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Allow me to introduce myself
Old 06-08-2006, 06:12 PM   #1
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Allow me to introduce myself

Hello Everyone:

* * *Allow me to introduce myself.* I chose the name eyenitnoy, which is Thai for " little bit shy".* You remember that quiet, nerdy guy back in high school?* You know, the fellow who looked kind of funny and was too shy to ask a girl to the prom.* Yep, that's me.* ** Well, high school is long since behind me now.* I am 40, a life long science guy and working in a well paying job.* I have been doing the job for years and although I am good at what I do I hate it.* What was once fun and interesting is now a chore.* I am burned out, burned up and worn to a nub.* On a whim I travelled abroad a few years back and fell in love with Asia. I decided that living a simple life outside of the U.S., likely in a wonderful city called Phuket,* was for me.* I am just so tired of life here in the U.S. sometimes I want to scream.* In Phuket I can sit on a beautiful beach under an umbrella and read from sunrise until midnight if I want.* I can fish, which I have taken a liking to.* I can live in a beautiful home (playing computer games whenever I want! ), very inexpensively and I can eat well cheaply.* The dollar goes a lot farther, it seems, in Asia than it does here.* And coming from a northern climate I just love the thought of living on a tropical beach.* It will be a dream come true.

* * *So, I have been working hard to get to the point where I can quit.* I have projected that while I could probably manage pretty well on as low as $1,000 per month, my minimum target for retirement is $3,000 per month.* I plan on drawing 4% of my nest egg in year one, in accordance with the conventional wisdom of such things.* I then plan to adjust my draw not on the rate of inflation, but by increasing the draw percent by 1/10 of one percent per year.* Thus, in year two I will draw 4.1% of the nest egg, in year three 4.2% of the nest egg and so on.* My annual budget will, therefore, fluxuate based on the performance of my investments.* I may have "feast or famine" years where my potential to spend greatly increases or decreases based on the performance of my investments.* This should not be a problem because I expect that my starting monthly income is going to be far higher than the minimum I need. I might never spend the 4% in year one and I might not need all of the increases that would be available as my draw percentage increases.* Thus, I can cut back if needed in down years if I had to.* I currently am single, I have no children and I do not want to leave any money behind when I depart this earth. (Fermilab will get any leftover cash if I die an untimely early death.)* I project that I will reach my savings goals by the age of 46 or 47.* Currently I am well on my way as I have no debt, mortgage or otherwise.* I own my condo free and clear and I am currently saving over 50% of my net income. (I told you I wanted out of that job! *) My investments are pretty much all in the stock market.* I hate studying stocks, investments and all these sorts of things. (Sorry, I do not mean to offend, I am sure several of you are probably into this sort of thing.)* Because of my dislike of financial stuff, I have placed all my money in Vanguard mutual funds, choosing five index funds into which I put my money. (Total Market, Small Cap, Mid Cap, Emerging Market, World, and yes, I am messing up the fund names I think.)* All and all, I am pretty satisfied with the way things are going.* But I did want to put forth a couple of questions relating to issues that I have been pondering.* I hate being too pushy with questions,* so, sorry in advance.

1) Does my methodology of increasing the draw % make sense?* I have never been comfortable with the idea of indexing withdrawls for inflation.* My inflation-the inflation on the goods I use-may not be well reflected in the C.P.I.* By increasing the % by 1/10 per year it is my hope that the amount I draw will increase over time.* If I don't spend the money, it can keep growing. (I won't spend just for the sake of spending.)* And if I need to cut back because my draw percent is not covering my expenses, then I do some belt tightening.* I am comfortable with the idea of cutting back if need be.* And while I certainly do not want to outlive my money, I want to run out of money at some point in the future and not leave a massive chunk of money behind.

2)* When I look at the 4% draw, should I correct that number?* Here is what I mean.* The expense ratio on my investments is about .35%.* When I decide to draw my funds, should I draw down in year one 4% of the nest egg to stay in line with the conventional draw recommendation or should I correct that by the expense ratio of my mutual funds?* After all, by my thinking, some of my potential "draw money" is being eaten up by the expenses of the fund.* I am paying the fund managers just like I am paying the cook at the restaurant.* I count the money I pay the cook in my budget, why should I not count the money I pay the fund manager? (That's why I chose Vanguard, by the way.* The funds are cheap.)* If I make the correction, then the draw in year one would not be 4%* The draw would be 4%-(expense ratio percent.)* What do you think?* Is this correction needed?

