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Hello from SouthEast Asia
Old 10-18-2010, 08:09 AM   #1
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Hello from SouthEast Asia

Hi, I am Mongo. An American expat. Now 74 years old and retired since 2003. Like many others I have had my ups and downs in life, the last of course being the financial debacle since 2008, in my case actually since Nov 2007. I am looking to find quality information about all topics financial.

I am, or may be considered, a maverick when it comes to investing. However, I have learned much in my previous mistakes.
My current portfolio is less than 100,000 and it looks like I may have to ensure that it lasts 10 or more years.
At the current rate of dollar value loss that is going to be a struggle.

Having said all that. since May of this year my portfolio has out-gained the S&P500 by 17%. I am willing to share my knowledge FWIW in hopes of receiving useful advice.

So there you have it.
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Old 10-18-2010, 08:51 AM   #2
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Welcome.

I would love to hear about your "maverick" investment and your plan in making the 100K last 10+ years.

Where in SE Asia are you?
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Old 10-18-2010, 09:20 AM   #3
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Mongo only pawn... in game of life.

Best wishes Mongo

I would however note that almost any portfolio can be shown to outgain the S&P 500 in retrospect back to a chosen date.
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Old 10-18-2010, 10:00 AM   #4
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Mongo, I've been wondering how U.S. expats in Thailand have been dealing with the weakening dollar. Can you tell us anything about this?
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Old 10-18-2010, 10:24 AM   #5
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I thought one could live like a king in Southeast Asia for pennies a day, so wouldn't your nest egg be ample?
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Living in SE Asia
Old 10-18-2010, 11:59 AM   #6
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Living in SE Asia

Replying to posts received to date:

re: SAM
Hi, Sam. Thanks for the inquiry. First of all I am not recommending that anyone follow my footsteps. By 'maverick' I mean that I try to make my own judgments as for what is best for me.

re: Emeritus
Hi Emeritus, Agree with your comment. I am aware that favorable time frames can be 'chose' to show favorable results. I am only reporting my results of the past 6 months. I can only hope I can stay ahead of price moves by paying close attention and adjusting my portfolio as needed.

re: Onward
Hi Onward, Dealing with the weakening dollar is doubly difficult in Thailand since it's THB is very strong and rising as well. All SEA currencies are rising but Thailand is rising faster. I expect to see 25/1 soon.

re: Bestwifeever
Hi Bestwifeever, Is that you or your spouse? I am afraid the days of living in SEA on pennies a day are long gone for the westerner. The Thais can do it inland but you and I would never want to live the way they do.
Perhaps i can illustrate that to you in different thread sometime.


In past years i trusted my various financial advisors. I sometimes found that they had other agendas or just poor advice. Am now gunshy!

Back in the 80's I was advised to put a lot of inheritance money into tax shelters and Real Estate Limited Partnerships. The advisor, a CFA, had been recommend to me by a trusted friend who himself has been doing fairly well under his guidance. These all required K1 forms which were impossible for me to figure out. I then was not at all experienced in investing. Bottom line the investments were not liquid and could not be exchanged for better deals without a loss on the sale.

Some of that inheritance was invested with another firm, Schwab. Through a 'connection' I my account was handled by a VP of the firm. He advised I put the money in some Oil & Gas Trusts. Three of the four were bankrupt with 6 mos.

In the mid-90's I began working in South Korea under an excellent salary plus a local daily allowance. I was able to live in Korea very comfortably on the daily allowance, so my entire salary went into my bank every paycheck for 8 years. In retrospect, I should have at least invested that money in some secure bonds, Treasuries, or CDs. But I was still a novice that has been burned twice and did not trust anyone anymore. Big mistake and I know it now.

In 2001 I was 65, my Korean consulting contract terminated and sent home to look for another job assignment. They asked if i wished to retire. I said no. So, after three months of searching to no avail, the company took the opportunity to lay me off along with a change in the Division structure. But by forcing them to do it that way I became eligible for a 'termination package" that i would not have received if i had 'chosen' to retire. That gave me another fairly large cash dump.

With that cash infusion on top of 8 years of significant wages in the bank, i was I though sitting pretty. I decided to leave my retirement account and my 401k alone. I was of course not able to put more funds in the 401k, but it did earn dividends and interest on the holdings. The retirement account continued to draw interest at 4.7%. Wow! I had never been that well off before in my lifetime. Soon after I received the cash from the 'termination package' I talked to another so-called 'Financial Advisor'. We talked at his home, with which I was very impressed. At least he was doing well.

