Prev Page 3 of 7 1 2 3 4 5 Next » Please log in to reply 152 replies to this topic

[Maigo6]

90% of my money is kept in long term high interest accounts overseas.

I only keep 300 Million Baht in Thai Banks.

Edited by Maigo6, 2009-11-07 02:24:48.

[flying]

Seems like these days it would be best not to keep all nest eggs in one basket

Just because the FDIC has not defaulted is only a rear mirror view.

Not saying they will as they have access to a printing machine... so far

[walt]

jfchandler, on 2009-11-06 23:55:57, said:

We live in uncertain, unsettled times here... in any variety of arenas.

Hi jfhandler,

For my two cents worth of opinion, I think you’ve got it right, but your position could be described in different, more broadly defined, terms.  Keeping only one foot in Thailand and the other foot in the U.S. is certainly sound.  Others here are doing the same.

Just think of the possibilities if one were forced to make a hasty withdrawal from your current domicile due, perhaps, to a catastrophic financial, or maybe political, upheaval.

Having one foot here and the other one there ought to provide for a certain peace of mind, something like having an insurance policy that you pay for during times of U.S. inflation or currency devaluation, don’t you think so too?

Walt

[pkrv]

donx, on 2009-11-06 19:14:50, said:

Since my pseudo-name was mentioned in a previous post (thanks pkrv) I will respond to the original question. I will first state my situation. I'm a US citizen married to a Thai who is now a dual citizen. We live in the US. We help provide financial support for my wife's family plus we own a car (requiring monthly payments) in Thailand that they use, so Thai ATM withdrawals are performed on at least a monthly basis by my in-laws. I don't like keeping large amounts of money accessible to my in-laws because every time I do, I find that the funds are accessed without my knowing. I don't mind providing more funds to them when needed, but I think many of you are familiar with the situation that whatever funds are available seem to always be spent. My wife does own some land, mostly agriculture land in her village. She also does own one piece of relatively valuable beachfront land that we purchased with the intention of using to build our future retirement home on.

Other than the car and the properties we have in Thailand, the rest of our assets are kept in the US. As I mentioned, I limit the amount of money I make available to my in-laws by providing them a US bank ATM card that I only transfer funds into when it's time for them to make their monthly withdrawal. My wife does have a Thai bank account, but we used that mostly to transfer large amounts of money for some of my wife's land acquisitions.

If and when I retire to Thailand, I most likely will have a much more substantial financial investment in Thailand. If nothing else, doing so is a good hedge against currency exchange rate fluctuations. This worked well for us for some of our land transactions in the past, so I am sure the same would be true in the future.

That's perfectly ok donx - just checking if you were awake . I note you too have diversified and spread your risk. If all goes well you will need your own Thai joint bank account it comes in handy and is secure - trust me  have been there and done that. Bangkok Bank is the one to go for.

http://www.thaivisa....nd-t260738.html

[loverboy44]

There was one answer:
For OP's original question: I have roughly one third of assets physically here. One third where I come from, and one third elsewhere. That changes from time to time. I also look at money before I came to Thailand and money during I came to Thailand as being part of the same whole. What counts is here and now and the future.

Physical location is just one method of diversification. Also hold different currencies.

For tax: yes Thai bank accounts suffer withholding tax. On the other hand Thai mutual funds have no capital gains tax or income tax for retail investors. In that way, say Aberdeen Global Emerging Opportunities mutual fund in Thailand is superior to Aberdeen Global Markets in UK for some people or an equivalent fund in the US. TMB's Gold fund invests in an underlying US fund. No tac here for retail investors, not the same in the US.

Also no inheritance tax here - excellent if you have a Thai spouse.

Equities, bonds, commodities, cash, property all move differently.

The list goes on... my take-away is:
1) spread your assets around across geographies, currencies, tax regimes, asset class etc, and pick and choose the ones you are comfortable with.
2) have enough assets wherever "home" is to cushion your future. If that's Thailand, unless you're super-rich (in case I'd wonder why you're on TV), that means some Thai assets, and some THB.

