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Post by Fletchsmile on Apr 18, 2015 10:50:48 GMT 7
I was talking to one of my friends at work recently, and that notorious question I've heard many times over the last few decades came up. How much would you need to retire? (Talking about Thailand of course). One of those "up to you", how long is a piece of string questions.
His answer surprised me a bit. He said 3 million USD.
What surprised me, this wasn't Naam counting his lose change he found with the fluff under the sofa, after spilling his port looking for his crystal ball, or Cheapcharlie who has been stashing it away for years. No this was a Thai colleague. Not only did he quote in USD, but the amount seemed quite high too.
OK so he does have 6 kids and a mia noi, (actually true), but even so.
His assumption: USD 3 million @ 3% return, mainly bonds and bank interest, would be USD 90k a year. That's around THB 240k to THB 250k a month, and he reckoned he could enjoy life on that.
So what do you think, what's your number, or income level you want/need/dream of/envy/wouldn't be seen dead without? Make any assumptions you want. Bear in mind, now you've found the Big Mango forum your entertainment bill should have gone down in the last 2 weeks, as all you need is a sense of humour and an internet connection. Plus factor in Cheapcharlieadvisor's tips he's been handing out for free.
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Deleted
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Post by Deleted on Apr 18, 2015 11:30:22 GMT 7
I could be happy on 60,000 baht a month
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Mosha
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Post by Mosha on Apr 18, 2015 12:02:40 GMT 7
Depends on lifestyle and where you live.
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SirToad
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Post by SirToad on Apr 18, 2015 13:27:14 GMT 7
It's all relative, and how long you plan on living.
I don't think 3 million U.S. is over the top, if you're looking at lifestyle. Would this include liquid or fixed assets.
Ideally, I'd like to have a monthly income that is equivalent to my final salary, if that makes sense, or certainy, have access to resources that would allow that
In the end, I have no idea what things will look like when I eventually retire, all I can do is try to plan ahead so I don't become destitute. The thought of relying on a state pension, scratching from one cheque to a next is not something I'd want.
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Krisb
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Post by Krisb on Apr 18, 2015 13:32:05 GMT 7
It would cost 5 million if I had it. Depends on the where you live and what you like deal.
My outlaws spend 10k a month and live comfortably.
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Post by paddyjenkins on Apr 18, 2015 16:53:50 GMT 7
My rule of thumb would be your yearly expenses multiplied by your remaining life expectancy plus five years of additional cash. I am simply assuming your investements, which have to be conservative, would match or exceed inflation, and that you will at some point buy an annuity so that living longer than expected becomes the risk of your annuity provider, not you. The additional cash pile is for very low risk income investments in case your other investments fall temporarily due to market cycles, to avoid having to sell at a loss. For example, government bonds or even just fixed deposits. I am not factoring in FX risks, so that is something you will need to build into your investments. So, if you need USD30k per year and are now 50 years old and have decided you want to stop work forever, say, then you would need USD1.05 million, if your life expectancy is 80 etc. Obviously if you dont invest conservatively and lose it all then bad luck, you may have to join the jumpers.
The person who said 3 million seems to have failed to factor in that he wont need any more money once he is dead and that inflation is the key to returns, not a fixed coupon. Id say most people just think what they need is what they have or think they will have if they save long enough, so if that person loses a million he will say 2 million is needed to retire, or if he makes an extra million then he will say 4 million. Very few people have any kind of analytic rationale that stands up to scrutiny.
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ATF
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Post by ATF on Apr 18, 2015 20:10:59 GMT 7
Living in Pattaya balloon chasing, driving a motorcycle with an angle iron sidecar, 69 Baht breakfasts an a 1500 Baht a month fan room can drastically reduce your expenses. CCA is the man.
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Post by Soutpeel on Apr 18, 2015 20:32:36 GMT 7
My rule of thumb would be your yearly expenses multiplied by your remaining life expectancy plus five years of additional cash. I am simply assuming your investements, which have to be conservative, would match or exceed inflation, and that you will at some point buy an annuity so that living longer than expected becomes the risk of your annuity provider, not you. The additional cash pile is for very low risk income investments in case your other investments fall temporarily due to market cycles, to avoid having to sell at a loss. For example, government bonds or even just fixed deposits. I am not factoring in FX risks, so that is something you will need to build into your investments. So, if you need USD30k per year and are now 50 years old and have decided you want to stop work forever, say, then you would need USD1.05 million, if your life expectancy is 80 etc. Obviously if you dont invest conservatively and lose it all then bad luck, you may have to join the jumpers. The person who said 3 million seems to have failed to factor in that he wont need any more money once he is dead and that inflation is the key to returns, not a fixed coupon. Id say most people just think what they need is what they have or think they will have if they save long enough, so if that person loses a million he will say 2 million is needed to retire, or if he makes an extra million then he will say 4 million. Very few people have any kind of analytic rationale that stands up to scrutiny. An old school friend who is a CA and reputed to be an around financial whizz kid did this "calculation" for me some years back and came up with around USD 1.9 million
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thailaw
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Post by thailaw on Apr 18, 2015 21:11:09 GMT 7
It is very difficult to get 3% after tax return on "safe" investments in the current market. That may change in the not too distant future. Even if you are willing to bring most of your money to Thailand (which I am not), earning an after tax 3% is a real stretch. I am retirement age but not yet retired. I have 2 school aged children in private international school. I need $150,000 after tax each year to "live comfortably" in Thailand, and enjoy a few of the finer things. Social Security will pay me (and my children) about $40,000 per year until I die and my kids reach 18. So, net, I need to generate $110,000 of income. I do not want to invade principal, so I need liquid, investable assets of $4 million, assuming an after tax return of 2.75%. Actually, by investing in relatively safe longer term (there goes the safety aspect) tax free municipal bonds I can generate more than a 2.75% after tax return (closer to 4%, which reduces the required investable assets to $2.75 million)), but, honestly, $4 million does not seem like near enough.
