You have probably read newspaper articles about the aging population in many western countries, and how governments soon won’t be able to afford to pay everyone a pension. You may also have read about how people are reaching retirement age with insufficient funds to provide them with a comfortable lifestyle, especially now after their savings have been ravaged by the global financial crisis.
At the same time, many of those now reaching retirement age are confident and experienced travellers. Mix all these ingredients together and you can begin to see the justification for the growing number of westerners choosing to retire in countries like Thailand. Many of these folks can look forward to having the time of their lives. For others it becomes an exercise in disappointment and broken dreams. In this article I want to briefly talk about one reason why this adventure goes badly for some, that being financial mismanagement.
Many westerners have lost money in Thailand, and in fact there is a saying often bandied around in online forums, “Never invest more in Thailand than you are prepared to walk away from”. But the unique social and investment landscape in Thailand is just one issue here. Many – if not most – of those who lose their money simply did not do their homework and made bad decisions.
The formal name for this process of researching and analysing a potential investment is ‘due diligence’. This is one corner that should not be cut, for without doubt Thailand can be an unforgiving place for the lazy or inept investor. In reality, however, many newcomers to Thailand do even less research before making an investment here, than they would in their home countries. Why is this so? There are several reasons, including for example the difficulty of accessing reliable English-language information about many investment-related matters.
Another factor is that many expat retirees take the view that the substantial purchases they make are not actually ‘investments’. The house they buy is for comfort and security, the business they establish is a hobby or past-time. They don’t expect to make money from them … “it’s not about the money” they say. When things then come crashing down – and see any online expat forum for scores of examples – it matters not whether those involved considered the transactions to be investments or not. Get real folks, decisions such as these can have significantly impact on your happiness and overall financial well-being. They can even bring about situations where your future life-choices and security become greatly compromised.
And do not be swayed by the fact that things are cheaper in Thailand, thinking that you can take a more relaxed approach to purchase or investment decisions. Unless you have a money tree you can still run out of money, and as an expat that will usually mean you will be unable to renew your visa and will have to leave Thailand.
My message here is simple. Any and every substantial purchase in Thailand must be given the same serious and thoughtful consideration that you might give to a major financial investment in your home country. This process needs to begin before you even step out onto Thai soil, and should include considering your move here within the context of a competently-prepared personal financial plan. You also need to read widely using books and the internet to learn from the mistakes and successes of those who came before you. There is a lot of knowledge available to you – don’t be impatient – invest some of your time to (potentially) save a lot of your money.
Make your retirement to Thailand your crowning glory and source of envy to those you leave behind back in the suburbs. Don’t make it into something you later cringe just thinking about whilst back there with them. As the Thais are wont to say, it’s “up to you”.
Bruce Bickerstaff’s book, Your Investment Guide to Thailand, has just been released by Silkworm Books and is available online or from many major bookstores. See www.silkwormbooks.com for further details