For OP for example, could he survive a 75% drop in USD. Maybe it won't happen in his lifetime, and low probability but I wouldn't count it out either - that's one lesson from all these crises.


--------------------







Have to say that Uk People have to have in mind that the pound may rise or not. But this will be a bet and no more. The Question for them is. Can they afford it or not.

[BEENTHEREDONETHAT]

I'm American with a American wife. We live full time in Thailand, have for 3 years and have no plans for moving. Have not lived in the US for over 25 years. We own our condo and love living in it, enjoy the beach and the area we are in.

We keep no investment in the US, we have our money in 3 countries. Receive a very good interest rate in term deposit and do not have to worry about the security of our$$. We keep enough in Thailand to last us about 3 to 5 years as long as our SS checks keep coming. Should the SS disappear (which I don't anticipate) we will then live on our off shore investment.

[backsoon]

jfchandler, on 2009-11-06 16:57:33, said:

A few of us have been having an interesting discussion on one of the banking threads about where we keep our discretionary resources.... back in our home countries.....or .... deciding to import them here into Thailand where we're living.

I'm not talking about the salaries of those who work here, which of course start out and probably remain here... I'm talking about whatever financial assets and resources you had tucked away before you moved to Thailand.... And assets of the type like cash and other things where you had the ability to choose to keep them back in your home country, or bring them in one way or another to Thailand.

For me personally, I choose to keep about 98% of my available assets back in the U.S. Why?? For all of its failures, at least the U.S. has some pretty substantial rule of law.... There are civil courts, and people who abuse or break the law can be sued and real damages can be recovered--if some financial crime or failure has occurred. And there is the FDIC, which insures bank deposits and has a track record, unbroken to the best of my knowledge, of honoring its obligations. And at least, back in the U.S., I know I'm not a second-class citizen... I can access the political process if aggrieved. There are consumer protection laws, and government agencies that do a decent job of enforcing them, eventually and sometimes, especially if prodded.

Here in Thailand, while I don't mind keeping some small spending money in Thai banks, I certainly don't trust them, nor the Thai government's supposed deposit insurance scheme, to protect any sizable amount of assets. And even if they did or could, perhaps they would do so effectively for Thai people, or Thai people with some clout. But for a farang living in Thailand, good luck. And good luck seeking any recourse or compensation from the government or the police. And good luck pursuing any kind of civil claim in the courts, as if such a legitimate process process really existed here for farangs. And as for the Thai stock market, don't even get me started.

And then, of course, there's the whole arena of what happens if you get married with all or a lot of your assets here, and then somewhere down the line you get divorced...or you find out your loving wife isn't quite what you thought she was...and you've got to separate and divorce in some kind of bad situation. And on and on and on....

Don't get me wrong... I choose to live here, I like living here, and I hope I can spend the rest of my life here. But I certainly don't want to bet my financial future on the banking/financial/government system that exists in Thailand as things stand now, and particularly as it relates to farangs' ability to operate in that world.

Some folks in the other thread agree with me. But others think keeping more of the resources in Thailand will be a good move in the long run, with the current trends in currency exchange and the state of the U.S. dollar. But rather than getting into esoteric discussions about economics, lets talk about the real world.

Just how much faith do you have in Thailand. Are you willing to bet your financial life on it???

Bravo, OP, you have said it all and well enough. I'm with you, though not in US.

[backsoon]

pkrv, on 2009-11-06 19:23:12, said:

The Op is not interested in the complex answer, he has asked for real world answers.

The 5 year rate for USDTHB= is here

http://uk.finance.ya...DTHB=...m&q=l=

Basically he sees a down wood trend. He is now taking a hit.

Banks here are safe they are not vunerable to what is happening elsewhere. He only has to take a look at Farangs trying to open an account, and I was one of them, to understand the measures in place.

http://www.thaivisa....nd-t260738.html

It is annoying I cannot find a great comment by chiang mai - it was along the lines of - you need to develop a strategy for your home currency - your home currency is the one you spend every day not the one you feel is stronger. Most UK people would have found this difficult and have probably suffered - The same is probably becoming true of those who are US based.