3) Annuities.* As you can see from my current portfolio, I am 100% in stocks.* I am comfortable with that, but I know I probably at some point should have some bond exposure in the funds.* My thought, however, was to consider getting a low cost annuity.* I can buy an inflation indexed annuity that would pay me $1,000 per month with a portion of my assets.* My thinking is that this could act as the "fixed income or bond" portion of my portfolio and act as my income floor.* I could then keep all of the rest of my money in stocks (except for 2 years of living expenses I plan to keep as cash) for the long term growth.* I have investigated some low cost annuities-trying to avoid the many fee landminds in annuities-and I like an inflation indexed annuity product I have found through Vanguard.* Again, what do you think of this?* An additional advantage to an annuity that is indexed to inflation is that in the event I live to be 100, I will still have cash flow.* If I increase my draw percent (assuming I actually spend the money available from the draw percent) and live 50 years I will deplete my next egg.* An annuity and whatever I get from Social Security (I have been paying in the maximum amount for several years) would act as a safety net if I live to be a very, very old age. What do you think?

* * *Again, I am sorry for all the questions and I am sorry for this very long post.* I still have a few years to go until the big day, but I want to be well prepared.* I have talked to financial professionals about these questions and I have not received a satisfactory answer.* I have been disappointed, overall, with the amount of knowledge I have been able to extract from the various professionals to whom I have spoke.* I myself and am just a novice and doing the best I can pretty much on my own.* I am saving a lot of money and mainly I just want to avoid any big mistakes.* Any input, whether related to my specific questions or to other observations you may have, are certainly appreciated.

* * *Thanks for your time.* It is very nice to meet you all and I wish you all the very best in retirement and in life.* Take Care.

Best Regards,
Eye* * *
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Re: Allow me to introduce myself
Old 06-08-2006, 06:48 PM   #2
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Re: Allow me to introduce myself

Welcome to the board, Eye! If you haven't already, you should strike up a Thailand conversation with the Kaderlis (http://www.retireearlylifestyle.com/) and with Ben & Lance. All four have extensive in-country experience and the Kaderlis have a CD for sale.

Quote:
Originally Posted by eyenitnoy
1) Does my methodology of increasing the draw % make sense?* I have never been comfortable with the idea of indexing withdrawls for inflation.* My inflation-the inflation on the goods I use-may not be well reflected in the C.P.I.* By increasing the % by 1/10 per year it is my hope that the amount I draw will increase over time.
Yes. If you start at 4.0% one year and draw 4.1% the next, the additional 0.1% withdrawal is the equivalent of raising your initial 4% withdrawal by 2.5%. The CPI has averaged about 3% over the last century (about 5% over the last 30 years) so your 2.5% annual increase should work fine, be conservative, and give you plenty of room to catch up if necessary. Your "personal inflation" may be higher or lower than the CPI but if you're starting in Phuket then it'll probably be lower. I guess that depends on what you're fishing for.

Quote:
Originally Posted by eyenitnoy
2) When I look at the 4% draw, should I correct that number? Here is what I mean. The expense ratio on my investments is about .35%.
The study that came up with 4% wasn't trying to narrow it down to two significant decimals. FIRECalc assumes that all taxes & fees are paid out of that 4% withdrawal so you could take out 4.35% to make sure that you have full use of your 4%. However it's not that precise... for example read Bob Clyatt's "Work Less Live More" for a slightly more complicated system that gives you more variability. So you could do it or blow it off and you probably won't notice the difference. Some years you may replace expensive capital goods (like a new car) and spend 4%, other years you may have a cheap year and spend less. 0.35% probably isn't very significant either way.

Quote:
Originally Posted by eyenitnoy
3) Annuities. As you can see from my current portfolio, I am 100% in stocks. I am comfortable with that, but I know I probably at some point should have some bond exposure in the funds. My thought, however, was to consider getting a low cost annuity.
Touchy subject-- search the board for the keyword "annuity". If you're doing your own shopping around Vanguard then you'll probably find the best prices available, but you are paying a price for the security of insuring a reliable cash flow. If you want more money, do it on your own. If you want more security/reliability, then an annuity will give you what you pay for.

