I began my career one year ago earning 15,000 baht a month, but now I make 34,000 baht because I changed my job. I have no fixed expenses, plus I don't have to take care of my parents financially.
My question is, I've seen other people buy cars and they pay almost 20,000 baht a month for their loans, which is relatively high for me. I'm wondering which of these options is best for me:
1. If I buy a car, condominium or some property, is that a good idea? I never have owed any debt, but I like the idea of borrowing money from a bank. I'm just worried that if I'm in debt, I will not be able to leave my job until I die, even if I'm bored, because I will need the income to pay off debt.
2. I like shopping, new clothes, shoes and accessories, and I like to go for treatment at skin clinics _ all temptations for women. I really want to cut these expenses, but how?
3. Since cars and condominiums require a lot of maintenance expenses, is it worthwhile to invest in these assets?
_ Kuljira
ANSWERED BY... Attaporn Promkaewngam, CFP Dear Khun Kuljira, I think you have already made up your mind. But I would like to share with you a story of two people who earn the same amount and started their careers at the same time.
One man decided to spend his money on a fancy car first because it looked cool. He thought that having a car would be useful for driving his girlfriend around. It would be convenient and also a status symbol, something he could boast about to family members. The car was priced around 600,000 baht and he got a five-year lease.
The second guy is the opposite of the first. He doesn't mind taking mass transit and considers the costs of owning a car, such as maintenance and depreciation, unnecessary. He decided to buy a condominium unit near the On Nut BTS station at a price of less than 2 million baht 10 years ago, with a mortgage term of 30 years.
After 10 years, look at their situations now. The first guy still drives his car and does not own a residence. He is reluctant to sell his car because of its cheap market price. He is thinking about settling down with a family, but he isn't ready to do so financially. He cannot buy a condo at the current high prices and has no savings because he spends most of his money for leisure.
The second guy's condo has tripled in value and he is debt-free because he spent some of the gains from selling the condo to pay off the mortgage. Now he is ready to settle down with a family, and he will buy a car if he has a child. He also has an appropriate amount of savings because he made a financial plan.
You might think this is a story where you can write your own ending, but most people who complain about feeble income and high expenses are in the first category, while the second category is a minority in society, free from debt and in some cases considerably rich.
Khun Kuljira, which one do you want to be? I believe you have the answer.
The Thai Financial Planners Association is the Certified Financial Planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted through wealthcare@bangkokpost.co.th or the TFPA webboard, www.tfpa.or.th