But IMO he has time to act - however I have no interest in USD so do not follow this instrument.

Yeah, the banks are safe... but not more than the country itself... NOT SECURE!

[Naam]

jfchandler, on 2009-11-06 16:57:33, said:

For me personally, I choose to keep about 98% of my available assets back in the U.S.

Just how much faith do you have in Thailand. Are you willing to bet your financial life on it???  

i have no faith in Thailand nor do i have faith in the U.S. and i think anybody who keeps 98% of his assets in either country has not done his homework.

no offense meant!  

[jfchandler]

Are u advising Deutchland uber alles, Naam???  

But seriously, I'm still waiting for an answer to the question I posed here last night: what happened with farang depositors in Thai banks that went under in the 97 Asian meltdown??? Or at any other time for that matter....

Did they get their money back until the Thai government's deposit insurance program? And if so, how long did that take, and what share of deposits were actually returned???

[jfchandler]

Beenthere, if I may ask, how do you "keep" your funds in three other countries, banks or some other kind of placement?

And what kind of set-up or arrangement do you/they have that keeps you free from worry about the security of your funds there???

And then there's the issue of moving funds, when you need them, from country to country (from where the $ are deposited to where you may be spending them)... It's not particularly easy to do, in most instances. International wire transfers tend to be expensive and a hassle....

I know how to open a bank account in Thailand, because I live here and used to be a tourist here.... But if you ask me about opening a bank account in Australia or some other place I've never been, I wouldn't have a clue.

BEENTHEREDONETHAT, on 2009-11-07 07:30:09, said:

We keep no investment in the US, we have our money in 3 countries. Receive a very good interest rate in term deposit and do not have to worry about the security of our$$.

[alfieconn]

Quote

I can understand that sentiment in the context of Thailand, but if one does that and plans to be in the country for a long time (perhaps permanently), how would you hedge your currency exchange rate risk?

Quote

You can hedge by taking out a Forward contract but i'm not sure if you would want to do this with the rate as it is at the moment.

Quote

So is that what you do instead of bringing money into Thailand? Somehow I doubt that many amongst the the legions of expats in Thailand who advise ''don't take more to Thailand than you can afford to lose'' are buying Forward Contracts on the Baht.

A forward contract is still bringing money into the country

No one said ex-pats are taking out forward contracts on the baht, the poster just enquired how would you hedge against an foreign exchange risk and this is one way.

Edited by alfieconn, 2009-11-07 09:44:46.

[Naam]

jfchandler, on 2009-11-07 09:29:08, said:

Are u advising Deutchland uber alles, Naam???  

no i don't. my advice is don't keep your hard earned money where greedy taxmen can lay their claws on it.

[BEENTHEREDONETHAT]

jfchandler, on 2009-11-07 09:36:22, said:

Beenthere, if I may ask, how do you "keep" your funds in three other countries, banks or some other kind of placement?

And what kind of set-up or arrangement do you/they have that keeps you free from worry about the security of your funds there???

And then there's the issue of moving funds, when you need them, from country to country (from where the $ are deposited to where you may be spending them)... It's not particularly easy to do, in most instances. International wire transfers tend to be expensive and a hassle....

I know how to open a bank account in Thailand, because I live here and used to be a tourist here.... But if you ask me about opening a bank account in Australia or some other place I've never been, I wouldn't have a clue.

BEENTHEREDONETHAT, on 2009-11-07 07:30:09, said:

We keep no investment in the US, we have our money in 3 countries. Receive a very good interest rate in term deposit and do not have to worry about the security of our$.

All of my funds are in Bank Term Deposits with the exception of one credit union account. The $ is guaranteed by Australia or New Zealand. The interest rate being paid is very good compared to the US or Thailand. I retired to Australia and had accounts there while we lived there. We opened accounts in New Zealand as the taxes on your earnings there,are 0% but you do pay 2% of the earnings as a service charge. Thats for non residents. Australia charges 10% on the earnings for a non resident.