You would have bond exposure if you want to reduce volatility. If you're comfortable with your current portfolio volatility then I wouldn't mess with bonds. If you want to avoid selling stocks during a bad bear market then you could carry a few years' expenses in cash (money markets & CDs) without having to own bonds or annuities. A more detailed discussion of these concepts is in Bill Bernstein's "Four Pillars" book.

You may find out that the boost to your portfolio afforded by Social Security will give you enough of a reliable cash flow to render an annuity unnecessary.

Quote:
Originally Posted by eyenitnoy
I have talked to financial professionals about these questions and I have not received a satisfactory answer. I have been disappointed, overall, with the amount of knowledge I have been able to extract from the various professionals to whom I have spoke. I myself and am just a novice and doing the best I can pretty much on my own. I am saving a lot of money and mainly I just want to avoid any big mistakes.
Yup, that mirrors the experience of the majority of posters here. Many financial advisors are more rewarded for selling products than they are for becoming educated on them, or for spending their time educating us.

To be fair, a truly educated financial professional would have to be an expert on a wide variety of investments & portfolio-withdrawal plans. Their knowledge can end up being a mile wide and an inch deep. You have the time & motivation to become the world's foremost expert on your own portfolio & preferences without having to waste your time learning all the other stuff, so you can become an inch wide and a mile deep. You'll be a lot better rewarded for your efforts, too.
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Re: Allow me to introduce myself
Old 06-08-2006, 11:06 PM   #3
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Re: Allow me to introduce myself

Welcome eyenitnoy, given the following parts of your post

Quote:
Originally Posted by eyenitnoy
* * *So, I have been working hard to get to the point where I can quit.* I have projected that while I could probably manage pretty well on as low as $1,000 per month, my minimum target for retirement is $3,000 per month.* ...
I currently am single, I have no children and I do not want to leave any money behind when I depart this earth. (Fermilab will get any leftover cash if I die an untimely early death.)*...
I hate studying stocks, investments and all these sorts of things. (Sorry, I do not mean to offend, I am sure several of you are probably into this sort of thing.)* Because of my dislike of financial stuff, I have placed all my money in Vanguard mutual funds, choosing five index funds into which I put my money. (Total Market, Small Cap, Mid Cap, Emerging Market, World, and yes, I am messing up the fund names I think.)* ...

3) Annuities.* As you can see from my current portfolio, I am 100% in stocks.* I am comfortable with that, but I know I probably at some point should have some bond exposure in the funds.* My thought, however, was to consider getting a low cost annuity.* I can buy an inflation indexed annuity that would pay me $1,000 per month with a portion of my assets.* My thinking is that this could act as the "fixed income or bond" portion of my portfolio and act as my income floor.* I could then keep all of the rest of my money in stocks (except for 2 years of living expenses I plan to keep as cash) for the long term growth.* I have investigated some low cost annuities-trying to avoid the many fee landminds in annuities-and I like an inflation indexed annuity product I have found through Vanguard.* Again, what do you think of this?* An additional advantage to an annuity that is indexed to inflation is that in the event I live to be 100, I will still have cash flow.* If I increase my draw percent (assuming I actually spend the money available from the draw percent) and live 50 years I will deplete my next egg.* An annuity and whatever I get from Social Security (I have been paying in the maximum amount for several years) would act as a safety net if I live to be a very, very old age.* What do you think?
I think an annuity will work very well for you.* There are many posts on this board (some are heated) that discuss annuities and you will find that few people posting on this board think much of them but I think that for someone like you (again refering to my quote from your post) an annuity will fit very nicely.* The way you propose to use it, it will provide a stable income flow for your minimum lifestyle.* Because of this it will allow you to pay less attention to the financial stuff you dislike.* And you are correct in that it also acts like the "fixed income or bond" portion of your portfolio.

Quote:
Originally Posted by eyenitnoy
* * * I plan on drawing 4% of my nest egg in year one, in accordance with the conventional wisdom of such things.* I then plan to adjust my draw not on the rate of inflation, but by increasing the draw percent by 1/10 of one percent per year.* Thus, in year two I will draw 4.1% of the nest egg, in year three 4.2% of the nest egg and so on.* ...

