Holiday investing, Retiring on the cheap and splitting up

Holiday investing, Retiring on the cheap and splitting up

I've heard a lot of financial products being introduced for the LTF/RMF shopping season. I have hundreds of thousands of baht as a budget, can bear risk at a certain level and can invest long-term. Can you advise me?

_ NarongANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA Procrastination is a difficult disease to cure. During the first 10 months of this year, the SET index rose by almost 25%. I often wonder why investors wait until December to buy these funds. A better way to invest is to adopt a dollar cost averaging (DCA) technique, whereby you invest a fixed amount every month. There's no point in trying to time the market. People in your income bracket should make full use of the tax deduction limits of 15% of your gross income or a combined limit of 30% if you buy both LTF and RMF funds.

I plan to retire in Uthai Thani. I have US$70,000. How do I make a return that will allow me to live moderately?

_ JayANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA I have never been to Uthai Thani, but I would presume the cost of living there is cheaper than in Bangkok, which is good news for you since $70,000 (2.15 million baht) does not go very far these days.

A good starting point is to set up a rainy-day fund equal to six months' worth of living expenses, investing in money market funds or bank deposits. What is left can then be invested in longer-term instruments such as bonds, stocks, properties and commodities. I would recommend using low-cost index funds as your core portfolio and investing regularly by using DCA. If you pay Thai personal income tax, then tax-deductible funds such as LTFs and RMFs also make sense.

In terms of expected returns, the aim is to try to beat the long-term rate of inflation of about 3%. Bank deposits currently yield about 3%, while dividend yield for stocks are also about 3%, so you need capital gains to stay ahead of inflation. Over the past 20 years, total returns (capital gains plus dividends) from the SET have been in excess of 12% per year. That should be enough to stretch your $70,000 for you to live moderately in Uthai Thani.

My husband and I separated recently but not yet officially. He has at least five credit cards with 1 million baht worth of debt. I suspect he has other problems that will emerge soon. The house stuff must be split 50-50, but I'm really concerned his debts could become my burden too. What to do?

_ AmparaANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA The main concern is whether your husband will likely be declared bankrupt in the near future. If the credit cards are in his name alone, the banks cannot come after your assets, but in the worst-case scenario, if your husband is declared bankrupt, then the banks will likely go after joint assets.

Since you are already separated, I would make the divorce official as soon as possible. All angles must be carefully considered including child custody (if applicable), alimony, outstanding debt and mortgages.


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 to them through wealthcare@bangkokpost.co.th or posted at the TFPA's webboard at www.tfpa.or.th

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