NnnDear Khun Teera, I would like to seek your advice on a plan for income after retirement. I run my own small business and freelance regularly. My monthly income is about 200,000 baht and my wife works at a private company for a 60,000-baht salary. We have two children studying at the high school level. My point is that I want my wife to quit her job and help me at my company, but a proper plan needs to be prepared. I plan to let my wife take care of our 5 million baht in savings after she quits her job, but neither of us has investment experience. We are both in our mid-40s. If we open a stock trading account, we have no idea how to manage our risk exposure. Please advise.
—Somphol
Answered by ...Teera Phutrakul CFP
Employing a spouse can be a rewarding experience, but it can also be challenging. Working alongside someone who is close to you can improve productivity and make big decisions easier. At the same time, it can also complicate the dynamics of the workplace, creating tension and even relationship troubles.
Before deciding to employ your spouse, you'll need to be sure you're making the right decision for the longevity of your business and your personal relationships. Here are some questions to answer that should make it easier for you to decide if employing your spouse is right for your business:
What unique skills or previous experience will your spouse bring to the role?
What would you do in the event that a business decision could affect your personal relationship?
Will you be able to apply the same workplace policies to both your spouse and other employees?
Do you think your spouse will fit in with existing team structures and personalities?
If the above questions didn't identify any potential issues, there's a good chance that employing your spouse is a good idea. If answering the above questions highlighted some potential issues, you may need to reconsider.
Also, think about how your existing employees might feel about your spouse entering the business. To iron out any nepotism issues, discuss your plans with current employees and stick to standard recruitment procedures for your spouse, including salary scale and the induction process.
As for investing the 5 million baht, I would start by prioritising your plans into short-, medium- and long-term goals such as retirement, college funding, etc; then you can position your portfolio accordingly.
nnnI just closed my restaurant business in the US. I lost about 5 million baht in one year because we overestimated the market, but I still have 5 million baht to invest (excluding my 10 million baht in savings in Thailand). I don't want to invest in business any more. Is it a good idea to open an account in Thailand and invest in the Thai market? If so, what concerns am I overlooking? If not, what is my best option? Right now I don't have a revenue stream, and I don't want to touch my retirement savings.
—Karnchana
Answered by ...Teera Phutrakul CFP
My usual advice about opening a restaurant is don't do it. But I guess you already found that out the hard way. Then there is the old saying about "if at first you don't succeed", which leaves a couple of options open to you: try again (not recommended if you are a skydiver), or give up and try something else.
To get you back on your feet again, you should first set up an emergency or rainy-day fund equivalent to about six months' worth of living expenses. Once this is done, the remaining portion of the money can be invested for the long term.
I am assuming you are still based in the US, so I would keep it simple by investing in US-listed exchange-traded funds (ETFs). Look at the Vanguard S&P 500 ETF (VOO). Total expense ratio is just 0.05% a year. The fund provides broad exposure to the US market.
As for the 10 million baht in the savings account, I would put that money to work as well. Given the current low-interest-rate environment, you are probably earning negative "real" interest after netting out 3% inflation. I would stick to low-cost index funds such as the SET50 fund.
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