1) Does my methodology of increasing the draw % make sense?* I have never been comfortable with the idea of indexing withdrawls for inflation.* My inflation-the inflation on the goods I use-may not be well reflected in the C.P.I.* By increasing the % by 1/10 per year it is my hope that the amount I draw will increase over time.* If I don't spend the money, it can keep growing. (I won't spend just for the sake of spending.)* And if I need to cut back because my draw percent is not covering my expenses, then I do some belt tightening.* I am comfortable with the idea of cutting back if need be.* And while I certainly do not want to outlive my money, I want to run out of money at some point in the future and not leave a massive chunk of money behind.
Another W/D methodology that might be of interest to you would be some variation of Gummy's Sensible Withdrawal (found at http://www.gummy-stuff.org/sensible_withdrawals.htm ) where you would always take out a minimum W/D (some or all of which could come from your annuity) and in years that your portfolio increases W/D some percentage (even up to 100%) of the increase in portfolio value.

Quote:
Originally Posted by eyenitnoy
* * *Again, I am sorry for all the questions and I am sorry for this very long post.* I still have a few years to go until the big day, but I want to be well prepared.* I have talked to financial professionals about these questions and I have not received a satisfactory answer.* I have been disappointed, overall, with the amount of knowledge I have been able to extract from the various professionals to whom I have spoke.* I myself and am just a novice and doing the best I can pretty much on my own.* I am saving a lot of money and mainly I just want to avoid any big mistakes.* Any input, whether related to my specific questions or to other observations you may have, are certainly appreciated.
No appologies necessary.* Often when some one asks a question they don't provide enough info to give an intelligent answer.
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Re: Allow me to introduce myself
Old 06-09-2006, 07:34 AM   #4
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Re: Allow me to introduce myself

Hello Nords and jdw_fire:

* * *I thank you both for taking the time to respond to my post and for the excellent information that your posts provided me.* Nords, your replies to my specific points was very informative and I liked the link that you gave to the site on Thailand.* I also will hunt for the four pillars book that you mentioned.* Jdw, I also very much appreciate the link that you gave me.* I found the concept proposed regarding how to go about withdrawing money interesting.* I don't know that I shall adopt it, but it is very interesting. I also liked the calculator.* *When I plug in numbers I find that I get a lower starting draw percent than 4% and this was a conclusion that I was leaning to already based on aspects of my own situation that I shall describe below.* Your comments about annuities were also very encouraging.* I recall once talking to a financial planner and mentioning the word annuity.* Before I could even go into any detail he dismissed it out of hand and proceeded to try to talk me into buying a financial product that he was selling.* I remember he talked about high costs and fees with those dreadful annuitites-he then proceeded to try to sell me an even higher costing fee filled product. (I read fine print.)* I may be dumb when it comes to investing, but I am not stupid.* I walked away.* I appreciate the open mind that both of you have and I once again thank you both.

* * *I am starting to think that perhaps the 4% draw rate in year one might be too high.* My foundation for this deviation from the convential wisdom of draw rates is based upon one aspect of my situation that is different from those who are not planning on living abroad.* This deals with inflation.* As I mentioned in my origional post, I feel that the C.P.I. will not accurately reflect my own inflationary pressures.* Living abroad means that I will have two aspects of "inflation" to deal with.* One aspect is the obvious one, that is, the increase over time in the price of goods and services.* The second is a bit more subtle.* It is currency changes which, to my mind, act exactly the same as inflation.* Part of my financial plan-and feel free to critique it if you feel I am off base-is that over time I project that economies in Asia will grow at a faster rate than those in the U.S. (thus I have more foreign stocks in my portfolio) and that, over time, the dollar will drop in value relative a basket of Asian curriencies.* And, by my thinking, if the dollar goes from being worth 40 baht (the currency of Thailand) to 36 baht I have just suffered the equivalent of 10% "inflation" assuming of course that my investments are denominated in dollars.*