When we move money from one of our accounts to Thailand it invariable arrives in a few hours no hassle.

To the best of my knowledge you have to go to NZ to open an account there. I immagine it is the same for Oz.

You do have to consider the FX rate but it has done really well by us in the last year, about 30% gain relative to the US dollar. Of course that can just as easily go the other way, but it doesn't really matter until it is time to move some money.

We are very comfortable with our arrangement, I'm to lazy to put my money into something that needs constant monitoring. I admire people that do that but I am so busy doing nothing I can't spare the time.

[jfchandler]

Beenthere...thanks for the clear answer above...

Just one clarification... what does this mean... "The $ is guaranteed by Australia or New Zealand."

Are you saying those two countries have some kind of government guarantee on bank deposits similar to the FDIC.... or have some other meaning?

Regards....

[BEENTHEREDONETHAT]

jfchandler, on 2009-11-07 10:35:48, said:

Beenthere...thanks for the clear answer above...

Just one clarification... what does this mean... "The $ is guaranteed by Australia or New Zealand."

Are you saying those two countries have some kind of government guarantee on bank deposits similar to the FDIC.... or have some other meaning?

Regards....

jf..........That's it, the government guarantees bank deposits, same as US.

[SurfRider]

.    
"Did they get their money back until the Thai government's deposit insurance program?"
        
It would be interesting to get a specific comment from someone who had cash in a Thai bank during the devaluation and is willing to tell the truth about what happened to it.
    
My understanding is that there WAS no money to get back --  After the devaluation, the cash was simply worth less than 50% of the value it had the day before.
    
I'm attempting to get a specific answer from a friend who was a VP with Asian Development Bank back then -- I'll post it if he has time to answer it.
    
Here's some bacic detail:
The effects of devaluation upon a country run deep. Per capita income immediately decreases as the currency weakens, and therefore, wages are suddenly worth less.  Thailand is a country with a large gap between its rich and its poor.  The process of floating the exchange rate harms the poor in particular because they lack the means to invest in financial markets to protect themselves from inflation.  In addition, foreign debt becomes more expensive to repay, and companies with large amounts of foreign loans face the danger of default.    Foreign investment is likely to dry up as investors lose confidence, causing delays in projects funded largely by foreign capital.
        
This link covers the story in detail.
  
http://74.125.153.13...55342839_3.html
.

[jfchandler]

SR, no, I'm talking about a different thing... related yes, but not the same...

The currency devaluation affected everyone holding Thai baht at the time no matter in what bank it was kept, but that was something that occurred in the marketplace... And of course, there was no Thai government deposit insurance scheme relating to that.

I'm talking/asking about instances where particular Thai banks went bankrupt or out of business during that period or any other. It's well before my time here, but perhaps the recently much-publicized Bangkok Bank of Commerce would be one example. I suspect there were others as well during that period, where the bank itself, as a business, went under and didn't have enough funds to cover all of its obligations.

In those latter instances, for farang who had money in those Thai banks, what happened? Did they get repaid under the Thai government's deposit insurance program, or did that program even exist back then??? Or did they simply lose all or some portion of the funds they had on deposit???

SurfRider, on 2009-11-07 12:15:24, said:

My understanding is that there WAS no money to get back --  After the devaluation, the cash was simply worth less than 50% of the value it had the day before.

[fletchsmile]

BEENTHEREDONETHAT, on 2009-11-07 11:00:29, said:

jfchandler, on 2009-11-07 10:35:48, said:

Beenthere...thanks for the clear answer above...

Just one clarification... what does this mean... "The $ is guaranteed by Australia or New Zealand."

Are you saying those two countries have some kind of government guarantee on bank deposits similar to the FDIC.... or have some other meaning?

Regards....

jf..........That's it, the government guarantees bank deposits, same as US.

