just about to ER in SE Asia

[Ubik]

Hi, after a few years following this board I finally went ahead with:

- My first post .

- Informing my boss that I will be leaving within the year . As I am only 45 I left the "ER" part out .

I have been living in SE Asia for 20+ years, single and planning to stay this way, no dependents, no house, no pet, no debt and no pension .
Actually I give myself 1-2 years of travelling around before deciding if ER is really for me, within this timeframe I expect that I can come back to the job market if I decide to.

This is probably due to the local cost of living factor, but I put my financial goal much lower than most posters here: I targeted & reached a nest of 1.1M USD only, around 35% stocks, 35% income products , 15% property and 15% cash.

Compared to most posts I read here, this is quite low for ER at 45, however I plan for a monthly budget of 2.7 K USD/months only.
It may seems low from an US point of view but is adequate in SE Asia (it is my current expense level even through I leave in an expensive area of Thailand).

I plan on a 3% withdrawing rate, I accept to eat the capital over time to reach zero at the end of the road. I do not mind if I exhaust my nest in old age, as I am not that interested in old age anyway (plus I can expect to get a couple 100 K from my family by this stage).
Health insurance should be OK as I participate in one of the "socialist" health insurance program from the old Europe!
The way I see it the main risk over the next 30 years is the increase in living standard of SE Asia that would relegate my budget from "comfortable" to "struggling", so I do not expect to stay in Thailand over the long term but plan to move to one of the less developed neighbors (except of course if I decide to work again).

Two points:

- When reading this board I often feel very inadequate compared other posters that frequently hesitate to ER at 55 because they have "only" 3M in the bank, makes me feel insecure! Is it lifestyle and environment differences, or am I missing something ?

- I would be interested in members opinion on the currency allocation. As of today I am 45% Euro, 45% Thai Baht (good performance of the THB since the meltdown of 1997), and 10% GBP, no USD as I do not feel confident in USD for the future. Actually I am not that confident in the Euro either, but I do not really know in which currency to place my savings as my future expenses will be in Thai baht (thailand) or linked to USD (cambodia / burma / philipines) - but I would hate seeing my saving going down due to an US default!

I am interested to hear the thoughts of the members of the boards, especially if you have experiences in such currency dilemmas.

Thanks.

 

[obgyn65]

Welcome. Like you I am not confident about the USD. However I live in the US so there is not much choice.

 

[rodi]

Welcome!

- When reading this board I often feel very inadequate compared other posters that frequently hesitate to ER at 55 because they have "only" 3M in the bank, makes me feel insecure! Is it lifestyle and environment differences, or am I missing something ?

I've observed the same thing.

I think a lot of it is lifestyle choices and cost of living. Some areas are more expensive, some people want to do more travel, some people like to eat out a lot.... Not a problem if their nest egg/budget accounts for that. If those are important to a person - then a bigger nest egg is needed.

But there are other folks here who are frugal and still seem to have a high quality of life. Nords lives in hawaii and surfs several times a week. W2R eats out most lunches. The RV types spend large sums on the fuel for their road homes. As long as it's in the budget, and their nest egg supports it - it's all good.

I have a miniscule pension (<$500/mo) and my nest egg is far below $3M... but I do count on SS. I'm also very LBYMs... although not as much as some of the folks here. Even without $3M+ nestegg, I have 100% success from all the calculators I've run for retiring in the next year or so. Like you - I'm planning on a similar budget to my current spending, in retirement. The only difference is my 401k contributions are eliminated (big chunk off my top line), and my health care costs increase (big chunk off my bottom line.)

Also - some folks do not want to touch their principal, ever. I'm not in that camp, and it sounds like you aren't either. If you're living strictly off dividends/gains... you need a much bigger nest egg at the beginning.

 

[BTravlin]

Welcome to the board.

I have more confidence in the USD than the EURO but both seem intent on inflating away their debt which could be more of a problem for you than outright default by either one of them. I would investigate the Canadian dollar if I were you.