* * *This assumption-that all my investments are denominated in dollars-is not completely true however as I have, to solve a different problem altogether, hedged my currency risk to a degree.* To cover my "healthcare problem" I have allocated some money to investments in Thailand that are kept in a Thai growth mutual fund, denominated in Baht and not dollars.*(I did not mention this in my main post because this is my healthcare reserve and I did not want to overly complicate or lengthen the post.* I am sorry.)* The fund has done very well over the past few years, although it's fees are way too high.* I have an expense ratio of 1.9% on this mutual fund which is way, way too high.* But I tolerate it because the bank that I use for the fund (my bank, Kaisikorn Bank, has an arm that offers a variety of mutual fund products which banks can do in Thailand) does not offer any index funds.* And the purpose of keeping this money in Thailand is so that I have a pool of money that I can access relatively easy to pay for my future healthcare costs.* Healthcare in Thailand is cheap and the private hospitals are excellent. (A big factor, by the way, in my selection of this country.)* I decided when I first started my retirement plan to allocate about 10% of my savings for healthcare and to couple that with a high deductible castostrophic medical plan in the U.S. (through my professional society) and a low cost Thai based insurance plan (through Blue Cross Blue Shield which has a Thai based plan and runs about $1,000 per year, it does not cover motor vehicle related injury costs or S.T.D.'s neither of which I plan on having! I don't drive and I don't fool around.).* Together, with the large chunk of my portfolio set aside for healthcare-about 10%-and the two different healthcare insurance plans, I should be well covered for my medical expenses.* People I know laugh at me for how I worry about healthcare.* I have no medical conditions, I do not smoke, drink or engage in any other excesses.* I do not excercise like I should-that is on my "things to do list"-but I am pretty healthy.* But I know better than to ignore the wheels of time.* Some day I will be glad that I planned my healthcare carefully.* But I digress.

* * *The money I have invested in Thailand does reduce my currency risk a bit as it is denominated in Baht, not Dollars. And the fund has grown like gangbusters over the past few years.* But, even so, this fund is only going to be about 10% of my overall portfolio and I don't want it any higher than that anyway as these are very volitile markets to say the least.* Most of my investments are, and always will be, denominated in dollars and most (or all) of my funds hedge currency risk in there non-U.S. investments.* So, if I am correct in my assumption that the dollar will weaken over the next half century, then I will have much higher "inflation" to deal with than most people project in their retirement plans.* If I use 7 or 8% annual inflation in the calculator provided by jdw_fire I see that I need to shave a half a point off my 4% draw.* Furthermore, if I factor in the weighted expense ratio on my investments and shave this weighted expense (.35%)* off my draw percent, I come to the conclusion that 3% as the starting draw percentage is probably a lot safer for my particular situation than 4%.* I can then slowly ratchet up this draw percent over time as I mentioned in my main post, or I can follow some other draw increase methodology.* This decrease in my initial draw percent increases substantially the nest egg that I will need to build up prior to retirement.* But when I look at the rate of my savings (well over 50%), I think that, even with a modestly good overall growth in the market over the next 6 or 7 years, I should still be able to hit my target and have a starting draw rate of $3,000 per month. (which is likely, as I said, to be more than I will actually need.)* I will then have covered not only my healthcare situation, I will have factored into the equation a much higher projected inflation rate than most would plan for.* If I am wrong, I will end up a lot richer I suppose.* But it is better, to my mind, to error on the side of being richer than on the side of running out of money!

* * *I chuckle a bit at the irony of it all.* One of the big reasons-other than the wonderful weather of a tropical retirement and the fine, friendly nature of the Thai people-of living abroad was the lower cost of living.* I will not have so many of the fixed costs I have now.* No car-I hate driving and transportation is cheap in Thailand.* No work related expenses, gas expenses, property tax expenses, cheaper food, cheaper healthcare, cheaper insurance-cheaper everything.* My cost of living will be a fraction of what it is here in the U.S.* But, despite this fact, given my thoughts on inflation, and my decision to have a much lower draw rate, I have to save up considerably more money that I would for the same amount of income in the U.S.* I will need to save up about 25% more money for the same amount money draw because I am living abroad and I feel, therefore,* the need to shave a percent off my initial draw percent.* This is true whether or not I buy an annuity-something that I am leaning towards-to cover my bare bones, minimum expense. (And $1,000 per month is about what foreigners make teaching English in Thailand and they live pretty well;* This data was part of the foundation choosing for $1,000 as my baseline minimum monthly income.)* It is so ironic-to live abroad and enjoy the low cost of living I have to save more.* Who ever said life was simple. *

* * *Once again, any input on my thoughts regarding inflation, my healthcare plan, or* thoughts on my main post and the points therein are appreciated.* I am sorry again for the very long post.* I have put a great deal of thought into many of the aspects of my retirement plan and to post them all at once is just not possible for me. (Thus my comments here about inflation and about my healthcare plan.)* I have found the information from you folks to be most helpful and I look forward to continuing to learn.* I cannot thank you all enough. * I especially wish to thank both Nords and Jdw once again and I thank in advance any other members of this community who may have input of any sort.* Thank you, take care and have a happy retirement and a wonderful life!

