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What to do with 5,000,000 Baht?


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Thats probably the most sensible approach, as he as an appreciating asset back in the west. However for that idea to work he is reliant on good steady tenants, I have heard of some real nightmares experienced by people who have rented out property.

 

 

 

Alternatively I could invest your money for you, I am a licensed finacial advisor, I can guarantee you a return of at least 28% and the money is govt protected.

 

 

 

If you are interested PM me and we can talk.

 

 

 

STH

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Thank you for your replies.

 

 

 

It seems that the best route is to either search for a m.fund paying 10% or invest in some real estate in either Australia or Canada and use the rental income.

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STH: No offense, but "Alternatively I could invest your money for you, I am a licensed finacial advisor, I can guarantee you a return of at least 28% and the money is govt protected." Does seem a bit to good to be true. I've dealt with old european money management firms and their targets are 1/2 that and not guaranteed. Exceedingly large investment minimums but they are relatively liquid.

 

 

 

I only have a few contacts but if I had a bullet proof scheme to do that I'd be able to raise at minimum a couple $100 million at minimum and I could retire as a rich man in 1-year!!!

 

 

 

Wowzer:

 

 

 

Some excellent thoughts. Basically, I really haven't weighed in on the choicest investments. About bonds... While I agree with your sentiment, I've been saying we've been at historic lows for quite some time and the bond market should heat up. But I've been saying that for a number of years and I feel stupid after saying the same thing over and over again and the bond market doesn't do jack. I've taken my prediction hat off for the bond market.

 

 

 

Equities: I also believe that the US markets are fine and have very little downside left. Many (if not most) of my other friends tell me I'm an idiot though.

 

 

 

With the US "scandals" though I was waiting for something similar to be found in the European markets. Not something on the lines of an Enron, but more of an earnings correction like Xerox. But I haven't been paying to close attention to the news really.

 

 

 

Wish I knew more about real estate but it's been a long time.

 

 

 

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I am a bit surprised by the focus of the discussion in this thread with its emphasis on bonds, though there has been some discussion of property.

 

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I believe Elius is looking for current income now and therefore one must look at fixed income. Investing in a volatile equity market is not the best option. People thought we hit the lows 6 months ago and bulls are saying that we already hit the bottom last month even though every economic indicator, declining corporate revenue and tight lending by banks would indicate otherwise. Half of the major banking houses are predicting another Fed rate cut, I don't know about you but a Fed cut is not a bullish signal to me.

 

 

 

With the lump sums that Elius has putting a large percentage of money in a an equity mutual fund is not the wisest move. He would be better off buying an ETF and avoid the high fees of a mutual fund. We are not talking about an investor looking to draw his money in 20yrs. Overall a balanced portfolio weighted more toward income is in his best interests considering that he is going to live off of this money today. color=purple>

 

 

 

 

 

Bonds are incredibly expensive with yields at 40(?) year lows. Whilst yields might decline a bit further in the short term if the US economy weakens further (which does not seem likely as the economy seems to be picking up albeit at a slower rate than expected, and it is the stock market that remains weak) the highest probability is that rates will rise over the next few years and bond prices will decline thus wiping out large parts of any capital invested in bonds right now ? not a great prospect for Elius.

 

 

 

[color:purple] You are referring to certain classes of bonds that are expensive. Primarily treasury's agency, and muni paper. Corporate debt is ridiculously cheap because of credit quality perception and the large debt levels of corporations. You have investment grade companies with junk yields and junk paper with distressed yields. You would only lose your principal if you sell at a loss prior to maturity or the company defaults.

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I see little in your comments that anyone would disagree with, and certainly I?m sure none would disagree with your contention on the essentials of life, as in ?or to pay essentials like their mia noi?!!

 

 

 

I guess its all about the balance of risk and reward, and the level of security needed to sleep peacefully at night (no not another reference to a mia noi!).

 

 

 

For my part there are some things that just don?t cut it.

 

 

 

This includes suffering a significant penalty to have monthly/quarterly payments of income rather than annual payments.

 

 

 

I would not wish to see my capital substantially eroded as interest rates rise in the next few years.

 

 

 

I do not wish to draw out funds in Thailand from an ATM on a foreign bank account and get stiffed on the exchange rate and stiffed again with a 4% overseas withdrawal fee.