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SirToad
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Post by SirToad on Apr 18, 2015 21:51:04 GMT 7
Living in Pattaya balloon chasing, driving a motorcycle with an angle iron sidecar, 69 Baht breakfasts an a 1500 Baht a month fan room can drastically reduce your expenses. CCA is the man. Canarysun might have something to say, he's the King of Cheap
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The Arrow
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Post by The Arrow on Apr 18, 2015 22:02:32 GMT 7
It is very difficult to get 3% after tax return on "safe" investments in the current market. That may change in the not too distant future. Even if you are willing to bring most of your money to Thailand (which I am not), earning an after tax 3% is a real stretch. I am retirement age but not yet retired. I have 2 school aged children in private international school. I need $150,000 after tax each year to "live comfortably" in Thailand, and enjoy a few of the finer things. Social Security will pay me (and my children) about $40,000 per year until I die and my kids reach 18. So, net, I need to generate $110,000 of income. I do not want to invade principal, so I need liquid, investable assets of $4 million, assuming an after tax return of 2.75%. Actually, by investing in relatively safe longer term (there goes the safety aspect) tax free municipal bonds I can generate more than a 2.75% after tax return (closer to 4%, which reduces the required investable assets to $2.75 million)), but, honestly, $4 million does not seem like near enough. I really don't know how people do it. In Blighty I live on about £50 a week (excluding housing costs which are zero), car cost £3000 and I'll get five years out of it, running costs on that is around £2000 a year including fuel. In Thailand I can live (just me) on 50-100 Baht a day, house costs around 3500Baht a month to run all in. Scooter contraption uses 60 Baht a week in fuel. I mean there's other costs too obviously, like health care and wotnot. Where does the rest go? That's right. Dad! Give me get me I want. That's where.
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naam
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Post by naam on Apr 18, 2015 22:12:38 GMT 7
I could be happy on 60,000 baht a month i would be happy if it was only ฿60k/month. unfortunately (or perhaps fortunately?) my budget for 2015 (Thailand) is ~฿ 3.25mm/$100k p.a. / ฿270k/month. i refrain from answering the question "how much capital required?" because that would be equivalent to "how long is a piece of string?" as it depends on an actively managed portfolio, risk acceptance, income tax situation and last not least a little help from goddess Fortuna.
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naam
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Post by naam on Apr 18, 2015 22:20:35 GMT 7
It is very difficult to get 3% after tax return on "safe" investments in the current market. That may change in the not too distant future. Even if you are willing to bring most of your money to Thailand (which I am not), earning an after tax 3% is a real stretch. I am retirement age but not yet retired. I have 2 school aged children in private international school. I need $150,000 after tax each year to "live comfortably" in Thailand, and enjoy a few of the finer things. Social Security will pay me (and my children) about $40,000 per year until I die and my kids reach 18. So, net, I need to generate $110,000 of income. I do not want to invade principal, so I need liquid, investable assets of $4 million, assuming an after tax return of 2.75%. Actually, by investing in relatively safe longer term (there goes the safety aspect) tax free municipal bonds I can generate more than a 2.75% after tax return (closer to 4%, which reduces the required investable assets to $2.75 million)), but, honestly, $4 million does not seem like near enough. I really don't know how people do it. In Blighty I live on about £50 a week (excluding housing costs which are zero), car cost £3000 and I'll get five years out of it, running costs on that is around £2000 a year including fuel. In Thailand I can live (just me) on 50-100 Baht a day, house costs around 3500Baht a month to run all in. Scooter contraption uses 60 Baht a week in fuel. I mean there's other costs too obviously, like health care and wotnot. Where does the rest go? That's right. Dad! Give me get me I want. That's where. these four ladies who work for you in Walking Street charging ฿ 3,000 a pop are a definite advantage and should cover all your remaining expenses.
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The Arrow
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Post by The Arrow on Apr 18, 2015 22:23:56 GMT 7
I really don't know how people do it. In Blighty I live on about £50 a week (excluding housing costs which are zero), car cost £3000 and I'll get five years out of it, running costs on that is around £2000 a year including fuel. In Thailand I can live (just me) on 50-100 Baht a day, house costs around 3500Baht a month to run all in. Scooter contraption uses 60 Baht a week in fuel. I mean there's other costs too obviously, like health care and wotnot. Where does the rest go? That's right. Dad! Give me get me I want. That's where. these four ladies who work for you in Walking Street charging ฿ 3,000 a pop are a definite advantage and should cover all your remaining expenses. You got me! I've managed, somehow, to set up a fairly stable situation in LOS. . . against the odds. Low cost yet happy and comfortable and above all sustainable. Simple country boy.
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Post by bigbadgeordie on Apr 19, 2015 10:08:15 GMT 7
I spend very little on myself as I spend my time meditating or reading religious texts.
I need only water, rice with nam pla to sustain my body.
I do however get an excellent pension from HM Paymaster General, which I do not spend on myself. I prefer to help others less fortunate than myself. So in the evenings I redistribute my money to hard up bar owners and bar girls who are down on their luck.
I ask for nothing in return for this gesture as all the beer and sex I get in return is more than enough thanks.
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