As does the Bank of Thailand. Think you'll also find that the limits of guarantee in Thailand currently exceed those of US and UK.
There was originally a plan to reduce to THB 100mio after yr1 to THB 1mio after year5 on sliding scale. Because of the banking crisis started in the US, the sliding scale has been put on hold. The US is up for review in 2013/4 if I recall - unless changed drops to 100k.

Interestingly Thailand as a country has large reserves relative to its size, particularly on currency. US answer is to print money which relies on people continuing to want USD.

Don't forget many western banks recently increased their guarantee amounts because there was such a lack of confidence in their banking sectors.

Interesting also was the US introduced deposit guarantees for the first time during the Great Depression, where many people actually did lose everything.

BTW on the Asian Crisis, it rather difficult to prove no-one in Thailand lost their bank deposit. Think the onus should be on anyone proving someone did. So far haven't heard of anyone. From what I have seen in most cases insolvent banks throughout Asia were nationalised, merged or put into Asset Management countries, so the accounts still existed... Can't think of anyone were they said sorry your money is gone. Quite different to government of Iceland say...

Edited by fletchsmile, 2009-11-07 12:39:35.

[jfchandler]

fletchsmile, on 2009-11-07 12:35:49, said:

As does the Bank of Thailand. Think you'll also find that the limits of guarantee in Thailand currently exceed those of US and UK.
There was originally a plan to reduce to THB 100mio after yr1 to THB 1mio after year5 on sliding scale. Because of the banking crisis started in the US, the sliding scale has been put on hold.

Fletch, I'm aware of the Thai government's plan to gradually reduce the maximum limit on their bank deposit guarantee program. But I hadn't heard those changes had been put on hold... Can you post here and point to some source for that decision/news???

fletchsmile, on 2009-11-07 12:35:49, said:

BTW on the Asian Crisis, it rather difficult to prove no-one in Thailand lost their bank deposit.

I'm not trying to prove it one way or the other... I just asked a simple question of the readers here... Did anyone ever have their own money in a Thai bank that failed, and what what the outcome of that??? Pretty simple question, really.

There's a lot of TV folks around who are always boasting about how they don't use foreign ATM cards because they keep all or most of their funds in local Thai bank accounts. So I'm assuming someone here had deposits going back far enough to have gotten caught in a Thai bank failure. There certainly were enough of them...

[fletchsmile]

Glad you clarified that one jfc. FX risk and loss of deposit very different risks.

jfchandler, on 2009-11-07 12:28:04, said:

SR, no, I'm talking about a different thing... related yes, but not the same...

The currency devaluation affected everyone holding Thai baht at the time no matter in what bank it was kept, but that was something that occurred in the marketplace... And of course, there was no Thai government deposit insurance scheme relating to that.

I'm talking/asking about instances where particular Thai banks went bankrupt or out of business during that period or any other. It's well before my time here, but perhaps the recently much-publicized Bangkok Bank of Commerce would be one example. I suspect there were others as well during that period, where the bank itself, as a business, went under and didn't have enough funds to cover all of its obligations.

In those latter instances, for farang who had money in those Thai banks, what happened? Did they get repaid under the Thai government's deposit insurance program, or did that program even exist back then??? Or did they simply lose all or some portion of the funds they had on deposit???

SurfRider, on 2009-11-07 12:15:24, said:

My understanding is that there WAS no money to get back --  After the devaluation, the cash was simply worth less than 50% of the value it had the day before.

Edited by fletchsmile, 2009-11-07 13:18:10.

[fletchsmile]

jfchandler, on 2009-11-07 12:45:32, said:

Fletch, I'm aware of the Thai government's plan to gradually reduce the maximum limit on their bank deposit guarantee program. But I hadn't heard those changes had been put on hold... Can you post here and point to some source for that decision/news???

Sorry, don't have a source to post a link to. I remember reading the notification that 100% guarantee would be extended until 2011 as a result of the (western) global banking crisis. There were also articles in BKK post etc. It was in H2 2008. Many foreign banks in Thailand thought they might benefit from a "flight to quality" as the guarantees were reduced, but this postponement has delayed that to an extent.