Best Regards,
eye*

edit-spelling error corrected * *
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Re: Allow me to introduce myself
Old 06-09-2006, 08:21 AM   #5
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Re: Allow me to introduce myself

FYI, your international investments at Vanguard (emerging markets and "world", probably "total international index") are actually invested in foreign-currency denominated assets. Vanguard values the shares of the index funds in US dollars for reporting and trading purposes, but you get the benefit/detriment of foreign currency fluctuations.

In other words, you already have protection against a weak US dollar by holding a large allocation of international funds. The thai mutual fund may be superfluous given its high expense ratio. Even though it reports the value in baht instead of USD, the value is no different than if you bought a Thai-specific exchange traded fund (ETF) or mutual fund denominated in USD (at a much lower expense ratio)!

Other than that, looks like you have a great plan! Seems your mind is very analytical and you are a planner. Best of luck!
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Re: Allow me to introduce myself
Old 06-09-2006, 08:42 AM   #6
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Re: Allow me to introduce myself

Quote:
Originally Posted by justin
FYI, your international investments at Vanguard (emerging markets and "world", probably "total international index") are actually invested in foreign-currency denominated assets.* Vanguard values the shares of the index funds in US dollars for reporting and trading purposes, but you get the benefit/detriment of foreign currency fluctuations.

In other words, you already have protection against a weak US dollar by holding a large allocation of international funds.* The thai mutual fund may be superfluous given its high expense ratio.* Even though it reports the value in baht instead of USD, the value is no different than if you bought a Thai-specific exchange traded fund (ETF) or mutual fund denominated in USD (at a much lower expense ratio)!*

Other than that, looks like you have a great plan!* Seems your mind is very analytical and you are a planner.* Best of luck!
Hello Justin:

* * *Geez, do I feel like a dingbat!* I thought the Vanguard funds hedged against currency risk in the emerging markets and international markets.* In light of your comment, I will review the matter.* I shall review my fund literature and perhaps contact Vanguard to clarify the issue.* I feel like such a dummy.* I should know whether or not my funds hedge currency risk and I don't know how I got this fact wrong.* In any event, I will likely still keep a portion of the money invested in Thailand.* This money, as I mentioned, is earmarked as a healthcare reserve.* Keeping a good sized chunk of money in the country that you are planning to call home always made sense to me.* Whether I keep this money in the mutual fund or whether I can find a cheaper fund is an issue to research further.* I thank you once again for your input.

Best Regards,
eye
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Re: Allow me to introduce myself
Old 06-09-2006, 08:47 AM   #7
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Re: Allow me to introduce myself

Quote:
Originally Posted by eyenitnoy
* * *I am starting to think that perhaps the 4% draw rate in year one might be too high.* My foundation for this deviation from the convential wisdom of draw rates is based upon one aspect of my situation that is different from those who are not planning on living abroad.* This deals with inflation.* As I mentioned in my origional post, I feel that the C.P.I. will not accurately reflect my own inflationary pressures.* Living abroad means that I will have two aspects of "inflation" to deal with.* One aspect is the obvious one, that is, the increase over time in the price of goods and services.* The second is a bit more subtle.* It is currency changes which, to my mind, act exactly the same as inflation.* Part of my financial plan-and feel free to critique it if you feel I am off base-is that over time I project that economies in Asia will grow at a faster rate than those in the U.S. (thus I have more foreign stocks in my portfolio) and that, over time, the dollar will drop in value relative a basket of Asian curriencies.* And, by my thinking, if the dollar goes from being worth 40 baht (the currency of Thailand) to 36 baht I have just suffered the equivalent of 10% "inflation" assuming of course that my investments are denominated in dollars.* ** *
You need to do what lets you sleep at night but I think your assumption that the dollar will slide relative to the baht for 50 years running is pessimistic. *Sure currencies will fluctuate and yes the dollar has slid recently against some currencies (I don't know about the baht) but if you look back over a longer period of time (i.e. 50 yrs), it has gained also.* So treating the currency risk as an additional inflation factor might not be the right approach.