 

[nun]

Health insurance should be OK as I participate in one of the "socialist" health insurance program from the old Europe!

Many countries have a residency requirement to qualify for their health care systems, eg. you must be resident in the UK to use the NHS for anything other than emergencies. Just check that you have all the info for your system and don't get a nasty surprise.

 

[jclarksnakes]

Welcome to the forum. Your story of living in SE Asia and reaching FI at an early age is probably VERY interesting. Please post more here or in other threads if you want. I think you are wise to consider in your plan that living in Thailand may not always be as affordable as it is today. At some point there may be no places left with economies like that. It is probably good for the world as a whole that so many of the poorer countries have come up so much in recent decades and that they will likely do so more in the future. Personal downside for you and people in similar situations is that there well be fewer places to live well in retirement. It seems to me that your BIG worry should be that you could at some point fall in love and totally mess up your plan. Do not worry too much that some on the young folks on this forum have saved up more than you have. They have to plan for larger expenses due to different locales and family situations.

 

[anethum]

- I would be interested in members opinion on the currency allocation. As of today I am 45% Euro, 45% Thai Baht (good performance of the THB since the meltdown of 1997), and 10% GBP, no USD as I do not feel confident in USD for the future. Actually I am not that confident in the Euro either, but I do not really know in which currency to place my savings as my future expenses will be in Thai baht (thailand) or linked to USD (cambodia / burma / philipines) - but I would hate seeing my saving going down due to an US default!

I am interested to hear the thoughts of the members of the boards, especially if you have experiences in such currency dilemmas.

Thanks.

One way to hedge against currency devaluation is to invest in foreign stock ETFs & mutual funds, including those which invest in emerging markets. There are also foreign/emerging market bond funds, some in US$, others in local currencies. You're obviously already doing that to a considerable degree with 45% of your assets in Thai baht.

 

[supernova72]

So, I'm no expert on SE Asia but have visited several times and have a friend who is ER'd in Thailand right now. He started in Costa Rica but has lived for 6 ish years in Pattaya Thailand.

He asked me what my pension would be at 55 (I'm 52) was last time I visited (2012). When I said ~$3,000 U.S. he reply was "you'd be the richest guy in Pattaya" (I do not have near your savings BTW). He was joking of course about me being rich but most of his ex-pat friends are living on $2,000 U.S. a month no problem. As you know a pretty nice house rents for about $350 a month there.

So, if you've lived in SE Asia for that long you no doubt have heard similar stories of living on 1/3 of what it takes in the U.S. (I'm not assuming you are from the U.S.) My friend was living in CA Bay area and retired with < than $1M in the bank at 45 and is now 56. No problems with cash flow.

He has enough to golf, go out to dinner, and enjoy the "sights" of Thailand and to this point has not got married to a local lady (not sure why I threw that in). Although from what I can tell, likes the locals very much and is very social.

So your 3% or $3K a month will do just fine I'm sure : )

Good luck!! Sounds like you are on your way to ER...

 

[bondi688]

You guys must have better sources to rental apartments than what are available on Craigslist, There, the apartments are listed at around 40000 to 50000 THB a month , that is over 1350 to 1700 US Dollars a month. You can get decent accommodation in the States for that amount of money.

 

[jphripjah]

I'm also single and considering semi-retiring to Southeast Asia in the next few years and will have well under 3M with no pension.

 

[Ubik]

Welcome to the forum. Your story of living in SE Asia and reaching FI at an early age is probably VERY interesting. Please post more here or in other threads if you want. .

I was lucky enough to have my family finance my studies so I finished school debt-free. I then directly started to work in SE Asia (a local contract in a local but foreign owned company), entry level position (ie: low salary). I then stayed in the same industry but with increasing responsibilities over the year. As ER was a goal from the start, I did maintain a high saving rate even during the low income first years.

