/3 in Thailand, 1/3 elsewhere off shore. It served me well.
Now I'm older, married and more likely to be committed to Thailand long term, I'm comfortable with more than half of my net assets here.
But it will also depend on how much you actually have in absolute terms in net assets vs what you need for financial independence. Once you've acquired that independence and retired, there'll be a lot of other variables including tax in its many forms. Once you've got that financial independence there can be a lot of arguments in terms of efficiency, to start holding outside Thailand the XS above what's needed for financial independence.
eg
if you think $1m is enough and you have $1m then maybe a third to half may suit you in Thailand
but if you think $1m is enough and you have $5m though, then you seriously have to ask why you're keeping more than $1m (what's needed) in Thailand. In that case $4m+ / 80%+ may be better offshore
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FIREinTh
Crazy Mango
Posts: 85
Likes: 47
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Post by FIREinTh on Aug 15, 2018 20:07:27 GMT 7
All excellent points Fletch! You nailed when you said he's only seen the recent bull market and is extrapolating recent returns over the next 60 years. Since he's only been investing since 2010, he's never seen his dividends cut and his portfolio drop by 50% at the same time. Part of his problem too is he hasn't even been in Thailand a full year. So to him, the Thai Baht has been stable. And we all know what your first year in Thailand is like. Everything is perfect and you can't stop telling everyone how happy you are. I really want to see what he writes 10-15 years down the road. He doesn't even have a proper visa! Good luck trying to stay on an education visa long-term. Crackdowns happen all the time. He's cut himself off from relationships back home and says he doesn't want kids. Again, 10 years in the future what's he going to think? While I do admire him 'taking the bulls by the horn' so to speak and doing it regardless of what anyone says, I totally agree he's in no position to give such destructive advice to others, especially charging for it! The only advice I'd be willing to pay for is a sneak peak at Southpeel's Ripple for DB-11 purchase plan  |
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FIREinTh
Crazy Mango
Posts: 85
Likes: 47
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Post by FIREinTh on Aug 15, 2018 20:14:43 GMT 7
... What percentage of your portfolio would you recommend bringing into Thailand to protect against the exchange rate moving against you as well as local inflation?
My rule of thumb when mid-30's was to aim to have about 1/3 of my assets where I came from (in case needed/wanted to go back), 1/3 in Thailand, 1/3 elsewhere off shore. It served me well.
Now I'm older, married and more likely to be committed to Thailand long term, I'm comfortable with more than half of my net assets here.
But it will also depend on how much you actually have in absolute terms in net assets vs what you need for financial independence. Once you've acquired that independence and retired, there'll be a lot of other variables including tax in its many forms. Once you've got that financial independence there can be a lot of arguments in terms of efficiency, to start holding outside Thailand the XS above what's needed for financial independence.
eg
if you think $1m is enough and you have $1m then maybe a third to half may suit you in Thailand
but if you think $1m is enough and you have $5m though, then you seriously have to ask why you're keeping more than $1m (what's needed) in Thailand. In that case $4m+ / 80%+ may be better offshore
Thanks for this. I'm going to keep it in mind as a rule-of-thumb as I try to balance maxing out LTFs/RMFs and sending extra savings out of Thailand. When my condo is paid off, depending on my life situation, I should be close to saving 75% of my salary and will need to keep an eye on allocations inside and outside Thailand.
Actually, it's an interesting mental transformation to go from just trying to save as much as you can and it's never enough, to saving so much you now need to monitor how much is going where.
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Post by rgs2001uk on Aug 16, 2018 21:30:34 GMT 7
There's a blogger who likes to talk about how great life is retiring early in Thailand with $350,000 USD of only US dividend stocks which pay 3.5% per year.
I think that's way too close for comfort especially when you look at the USD-THB exchange rate since 2000 and dividend cuts during 2008. In just 8 years from 2000 to 2008, your income in Thai baht would have been cut in half. Combine that with Thai inflation and I think it's a recipe for disaster to try and retire in your 30's on that type of portfolio.
What do you think about that portfolio given how long it has to last?
What percentage of your portfolio would you recommend bringing into Thailand to protect against the exchange rate moving against you as well as local inflation?
Key word here, blogger. Its the internet, you can be whatever you want to be, heck these shores are renowned for people reinventing themselves. However, lets not be so quick to diss the guy, he may well be astute enough to realise there is a market for this sort of stuff, and he has tapped into it, a sort of mother lode of cheap charlieism and digital pikery. Personally I think he is full of shit, that doesnt matter, there are others out there who believe and buy into it. Probably blogging from his mothers basement in some such paradise loaction as Boise Idaho. |
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Post by Soutpeel on Aug 18, 2018 6:13:19 GMT 7
There's a blogger who likes to talk about how great life is retiring early in Thailand with $350,000 USD of only US dividend stocks which pay 3.5% per year.
I think that's way too close for comfort especially when you look at the USD-THB exchange rate since 2000 and dividend cuts during 2008. In just 8 years from 2000 to 2008, your income in Thai baht would have been cut in half. Combine that with Thai inflation and I think it's a recipe for disaster to try and retire in your 30's on that type of portfolio.
What do you think about that portfolio given how long it has to last?
What percentage of your portfolio would you recommend bringing into Thailand to protect against the exchange rate moving against you as well as local inflation?
Key word here, blogger. Its the internet, you can be whatever you want to be, heck these shores are renowned for people reinventing themselves. However, lets not be so quick to diss the guy, he may well be astute enough to realise there is a market for this sort of stuff, and he has tapped into it, a sort of mother lode of cheap charlieism and digital pikery. Personally I think he is full of shit, that doesnt matter, there are others out there who believe and buy into it. Probably blogging from his mothers basement in some such paradise loaction as Boise Idaho. But to answer the question posed.. Can you retire in Thailand on $200,000?....yes provided your aged around 80 when one washes up on Thailands sandy beaches...5k away for ones cremation and spend the rest on whores, wine and song |
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Pity the people who are paying for his coaching.