When it comes to your personal, non currency related inflation rate you might consider this study http://www.fpanet.org/journal/articl...p0605-art7.cfm
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Re: Allow me to introduce myself
Old 06-09-2006, 08:49 AM   #8
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Re: Allow me to introduce myself

eye,

Hey, this investing stuff is complicated! Don't feel bad about it. The "pros" here that understand all the nuances of all these funds spend a lot of time keeping up with investments. But we like doing that stuff.

Another thought to have readily available funds in thailand would be to have 96% of your holdings in the US (in Vanguard for example). Then each year on Jan 1 or whatever, wire the 4% to a money market account with your local thai bank. The international wire fees are usually very small, and you have the stability of having almost all your money in a "safe" country.

There is also the chance that you might not want to live in Thailand forever. Political unrest, instability, civil war, financial crisis, muslim rebels from south Thailand, etc. could all make Thailand undesirable in the mid to long-term. There will always be another tropical paradise a plane flight away though for you. Heck, maybe you get old and want to come back to the US for some reason.

Also, like someone else mentioned, talk to the Kaderlis, Ben, or Lancelot on these forums since they have tons of local experience and may be able to give you tips on how they get by.

The reason I'm a skeptic of SE Asia's stability is that my wife and her family are refugees from Cambodia from the Pol Pot/Killing Fields era. They barely escaped the country with the clothes on their backs and the Khmer Rouge's bullets zipping past them.
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Re: Allow me to introduce myself
Old 06-11-2006, 12:03 AM   #9
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Re: Allow me to introduce myself

I predict that in year 960 you will be flat broke!
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Re: Allow me to introduce myself
Old 06-13-2006, 09:23 PM   #10
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Re: Allow me to introduce myself

Hi Eye....and Sawadee Krup.

It is a rarity that I can contribute to this awesome forum so I will take this opportunity to jump in with both feet.


Phuket is a beautiful island (peninsula, I suppose). Aside from the stupid heat, there's not much to dislike. However, I think it not the best choice for a 40 year old. The Thais have launched their "Thai rak Thai" campaign (Thai love Thai) and it really shows. I have been traveling to S.E.A. for close to 20 years and every trip I sense that we farang (foreigners) have dropped another notch on the totem pole of respect.

Certainly the sex-tourists have not helped the image of the 40 year old male farang, but it goes deeper than that. I think the Thai, for the most part, are a beautiful people and culture...but they view us pretty much the way we see pets. I should say pets with ATM cards.

Don't want to put you off on the kingdom enirely, as I have no less than a dozen friends living there full time...most in Phuket (Rawai, Karon). But I would really like to encourage you to make MANY trips before falling to deeply for the land of smiles. What's the saying; a smile is just a frown turned upside down?

Phuket is probably the most expensive area of LOS. On $1000 a month you will close to poverty. My friends vary in tastes and expenditures and agree $3000 per month (in Phuket) to be much more realistic. You may want to abandon the thoughts of moonlit beaches in trade for the cheaper life that can be had in Issan or Chiang rai.

Also, at 40, you will not be eligible for a retirement visa for another decade. That means visa trips into Cambodia, Laos, Burma, etc. This is another expenditure and a real inconvenience. You also become obvious and easy prey for the unsavory types that frequent such areas. There are also rumours that the Thai are prepared to clamp down on these one day visa jaunts. The word is they might implement a law that you can only do this 3 times and then must stay out of the kingdom for 6 months.

I plan on heading over there next week (or the week after). Not on a pleasure trip this time...my best friend went over there to buy some property (you need a Thai partner to do this). He has been missing now for 30 days and it don't look good.

In closing, do yourself a favor and start reading the many forums set-up on this subject. Thaivisa is a good one and it provides links to others. The Thai do not like to aire their dirty laundry as tourism is head and shoulders their number one baht generator. Just remember, all that glitters isn't gold. I am sad to say that Thailand has become a very dangerous place...especially for 40 yr. old males.

Choke dee (good luck) be careful, and I'll leave the financial stuff to the amazing minds that comprise this board.

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Re: Allow me to introduce myself
Old 06-14-2006, 06:01 PM   #11
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Re: Allow me to introduce myself

Quote:
Originally Posted by nomo-aloha
Hi Eye....and Sawadee Krup.

It is a rarity that I can contribute to this awesome forum so I will take this opportunity to jump in with both feet.