 

 

 

Life is dynamic and I would not wish to lock my funds in for the long term but to retain the flexibility to cash out and try/do something else or somewhere else as the mood or whim takes me. (I wonder how many posters can truthfully say that 10 years ago they could have predicted where they are today, doing what they are doing today, with the funds they have today and with the income they have today ? and of course with the mai noi they have, or has them, today!)

 

 

 

I, generally, subscribe to the perfect market theory and thus believe that ?Corporate debt is ridiculously cheap because of credit quality perception and the large debt levels of corporations. You have investment grade companies with junk yields and junk paper with distressed yields? is for a reason, and that reason is the associated risk ? recall that so far this year the default rate on European corporate debt is running at about 12% - albeit most of the default is telecoms companies who incurred massive debt when they were on a spending splurge and in paying the ridiculous prices for 3G licenses.

 

 

 

For Elius, who we are assuming is in/from the UK, the traditional risk free investment for retirees is to purchase an annuity. Annuity rates are seriously low (see www.williamburrows.com/rates for a calculator) and for example the maximum that a 50 year old man investing 5,000,000 Baht would get, with no guarantee and level payments, is about 300,000 Baht per year or 24,500 per month. And as DB said load tax, inflation, cost of living, etc. on top of that and living is going to get very frugal and very quick.

 

 

 

Which gets us back to Elius?s original question of

 

 

 

?I would like to settle down and control this money HERE and not worry about overseas bullshit. The last thing I want to do is go online at 8am every bloody morning to see how the market is doing!!

 

 

 

Any ideas on how to retire on this, or do I need to bring over the other 5, though I'd rather not.?

 

 

 

I think that the consensus of replies suggest that 5MM Baht is not really enough to retire on and live comfortably in Thailand, which is consistent with other threads that have posed a similar question. Even double that would result in a very modest lifestyle.

 

 

 

As for an investment in Thailand to fund retirement here there seem to be no ideas ? apart of course from Fly?s bar! ? but I expect there is already a queue of punters half way round the block waiting to take him up on that offer! (Having said that I don?t know why I scoff at the idea. One of the richer and more successful farangs I know of in Bangkok started from scratch with a bar and allegedly it now turns over more than $ 1 million a year.)

 

 

 

Investment in a condo here seems to regularly get a bad press (though again some have been successful, but no one has reported selling a condo after a few years and making the sort of major gain that has been the case in recent years in the US, UK and I understand in Australia ? though some Australian friends tell me there is a boom there too which many predict is a bubble about to burst).

 

 

 

Investment in property in the US or UK and living off the rental, and having an appreciating asset, sounds a really attractive idea. But the thought that one bad tenant can fuck up the whole scheme and buying in at what seems to be the top of a boom or the day before the bubble bursts is too much uncontrollable risk for me.

 

 

 

So I can only conclude that a mutual fund is the way to go. I don?t disagree with you that ?I believe Elius is looking for current income now and therefore one must look at fixed income. Investing in a volatile equity market is not the best option.? but I don?t see that his investment is large enough to generate sufficient of a low risk fixed income which will allow him to live a decent lifestyle. So he is going to have to take some risk to gain a higher reward. And of bonds equities and property the equity route, and thru a mutual to reduce the risk (maybe a no load fund), seems to be the most promising at the moment. Mix that with some fixed interest is probably the best way to go.

 

 

 

But that mix needs a good and trustworthy financial adviser, though like good tenants, they seem to be just as elusive.

 

 

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JJSushi:

 

 

 

I know this is going to seem that I am picking on you, but I just want to keep the dialogue factual.

 

 

 

"People thought we hit the lows 6 months ago and bulls are saying that we already hit the bottom last month even though every economic indicator, declining corporate revenue and tight lending by banks would indicate otherwise."

 

 

 

Actually, this is not quite true. Economic indicators are generally good. First time jobless claims continued to fall and are indeed near the 17-month low. The slope (or rate of decline) though has decreased.

 

 

 

CPI just release was low and stable.

 

 

 

Housing starts admittedly have decreased, but within the realm of a single standard deviation.

