exit2dos Posted October 17, 2006 Report Share Posted October 17, 2006 Than theres the tax on the interest. (30% ?), 500K, in the bank, seems to be on the border line of living okay or not. Guys, in Bkk, live on $1000. a month, Social Security benefits, quite well. Studio apartment, drinks, buffets, a girl now and than. You'd be picking up cans, in the US, with that income, to survive. Link to comment Share on other sites More sharing options...
exit2dos Posted October 17, 2006 Report Share Posted October 17, 2006 Your income, from the bank, is taxable. Maybe 30%. If you don't mind, what is the name of the bank offering 6.6% ? Link to comment Share on other sites More sharing options...
zzzz Posted October 17, 2006 Report Share Posted October 17, 2006 6.6% is a good return on your money so I would leave it there' date=' unless you have a track record of making money investing. At 47, $500,000 is not a lot to live off for the rest of your life. Do you also have a pension? Assuming you live to be 65 -- which is about the average life expectancy of a hard life punter [if you're optimistic, that is'] you would only have about $28,000 per year to spend in today's dollars. [i hope you are not talkin' AUS dollars.] Maybe you can start a business (risky) or get a job (yikes!) in LOS. ??? $500,000 x 6.6% = $33,000 interest only. Never touching the Principal. Divided by 12, months in the year, $2,750 per month. Actually more, if taken on a month to month basis, slighly more in interest, each year. If you can live on that, you'll be fine. In today's dollars: 65 yrs - 47 yrs = 18 yrs, $500,000/18 yrs = $28,000/yr. Your numbers relate to the future, which should include other factors such as inflation, taxes, devaluation, etc. Link to comment Share on other sites More sharing options...
kojis Posted October 17, 2006 Report Share Posted October 17, 2006 "If you don't mind, what is the name of the bank offering 6.6% ?" same question here,seems like a rather high return for a riskless small investment. Link to comment Share on other sites More sharing options...
kojis Posted October 17, 2006 Report Share Posted October 17, 2006 2M cash does sound fine to retire in Thailand at the moment though, if one feels like retiring. Link to comment Share on other sites More sharing options...
samak Posted October 17, 2006 Report Share Posted October 17, 2006 "If you don't mind, what is the name of the bank offering 6.6% ?"same question here,seems like a rather high return for a riskless small investment. the OP states he is from Australia. there is currently significant higher interest rate on the AUD (maybe also a higher risk to loose value versus the THB)... Link to comment Share on other sites More sharing options...
jai-dee Posted October 18, 2006 Report Share Posted October 18, 2006 The lack of imagination when it comes to money matters always amazes me. Here we are talking about a largish lump sum being wasted parked in a bank account. 500k USD = 664k AUD. At 6.6% the annual interest is 43,824. (This is actually less than the average australian earnings of 54,163) Income tax on that is 8,497, leaving after tax income 38,177. The value of the capital will be eroded by inflation, let's say 3%. In other words, inflation is going to eat the initial sum at the rate of about 20,000 per annum. In 14 years after tax annual income would be worth 19,515 in today's currency. In 28 years it would be just over 10,000. The very least the OP could do is to use the money to buy the shares of his bank. This way his capital will not only be protected from inflation but will most likely grow in real terms, plus he'll be getting fully franked dividends of 7-8% (pre-tax). In addition he can write options against the shares and make a few percent on top. As for the safety of the investment, a bank deposit is only as safe as the bank itself. If you expect the bank to be paying you interest in 20 years time then most likely it will still be paying dividends. Just for example, compare the share proces of the 4 major australian banks 14 years ago and now: worth: 14y ago now CBA 6.42 47 ANZ 2.50 28 WBC 2.50 23 NAB 7 38 And the dividends grow too, here is comparison: 14y ago now CBA 40 224 ANZ 20 115 WBC 24.5 107 NAB 46 160 At this rate 664k invested in ANZ today would grow to 7.3 million in 14 years (not even counting the dividends). And 6.6% of that would be - 482,000 per annum. Now that's what I call a decent retirement income. Of course a much better solution would be to talk to a good financial advisor, tell them your objectives, acceptable risks etc. and let them invest your money. When I temporarily had 200k in my bank account, every time I made the transaction they looked at the balance and asked: "What are you doing with all this money, can I make you an appointment with our investment advisor?" Then of course there's superannuation, allocated and complying annuities, which are treated more favourably terms of tax and social security benefits. Disclaimer: I made a lot of assumptions and I pulled some figures out of memory so don't quote me if they are not 100% accurate. Link to comment Share on other sites More sharing options...
rickfarang Posted October 18, 2006 Report Share Posted October 18, 2006 My financial advisors are saying that the next year is going to be a rough one for equity investments. They say that we are in the "euphoric" part of the equity price cycle, where prices are increasing rapidly, but that sometime in the next year, there will be a downturn, and it will be better to have my money in more conservative investments. Per my advisors, now the greater part of my investments is in very boring and low yield funds, most in Certificates of Deposit, and government funds. I was interested to learn from a lecture that if you stick with one kind of investment -say bonds or blue chip stocks, that averaging the good times and the not-so-good times, over the long run, you will get aroundn 4% to 5%. Knowing when to switch between styles of investment can make a big differnce, and of course compounded over a few years, 5% looks a lot better than 4%. Right now, the smart money is in conservative investments bonds (or so I was told.). Where did you get 6.6%? Incidnetally, there is no such thing as retiring permanently in Thailand, even for permanent residents. Keep one foot in your home country. You will have to scrimp by until your Social Security or other retirement fund(s) kick in, but I believe $500k is enough if you are very, very disciplined and are lucky Rick Link to comment Share on other sites More sharing options...
gobbledonk Posted October 18, 2006 Report Share Posted October 18, 2006 Hi All, Looks like we are back to the old 'magic number' post, wherein we all become magnificent fund managers and mathemagicians with someone elses money :smirk: Ultimately, it all comes down to a leap of faith : USD 2 million wouldnt be enough for those of us who dont have enough faith in our ability to make that leap, and USD 300K may well be sufficient for someone who is prepared to accept that teaching English (or whatever) isnt going to be a well-paid profession in Thailand (apologies to independantly wealthy English teachers everywhere). As I've said before, it also comes down to whether you want 20-30 mediocre years or 10 fantastic years (!), but thats probably a decision better left for our mid-fifties to early-sixties : your mileage may differ. Cheers, Artie PS The thing I find extremely difficult about making 30-year projections is that there are simply way too many variables : even 10 seems like a big ask when you look at the pace of change in many parts of the world in the last 10 years. Hindsight is a wonderful thing - foresight is a considerably tougher proposition. Link to comment Share on other sites More sharing options...
Cyberoy69 Posted October 18, 2006 Author Report Share Posted October 18, 2006 For those who asked, the bank that offers 6.6% is Bankwest, in Australia. It is an at call, internet account, whooly owned by A big UK operation called HBOS. Anyhow, many thanks for all the input, some good ideas, however i think i will buy a smaller property and rent it, as a hedge against inflation, currency depreciation etc, and keep a float of say 150 to 200k for "play money". Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.