This was mid 2002. He was distraught with the market and could not/would not recommend anything. He tried to talk me into an annuity. Then he suggested AIVSX, an American Fund that pretty much tracked the S&P500 and which has a 5.75% upfront fee. Well fine! Why not put the money into the Vanguard SP500 fund that did not have any fee. We would not give me a straight answer. I lost $1500 on his retainer fee. But did not invest with him at all.

So, for the next year and a half I lived off the non-invested bank account.

My 2 br apartment in San Jose CA was costing me $1000 per month as was an old, drab building. Private homes of the same size were renting at $2000 so i was being brainwashed that I had a good deal. In Sept 2003 I pulled up stakes and moved to Thailand.

In Thailand I rented a condo for 25000 THB/mo. (about $600 at the then exchange rate of 42 THB to 1 USD). The condo was/is on the 23rd floor of a beautiful high-rise right on the beach overlooking the Bay of Thailand.
My American style breakfasts at the local were 120 THB or less than $3 USD. In San Jose they were approaching $11 at a coffeeshop.

OK, sorry to get off the subject but it does explain that I had then lost faith in Financial Advisors. These days, I follow the internet so-called gurus but do not often believe their constant hype. I have taken on-line courses in investing. Some of those are worthwhile I think but I carefully assess what they recommend.

I have decided that I now need to focus on income rather than growth, although I would like to have some growth oriented investments.

I know I will have to be lucky. I also know that to succeed I cannot be conservative. I shy away from Mutual
funds now, in lieu of ETF's and CEF's that pay high yields. Dangerous? Yes, one has to stay ahead of the game and move to another investment before the first one crashes. You cannot do that with Mutual funds.

So, all in all I am a maverick because I need to be. That 42 THB to 1 USD has dropped to 29 /1 and I am sure it is headed lower.
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Old 10-18-2010, 12:32 PM   #7
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Quote:
Originally Posted by mongo View Post
First of all I am not recommending that anyone follow my footsteps. By 'maverick' I mean that I try to make my own judgments as for what is best for me.
By your definition, I would guess at least 50% of this forum are also 'maverick'. "CFA", btw, is most of the time a derogatory title on this forum.


Quote:
Originally Posted by mongo View Post

...

With that cash infusion on top of 8 years of significant wages in the bank, i was I though sitting pretty. I decided to leave my retirement account and my 401k alone. I was of course not able to put more funds in the 401k, but it did earn dividends and interest on the holdings. The retirement account continued to draw interest at 4.7%. Wow! I had never been that well off before in my lifetime. Soon after I received the cash from the 'termination package' I talked to another so-called 'Financial Advisor'. We talked at his home, with which I was very impressed. At least he was doing well.

This was mid 2002. He was distraught with the market and could not/would not recommend anything. He tried to talk me into an annuity. Then he suggested AIVSX, an American Fund that pretty much tracked the S&P500 and which has a 5.75% upfront fee. Well fine! Why not put the money into the Vanguard SP500 fund that did not have any fee. We would not give me a straight answer. I lost $1500 on his retainer fee. But did not invest with him at all....
Sounds like you had large sum of money in 2001 (8 years salary + severance package) that has somehow shrunk to 100K today. I'm probably misreading something.
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Old 10-18-2010, 04:57 PM   #8
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Quote:
Originally Posted by Sam View Post
Sounds like you had large sum of money in 2001 (8 years salary + severance package) that has somehow shrunk to 100K today. I'm probably misreading something.
That's how I read it also. That and "Maverick" do go together don't they?
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Where did my money go?
Old 10-18-2010, 08:43 PM   #9
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Where did my money go?

Re: Sam and RonBoyd
To be sure there seems to be a disconnect from what once was a comfortable nest egg to what it is now.

The best answer I can give to that is that i have not acted wisely. I have been unnecessarily extravagant, and have been a victim of the 2008 debacle in a big way.

As mentioned before, when I first retired I was very gunshy of investing. So, I lived in San Jose, CA for 20 months on my SS and the cash in my nestegg. Then continued to live on that nest egg in Thailand until early 2007 when I rolled over my 401K and pension fund into an IRA.

In addition to the drop in market prices in 2008, etc., The vcalue of the Thai baht has risen at the same time the US dollar has dropped. What was once a 42/1 FX rate has become 29/1 so the cost to me in dollar terms has increased 30 per cent without any increase in the Thai price.