The benefit of working around here is that if the minimum wages are much lower than in Europe/USA (translating in lower local cost of living), for positions with responsibilities the gap narrow considerably. At high level (higher than my current position), there is virtually no gap as the salaries get similar worldwide, so for the same job you get significantly higher saving power.
Even if my income today is below the European/US one for the same job, my saving of >50% gross or 2/3 net income would very difficult to achieve back home. I get this saving rate by having a comfortable but low key lifestyle (lower than friends in similar jobs), and keeping it at the same level over the years even when income did grow.
Even factoring the hit in 2008, return on investment have been ok, so I could follow my initial plan for ER (number on my 2002 spreadsheet closely match today situation).
Let's see if they still match in ten years time !

 

[Ubik]

You guys must have better sources to rental apartments than what are available on Craigslist, There, the apartments are listed at around 40000 to 50000 THB a month , that is over 1350 to 1700 US Dollars a month. You can get decent accommodation in the States for that amount of money.

It is easy to find 40000 to 50000 THB /month appartments in expensive parts of Thailand (touristic areas or Bangkok), however it is only the high end of the market or the "expat" oriented part of the market.
In these areas for half these prices you can find very adequates accomodations in "thai" neighborhoods, and if you go outside of Bangok/toutistic areas you can even find nice accomodations for a third of these costs.
I suppose that to be on Craigslist these appartments are targeted to the "expat" market, which of course generate a premium, in this "expat" category then 40000 to 50000 is good but not over the top. Top of the line in Bangkok would be houses or condos in the 200 000 THB/month range !

 

[Ubik]

When I said ~$3,000 U.S. he reply was "you'd be the richest guy in Pattaya" (I do not have near your savings BTW).
Good luck!! Sounds like you are on your way to ER...

Thanks for your nice feedback.
As a aside, with 3 K US you will certainly not be the "richest guy in pattaya", this resort receives a lot of tourist with larger monthly vacation budget, but more important, it has a lot of "investors" from all over the world (europe, more and more Russians, ...) with some M USD to spend (a good gogo bar require quite a sum to change hands).
This is actually one of the charm of the place: you meet a mix of low income retiree, tourist on two weeks visa, and a few millionaires, with a large variety of backgrounds, and sometimes problematic relationship with the authorities of their original countries.
As a simple salaryman I am very bland in this crowd !

 

[jphripjah]

Sorry, Pattaya has very little charm. I mean, I like drinking and, uh, "friendly" women, but Pattaya is a cesspool with a disproportionate number of lowlifes. Present discussion forum company excluded, of course.

 

[supernova72]

Thanks for your nice feedback.
As a aside, with 3 K US you will certainly not be the "richest guy in pattaya", this resort receives a lot of tourist with larger monthly vacation budget, but more important, it has a lot of "investors" from all over the world (europe, more and more Russians, ...) with some M USD to spend (a good gogo bar require quite a sum to change hands).
This is actually one of the charm of the place: you meet a mix of low income retiree, tourist on two weeks visa, and a few millionaires, with a large variety of backgrounds, and sometimes problematic relationship with the authorities of their original countries.
As a simple salaryman I am very bland in this crowd !

Oh yea, my buddy was joking about me being rich if retired there but his point was most of his ex-pat buddies who live there don't have a very high income stream. They also don't live in those nice beach condo's either so there costs are down.

I also visited the Philippines two months back (Angeles City, Boracay, Cedu) to give that one a "test" of sorts. Pretty much ruled it out as an option for a retire destination. Can't really explain why but would prefer Thailand if I was not going to retire in the U.S.

I'm a fitness nut and have not yet found a way to stay "fit" in SE Asia unless u do it all inside (gym). When I do go for a run I'm like the only one out there doing it?? But, this is a financial forum not a fitness forum so I better leave it at that.

 

[FreqFlyer]

We're in similar situations in many respects (age, portfolio value, budget).

I am nearly 41 and may choose to FIRE in Latin America on a portfolio of $1-$1.5M in 2-3 years. My expenses are ~$3K per month.

I hope you post on how it goes for you!