Phuket is a beautiful island (peninsula, I suppose). Aside from the stupid heat, there's not much to dislike. However, I think it not the best choice for a 40 year old. The Thais have launched their "Thai rak Thai" campaign (Thai love Thai) and it really shows. I have been traveling to S.E.A. for close to 20 years and every trip I sense* that we farang (foreigners) have dropped another notch on the totem pole of respect.

Certainly the sex-tourists have not helped the image of the 40 year old male farang, but it goes deeper than that. I think the Thai, for the most part, are a beautiful people and culture...but they view us pretty much the way we see pets. I should say pets with ATM cards.

Don't want to put you off on the kingdom enirely, as I have no less than a dozen friends living there full time...most in Phuket (Rawai, Karon). But I would really like to encourage you to make MANY trips before falling to deeply for the land of smiles. What's the saying; a smile is just a frown turned upside down?

Phuket is probably the most expensive area of LOS. On $1000 a month you will close to poverty. My friends vary in tastes and expenditures and agree $3000 per month (in Phuket) to be much more realistic. You may want to abandon the thoughts of moonlit beaches in trade for the cheaper life that can be had in Issan or Chiang rai.

Also, at 40, you will not be eligible for a retirement visa for another decade. That means visa trips into Cambodia, Laos, Burma, etc. This is another expenditure and a real inconvenience. You also become obvious and easy prey for the unsavory types that frequent such areas. There are also rumours that the Thai are prepared to clamp down on these one day visa jaunts. The word is they might implement a law that you can only do this 3 times and then must stay out of the kingdom for 6 months.

I plan on heading over there next week (or the week after). Not on a pleasure trip this time...my best friend went over there to buy some property (you need a Thai partner to do this). He has been missing now for 30 days and it don't look good.

In closing, do yourself a favor and start reading the many forums set-up on this subject. Thaivisa is a good one and it provides links to others. The Thai do not like to aire their dirty laundry as tourism is head and shoulders their number one baht generator. Just remember, all that glitters isn't gold. I am sad to say that Thailand has become a very dangerous place...especially for 40 yr. old males.

Choke dee (good luck) be careful, and I'll leave the financial stuff to the amazing minds that comprise this board.


Hello Nomo-Aloha:

* * *First, I thank you for taking the time to respond to my post.* I do appreciate it.* Second, I am very sorry to hear that your friend has gone missing.* I hope he is found and I hope he is alright.* I certainly understand your negative feelings toward the Land of Smiles given your experience.* A couple of non-money related points.* I have very carefully researched Visa options.* A variety of non-tourist (30 day) Visa's are available.* My plan is to have a type B Visa which is multi-entry and requires "visa runs" every 90 days for the first three years after which I shall apply for permanent residency using the "investment Visa" (3-10 million baht invested) as the basis for the applcation or, depending on my age at the time, a retirement Visa.* Remember, while I am 40 now, I do not expect to retire for 6 more years.* Thus, I will be closer to the retirement Visa age.* Either way, legal residency can be secured and I will not have to break the law by using tourist visas.* And, given the widespread disrespect for Thai law by so many foreigners, I am not surprised that Falangs have seen their respect drop.* A couple of points.* Prostitution is a crime in the Kingdom.* Persons who pay for sex are criminals in Thailand.* And it is not legal-with the exception of condos and even then there are a variety of rules-for a foreigner to own property in Thailand.* The Thai companies set up to own property are all shell companies and already there is increasing action against these illegal entities.* The bottom line, in my humble opinion, is that if a person respects the spirit and letter of the law, their life in Thailand is likely to be peaceful and problem free.*If a person is a criminal, they are likely to have problems. Big Problems.* The same can be said in most places.* I have been treated so well by the many Thais that I have met-never, ever, have I been treated like a "pet with an A.T.M. card" that, frankly, I don't know where that comment comes from.* But everyone is entitled to their opinion and I respect, if not agree, with yours.* *Finally, in terms of the $1,000 per month, your comments are spot on.* That number is meant to represent the "poverty", or basic food clothing and shelter,* level of life in Phuket.* (Thus picking that as a potential annuity payment number.)* My own number is, indeed, $3,000 per month although I still think that I likely will live on less than that.* But it is wise to be safe.

* * *Thank you, once again, for your comments.* I appreciate your input and I hope everything works out well for you and your friend.* And, if you are going to search for your friend, do be careful.* Avoid any situation that might be dangerous.* Take care of yourself.

Best Regards,
eye*
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