So, I hope that partially explains the apparent disconnect.


I
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Old 10-18-2010, 08:46 PM   #10
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Thanks for the explanation.

I learn just as much from failures as I do from successes. So if you're willing, I'm listening.
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Old 10-18-2010, 09:16 PM   #11
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Mongo do you still get Medicare coverage as full-time expat? And I assume you still get your Social Security as an expat...

Ahhh, I will be in Bangers soon yet again...wheels down on 29 December!
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Old 10-18-2010, 09:22 PM   #12
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I'm not Mongo, but I know the answer to both questions.

Yes for Medicare. Unfortunately Medicare is not available outside the US.
Yes for SS, regardless of where one lives (with the possible exception of N Korea and Cuba.)
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Medicare coverage and Social Security
Old 10-18-2010, 11:18 PM   #13
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Medicare coverage and Social Security

Sam is correct.

Medicare is not available to US citizens living outside the USA. But since I have continued to pay the monthly fees for Part B t is my understanding that it would be immediately available if I were to return to the USA. It is also my understanding that if I were to cancel the Medicare Part B (for example to save money) then if I were to return to the USA, I could reinstate the service but would have to wait for a several month holding period.

Social Security is available to me same as in the USA.
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Re: Sam - Post #10
Old 10-18-2010, 11:43 PM   #14
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Re: Sam - Post #10

Hi Sam,

I just chanced upon this forum the other day and am very happy to have discovered it. I admit to a number of monetary mistakes as well as mental errors. Hopefully with knowledge to be gained from this forum and perhaps others I might be able to avoid such trip-ups in the future.

Cannot give good reasons for making some of my errors in judgment. Perhaps some of them were related to thinking I would not live this long and felt that I would live it up while I had the chance. When I retired at age 65.33 Medicare told me was likely to live until I was 84, maybe even longer. Having been diabetic (Type 2) since 1989 (over 20 yrs) and having had one heart attack in 1993 followed with an angioplasty, then another angioplasty just 6 months before retiring over here, I simply did not believe I might live as long as some statistical actuarial tables said I might.

I Having said that I now realize the future is very uncertain as to the timing of my eminent demise and have come to realize I might outlive my nest egg. Since that realization I have changed my investment way of thinking and have been fairly successful (maybe just lucky).

If i were to outlive my nest-egg and had to rely only on my SS, I think it could be done here in Thailand. Others do it on less. I just could not enjoy life as much.
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Old 10-18-2010, 11:44 PM   #15
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Asian living standards have improved dramatically over the last 20 years as economies have grown both in absolute and relative terms (although extreme poverty is still widespread and horrific).

For expats, out here Asia's economic success has had a number of consequences. Some good. Some bad. Among the bad are (i) cost of living increases which are proportionately greater than cost of living increases in more developed markets and (ii) rising currencies which has the effect of reducing the value of income derived from the home country.

Living cheaply out here can still be done, but it's not as easy or as cheap as it once was and, as mongo points out, you wouldn't want to adopt the lifestyle necessary to live really cheaply (at least, I wouldn't YMMV).
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Old 10-19-2010, 05:50 AM   #16
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Thanks for the explanation.

I learn just as much from failures as I do from successes. So if you're willing, I'm listening.
+1
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Old 10-19-2010, 08:03 AM   #17
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Hello Mongo,

I believe you have come to the right place. There are many people on this board who are proficient in investment. I have no doubt you will get the answers you seek.

There are also at least two members here that know intimately the ins and outs of the expat life. "kramer" is both a Thailand and The Philippines veteran, if I remember correctly. The Kaderlis are perpetual travelers of the world, they are experts in traveling on humble budgets. You can find more info on the Kaderlis at

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As you already pointed out, many people do lead a comfortable life in Thailand on SS alone. Obviously "comfortable" is a very relative term and may have to do more with the state of mind than the actual materialistic stuff, up to a certain point of course. 100K is not a lot for Americans but is a fortune in SE Asia and I am confident it would be a nice and significant complement to your SS.

I personally know two Vietnamese Americans living comfortably in VN on $1,000/mth (single) and on $1,500/mth (couple). Besides Thailand, I heard a lot of good things about Malaysia and The Philippines.

Edit to add: Are you familiar with FIRECalc? I just did a run with your numbers: 100K, 10 years and $8,000/year initial withdrawal. The result is impressive 98% success. With $9,000/year, the success rate is 88%, which to me is also impressive.
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