I had a bad credit record five years ago, but I cleared all my debts two years ago. I applied for a new credit card recently, but the bank rejected me. I wonder why I am still on a blacklist and how I can get off it. It is not fair to treat me as a bad credit risk. I paid back every single baht.
_ ChatANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA Define "bad". Bad as in late payments for a couple months, or being delinquent or declared bankrupt? Different banks have different benchmarks, but most will need to see at least a couple of years of good credit behaviour to feel comfortable in giving you credit again.
But if you have ever been declared bankrupt, most banks will not want to deal with you ever again. It may be worthwhile to get in touch with the National Credit Bureau to find out your current status even though I was told by the bureau that it does not have a blacklist.
What is the best option for making a quick return on investment over six months?
_ Bee ParanaANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA Opening a nightclub is one option. The return is really good, and the real beauty is that it is quick. According to people "in the know" about night-time entertainment businesses, past statistics have shown that nightclub owners either make it within the first six months of operation or not at all.
Buying a lottery ticket is another option. The plus side is you only have to wait two weeks and not six months to find out the result. But the down side is you are 305 times more likely to be struck by lightning than you are to win the lottery. That said, according to one survey in the UK about lottery winners, 55% said they were happier after winning, 95% remained married after winning, and male winners gave money to more friends than female winners did, which suggests women are not as generous as men when it comes to spreading the wealth, but I could be wrong here.
Last, if you are still serious about making a quick return in six months, all I can say is best of luck to you and may your every delusion come true.
My fixed expenses are higher than my net income, by about 5,000 baht per month. I'm afraid that I will have too much debt before I can find an extra job. What is your advice?
_ JoeANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA I was paid 14,000 baht a month for my first job, and I managed to get by just fine. But when I got promoted and was earning 40,000 baht a month, I struggled to make ends meet. It must be something to do with the social ladder I was climbing, i.e. peer pressure to keep up with the Joneses.
A better way to solve your problem is to save first _ such as in a provident fund, long-term equity fund or retirement mutual fund _ and spend what is left. A good place to start is to analyse your cash flow and develop a budget. Stick to it rigorously. You may be surprised to find out how many luxury items dressed up as necessities are in your cash outflow.
I'm planning to buy a new car before the end of the year. Should I buy it with cash since I will get up to 100,000 baht from the government tax-rebate scheme? Or should I finance the car for four years and keep the cash to invest in something that gives me a higher return than the interest rates on the car loan? If I invest, what is the best choice?
_ GeeANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA It depends on what kind of car you are buying, but for most people cars are considered "big-ticket items", so they rely on loans rather than pay cash. Moreover, current interest rates are quite low, ranging from 2.75% to 2.85%, depending on the maturity of the loan. If I were you, I would take out a loan for the car and invest the money. Even plain-vanilla bank deposits currently yield 3-4% per year, while the market dividend yield at 3% is quite attractive as a long-term investment.
I have income of 120,000 baht from freelancing work, but the payments are done quarterly. My expenses include 7,000 baht for an apartment along with utility bills plus cable and daily expenses. I also give my parents 10,000 baht a month and sometimes make little extra purchases. How can I handle my expenses better?
_ ThitiANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA Are you making 120,000 baht a month, or 120,000 baht a quarter, earning 40,000 a month? If you are earning 120,000 baht a month and have no savings, then you are a spendthrift. By Thai standards, getting by on 120,000 baht a month is considered well above average.
Being a freelance worker, the certainty and timing of your cash flow will not be the same as salaried people, so you have to manage your cash flow carefully. Whether it's lowering your spending or increasing your income, making a budget is crucial. When done properly, budgeting can help you to save, keep you motivated and increase the chances that your finances are headed in the right direction. As long as you stay disciplined, you will find yourself financially better off in no time at all.
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 firstname.lastname@example.org or posted at the TFPA's webboard at www.tfpa.or.th
About the author
Writer: Thai Financial Planners Association