Mekong Posted May 20, 2008 Report Share Posted May 20, 2008 KP, Interesting thread, it is the eternal chestnut of a discussion that gets resurected every couple of years and probably the thread that should be taken most seriously not just by those of us contemplating eternity in Thailand but all of us contemplating a comfortable retirement. On another thread I made simple calcs, 375K EU @ 7% AER (the average return on safe offshore low rixk long term investment accounts) would return approx 109,500 THB, I may have implied take the 100K and reinvest the 9,500 (8.765%) to the Capital thus increasing it at a greater rate than indexed link inflation, I tried to keep the calculations simple to begin with As for retirement plans, this is probably the only thing outside of work and marriage I give serious thought to. The hyperthetical 375K is a pshycological landmark, I am not there yet but on schedule to be there well before mu sell by date. I took the risk by buying propery here in 98, weak baht and collapsing property market at the time, more odds on a return than betting on horses, I have never walked into a betting shop but I have seen many a guy crawl out! At 15% less than average rental costs 24 months of renting it out would return what I paid back then so overall not a bad risk (Drogon this was 10 years ago you have 13 years to catch up with me) UK Pension, now thats a joke, I cashed in my company pension to a private one when I was made redundant 20+ years ago paid into it for years and around '95 they said Non UK Residents cannot have Private Pension , rules are changing slowly though now the rule is you can take pension funds outside EU as long as you can demonstrate investments towards an alternative pension plan, someting to play with in the future as long as they dont change the laws in the meanwhile. The wife probably has more assets than me, that plot of land her grandfather bought 50 odd years ago in Nakon Nowhere and has been passed on and subdiveded over the generations will be slap bang in prime real estate area within the next 6-7 years, as Bangkok is expanding into the greenbelt areas now. The wife and I along with her sister and sisters husband who also have adjacent land, registered a company 4 years ago to combine the plots for future development, its an iron in the fire I may invest in sometime in the future if the circumsrances are correct, Combined Land is 20 Rai 10 mins drive from outer ring road in Rangsit. Retirement is about Goals, what does one want after escaping the rat race, a life at a lower standard a similar standard or a better standard? I know what I want and my hyperthetical 375K is only the first step survival level on the scale of what I want out of life, I have no ambitions of retiring and having my freedom years governed by a self imposeed budget, 35-55 are prime years dont waste them! Link to comment Share on other sites More sharing options...
The_Munchmaster Posted May 20, 2008 Report Share Posted May 20, 2008 If you retired with GBP 1 million in the bank' date=' which is about Baht 60 million, invested it at 5% and lived on about Baht 238,000 per month, you'd still have your original 60 million in the bank, 25 years later!! [/quote'] Actually 5 % of 60 million is 250,000 per month, but after 25 years that spending value of 250K would only be 105K Bt. Your other mistake made is that you assume that 5 % is a net revenue, without inflation. With inflation that is only 1.5 % ! or only 75K Bt per month to spend. Time to loose some weight. Fantastic Prasert, you're a genius, or maybe not? Where did I ever say that Baht 238,000 was 5% of Baht 60 million? Nowhere. All I said was, if you invested at 5% and spent Baht 238,000. Perhaps try reading posts properly before replying. :thumbup: I just did a bit of a fun calculation, which had an interesting result. Hence no mistakes, Mr Smartarse. Link to comment Share on other sites More sharing options...
zzzz Posted May 20, 2008 Report Share Posted May 20, 2008 I'm already on easy street -- I retired about 10 yrs ago at 50 with a nice pension that is indexed to inflation. Link to comment Share on other sites More sharing options...
samak Posted May 21, 2008 Report Share Posted May 21, 2008 it is very dangerous to calculate with 7% or even 5% average annual return as you can only get that with taking certain risks; look at all the retirement and 401k plans that have gone bust in 2001/2002! look at the current stock market where many stock have lost 50-70% of their values. my calculation is much more on the safe side. i would like to be able to spend each year 150k usd. multiply with the years until i would get 80 (life expectancy). therefore to retire with 55 i would need 3.75 million usd. but i could get older than 80! so i better get 5 million before i retire with 55! Link to comment Share on other sites More sharing options...
teddy Posted May 21, 2008 Report Share Posted May 21, 2008 You can get between 6.5% to 7% at a multitude of banks these days. That's not to say that interest rates will drop. How far are you on to achieving you $5m target?? Link to comment Share on other sites More sharing options...
samak Posted May 21, 2008 Report Share Posted May 21, 2008 good question! hahahaha! i have still a couple of years until i am 55 to achieve that but i am getting closer every year! last 3 years were pretty successful for my company and me and i could put 2/3 on savings; this year will get tougher! 6.5%-7% at a multitude of banks? any link what you are refering to; there must be some risks or small prints! Link to comment Share on other sites More sharing options...
Khun Prasert Posted May 23, 2008 Author Report Share Posted May 23, 2008 Fantastic Prasert, you're a genius, or maybe not?......snip......Mr Smartarse. nice informative post ! :thumbup: Link to comment Share on other sites More sharing options...
Khun Prasert Posted May 23, 2008 Author Report Share Posted May 23, 2008 Retirement is about Goals, what does one want after escaping the rat race, a life at a lower standard a similar standard or a better standard? I know what I want and my hyperthetical 375K is only the first step survival level on the scale of what I want out of life, I have no ambitions of retiring and having my freedom years governed by a self imposeed budget, 35-55 are prime years dont waste them! Thanks for the long reply, informative cos you write better than me :smirk: Yes, retirement is all about goals, not about fading away and passing out in a dark little corner. To each his plan and his goals, but retiring and doing with less is totally out of the question. I am 50 years old, wife is 35. If I retire in 7 years, and we both live untill 90, looking at family history and advances of medicine, we need to 'take care' of my wife for another full 48 years after we stop. that makes for a whole bundle of money ! Link to comment Share on other sites More sharing options...
Khun Prasert Posted May 23, 2008 Author Report Share Posted May 23, 2008 it is very dangerous to calculate with 7% or even 5% average annual return as you can only get that with taking certain risks; look at all the retirement and 401k plans that have gone bust in 2001/2002!look at the current stock market where many stock have lost 50-70% of their values. my calculation is much more on the safe side. i would like to be able to spend each year 150k usd. multiply with the years until i would get 80 (life expectancy). therefore to retire with 55 i would need 3.75 million usd. but i could get older than 80! so i better get 5 million before i retire % with 55! Is that net, without inflation ? Because we average 8.5 % average return before inflation, so we do about 5 % net if inflation is to be 3.5 %.EBC estimates it to be 3.2 % for 2008. Link to comment Share on other sites More sharing options...
samak Posted May 23, 2008 Report Share Posted May 23, 2008 smartarse again! i just assumed that inflation will eat up all annual returns and therefore divided saved amount by the number of years to live! Link to comment Share on other sites More sharing options...
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