 

 

 

Productivity/employee in the past quarter increased while hours worked decreased. Still overall productivity output was positive.

 

 

 

Producer Price Index decreased.

 

 

 

Manufacturing and trade sales increased .3 from month to month and 1.2 percent from June of 2001 month to month.

 

 

 

Inventory rose 0.2%.

 

 

 

These statistics have come out in the past two weeks.

 

 

 

You also mention about tight lending. Many financial institutions have been caught off guard by Enron and Worldcomm. They have to set aside reserves to cover their butts so there is a short-term tightening of the lending market, but nothing so strict as of yet to indicate long-term tight fistedness.

 

 

 

Look at what the corporations say and what they show. The recent corporate factual data is overall positive. Meeting and exceeding street expectations. They are anticipating a short slowdown due to the effects of enron and worldcomm and the fact that it may have limited companies opportunities for raising capital, so growth is not expected to be as strong. So they say they have good numbers now but expect bad things in the future. This is managing market expectations to make the analysts come in with lowball estimates so when the data rolls in again, they will beat expectations and look good.

 

 

 

"Half of the major banking houses are predicting another Fed rate cut, I don't know about you but a Fed cut is not a bullish signal to me."

 

 

 

The last fed FOMC meeting was held last week on the 13th. They did NOT cut rates but held them at 1.75%. Yes there is talk about cutting rates at the next meeting but the jury is defniitely out on that one. If the banking houses were issuing such rate cut expectations I would expect the fed to have exercised their right last week to decrease rates.

 

 

 

Additionally, you have to look at alternative reasons why the Fed may cut rates. Financial institutions (including many pension funds) took a big hit with Worldcomm and Enron. Higher rates would hurt them on whole. Thus keeping low rates help out the financial institutions like banks, while limiting the losses with pension funds.

 

 

 

On the other hand I agree with you entirely about corporate investment grade paper. Unless you get caught up in a freaky like Worldcomm or Enron, it's your best bang for the buck with regards to relative safe risk.

 

 

 

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know this is going to seem that I am picking on you, but I just want to keep the dialogue factual. . .

 

 

 

Actually, this is not quite true. Economic indicators are generally good.

 

[color:purple]

 

gummi, I do not in the least feel you are "picking" on me. you are just expressing your opinion.

 

 

 

Let's talk about economic indicators. First they are lagging indicators and only tell you what has occured. Second, they are unrelaibe(as was shown when the Fed recently had to revise last years numbers and realized that the economy was worse off at the time than it was thought). Third economic indicators are always open to be interpreted. So you may think that they were good and others may think that they were bad. If interpretation was a simple good or bad then we wouldn't have economists being paid millions to interpret "Greenspeak"

 

color=purple>

 

 

 

Look at what the corporations say and what they show. The recent corporate factual data is overall positive. Meeting and exceeding street expectations. They are anticipating a short slowdown due to the effects of enron and worldcomm and the fact that it may have limited companies opportunities for raising capital, so growth is not expected to be as strong. So they say they have good numbers now but expect bad things in the future. This is managing market expectations to make the analysts come in with lowball estimates so when the data rolls in again, they will beat expectations and look good.

 

 

 

[color:purple]

 

The recent positve corporate data you view is not positive to me. I see declining revenues and profits being boosted by cost cuts and working down previous inventories. I see corporations having a heck of a time managing high debt loads and re-financing debt. I see revised numbers and earnings and stock prices being compared to the bubble era. A company revenue may have increase by 21% compared to the previous quarter but it is still down 90% from 2 years ago. IMO corporate America is telling us things are getting better but in reality they are not. There is still too much excess and sick players in the system.

 

color=purple>

 

 

 

The last fed FOMC meeting was held last week on the 13th. They did NOT cut rates but held them at 1.75%. Yes there is talk about cutting rates at the next meeting but the jury is defniitely out on that one. If the banking houses were issuing such rate cut expectations I would expect the fed to have exercised their right last week to decrease rates.

 

 

 

[color:purple]

 

When have you known Greenspan to follow the advice of the IB's? When he was raising rates they were calling for his head and when he was slashing rates they couldn't figure out why he was being so drastic.