One way for people nervous about safety of deposits is actually to place money with the foreign banks in Thailand. That way they have the double protection of the Thai guarantee scheme in addition to the reputation of a foreign bank.

Even then it can be a complex game. Citbank globally looked up sh*t creek last year. Bank of Thailand had serious negotiations with Citbank locally as to what Citi were and were not allowed to do. These were BOT efforts to protect Citibank customers here in Thailand so they weren't at risk because of US mistakes. At one point I'd have said your money was safer in Citibank Thailand than Citibank US. There's also a prallel there with the insurers like AIG - massive bailout and effectively insolvent in US, doing well and safer in Asia.

It also makes a difference whether the foreign bank is a subsidiary or branch in structure, with different repercussions. Bottom line is global banking is no longer as simple as US safe, developing country not safe.

Edited by fletchsmile, 2009-11-07 13:20:42.

[jfchandler]

Here's a summary of the changes in the Thai bank deposit guarantee program that were enacted last year...

Quote

Institutes of Deposits Protection  Act – 11 August 2008

On 11 August 2008, the Institutes of Deposits Protection Act took effect throughout Thailand, bringing changes to the amount of bank deposits insured.  At present commercial bank deposits are insured by the government at 100% for the duration of the deposit in the event a bank's license is cancelled or a bank goes bankrupt.  However, the new Act protects 100% of deposits with local and foreign financial institutions in Thailand in the first year, or until August 2009, decreasing to 100 million baht per person per bank in the second year, 50 million in the third year, 10 million in the fourth year, and 1 million from the fifth year on.

It is estimated that 900,000 accounts, or 1.2% of the total depositors, contain 1 million baht or more in deposits. Yet the accounts comprise 73% of the total money saved of 5.1 trillion baht.

If and when they get to the last/fifth year of the changes.... at 1 million baht per account, at the current exchange rate, that works out to a deposit guarantee of about $30,300 U.S.....

If the 100 million baht amount is in effect now, that works out to about $3 million U.S. -- provided a farang can actually receive reimbursement under this system.

[Naam]

BEENTHEREDONETHAT, on 2009-11-07 10:29:34, said:

1. All of my funds are in Bank Term Deposits with the exception of one credit union account. The $ is guaranteed by Australia or New Zealand.

2. You do have to consider the FX rate but it has done really well by us in the last year, about 30% gain relative to the US dollar. Of course that can just as easily go the other way, but it doesn't really matter until it is time to move some money.

1.nowadays virtually all deposits are guaranteed by any civilised country including the 'dwarfs' Singapore and Hong Kong.

2. the gain for both currencies vs. US-Dollar was even more in percentage terms. but one has to consider that both currencies LOST the same percentage (Aussie Dollar even more) last year.

remarks are for the record only  

[fletchsmile]

Naam, on 2009-11-07 08:45:54, said:

jfchandler, on 2009-11-06 16:57:33, said:

For me personally, I choose to keep about 98% of my available assets back in the U.S.

Just how much faith do you have in Thailand. Are you willing to bet your financial life on it???  

... i think anybody who keeps 98% of his assets in either country has not done his homework.

no offense meant!  

Very wise words Naam...

I shudder to think what would happen if Asia, particularly the Chinese were ever irked enough to sell off all the US assets they own. They've already shown their intentions to reduce reliance by the world on the US and USD, which doesn't bode well for US and its currency. The US system relies on people believing 1) their supply of paper is endless 2) people will continue to actually want it. Recent events have seriously challenged both. Personally I think and hope there'll be an orderly wind down of the over importance of the US and USD, rather than a catastrophic shock - I wouldn't like to stake my future on it tho' no matter how low anyone says the probability is..

As for Thailand. The passing of a certain unspeakable figure is a large unknown, as jfc said, and a large risk. Funnily enough the local Chinese hold the strings on that one too. As patriotic as they are, I don't think they'd allow their business interests to suffer for too long.

Edited by fletchsmile, 2009-11-07 13:42:59.