 

color=purple>

 

 

 

Additionally, you have to look at alternative reasons why the Fed may cut rates. Financial institutions (including many pension funds) took a big hit with Worldcomm and Enron. Higher rates would hurt them on whole. Thus keeping low rates help out the financial institutions like banks, while limiting the losses with pension funds.

 

[color:purple]

 

I think you are over stating and exaggerating the cost and effect of the ENE and WCOM debacles to financial institutions. Many have reaped millions of dollars on the upside and downside of those companies. Many have also layed off their risk through the derivative markets. The ones who really suffered were retail stockholders, employees and institutions that bought the debt and common stock at the end. Plus the banks such as C, MS,JPM, GS made way more in fees and WCOM, ENE were such a small part of their overall earnings portfolio that the pain was minimal.

 

 

 

IMO if the FED cuts rates it will not be to save some pension funds. The reason will be based on the economy overall going to shit that even the debt laden refi-the house consumer can't spend it back into shape. The FED IMO is saving what little AMMO that they have left just in case the slow growth that they anticipate actually turns to no growth and we dip back into a recessionary environment.

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Just a quick reply as there were many good points in your post.

 

 

 

Yes, many of those economic indicators are lagging. And almost all the stats are subject to revision. But lets be real. You know the market is moved on these stats. When the revisions come out, the market moves on the revisions as well. The market doesn't ignore these indicators.

 

 

 

I understand your point of view about corporate data. Here we can agree with more clarification. Yes, maybe data isn't as great as it was, but it does't show a contracting economy. Just a slow (or very slow) growth. In my opinion though, still positive.

 

 

 

Rate cut: You were the one saying these banks were all looking for a cut, now you are telling me when does Greenspan follows these banks? If all the banks and financial institutions are pricing the market for a cut and Greenspan doesn't that calls for a very volatile trading day. That's why the FOMC leaks out it's intentions or ambiguity. To keep these "shocks" from the market, so yes, if everyone on the street (or all the banks) were looking (and thus pricing the market) as if for a rate cut then I would put my money on the fed cutting. Usually it's by how much, 25 or 50 basis points. But as DB aptly pointed out, there is very little room left.

 

 

 

As for Greenspan rapidly rising the the fed rate and then cutting drastically... I believe Greenspan took to much action to quickly. But this is open to interpretation as there are good arguments on both sides. Course I was at an IB so I am not particularly impartial.

 

 

 

Regards to Worldcomm and Enron. Yes it might be a bit of an overstatement but there is still an effect. You talk about the lending market and mix it up with IB's. IB's make most of their money from merchant banking, brokerage, and trading. Commercial banks are the guys who issue LOC's and participate in the pooled bank financial lending side (gah I forgot the terminology) blah blah blah. These are the folks who do the majority of the lending.

 

 

 

Yes, the retail folks are the one's who get hit the hardest on a personal basis but who where the primary paper holders? Wouldn't they be the institutional players (which include the large pension funds)?

 

 

 

As for derivatives... Yes, they can be used to offset risk, but this wasn't foreseen. When it was on screen it hit everyone's screen so the pricing for such hedges would have hit the roof. So I doubt they layed off their losses in the derivatives market as the market makers of derivatives are the most astute guys on the street.

 

 

 

As for Greenspan giving some assistance to the Pension funds (and I'm not saying saving)... It goes into public perception when folks see their portfolios take such a huge hit. They close their wallets and that really inhibits economic growth. It ain't the first time the fed has helped financial institutions either. Take a look at rates during the times of the S&L. The lending vs deposit rates were at extremely high spreads giving the financial institutions the breathing room they needed.

 

 

 

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Elius:

 

 

 

Is this the type of investing you want to do?

 

 

 

http://money.cnn.com/2001/08/29/investing/Zweig/index.htm

 

 

 

As for the guy promising to make a return of 28% on your money my only advice is run (the other way). P.T. Barnum said it many years ago, "There's a sucker born every minute".

 

Don't you be one of them. If you want to blow your money, go to a casino. At least you might have a good time.

 

 

 

As for renting out a house. My advice is forget it. I've read too many nightmares here in Toronto, of landlords having to wait months before they can evict deadbeats. If they have this problem while living here, how do you think you''re going to cope thousands of miles away. You don't need the headache.

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