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Be aware that an index fund, like Vanguard's or USAA's, charge about 0.18% for management. These are not "managed" funds. They are on autopilot and cost almost nothing. Managed funds can become insane and charge 5%. The 2-4% being discussed here is not from the elimination of fees. An S&P500 index fund is dirt cheap at 0.18%. The 2-4% in question here comes from the index itself being flawed.

As I approach relevant events, I am studying the crap out of this healthcare stuff. Guys, it appears to me that the huge issue is pre-existing conditions. I am hanging out on a lot of generic early retirement discussion boards. The people on those do not necessarily care about leaving the country to retire. They just want to retire. Many cannot and it's because of pre-existing conditions. If you are working, the group healthcare plan offered by your employer is required to NOT consider pre-existing conditions. They have to cover everyone they hire. When you are not working, this requirement imposed on insurance companies disappears. They don't have to cover those illnesses you might have if related to a pre-existing condition. It gets complex inside the US because some states have "high risk pools" and some don't. Those with the HRPs cover pre-existing conditions at much increased premiums. But none of this matters if you're living in LOS. Apparently there is a Kaiser plan that extends to government retirees. You guys may have the problem solved for you. If you're not a government retiree, then you have to do this search. Shilo is spot on this matter because inflation is what is going to determine The Number for savings for retirement and healthcare is a big part of inflation. Just remember: the search does not start at how much the premium is and how much coverage in patient and out patient a plan offers. The search begins with rules for pre-existing conditions. Oh, and heads up to the brits. They are used to national insurance. They won't have that in LOS so this search for them will be even harder because the whole concept is brand new for them.

Before I do, a comment re: Eneukman's point. And the comment is "exactly". The point of the study is that the index is flawed. It may indeed describe "the market" in a broad sense, but not in a precise sense. The largest capitalization stocks are powerful in the index. It is possible that they should not be. 1/N addresses that and seems to outperform it. Now, as for variance capture. If you have the index of 100 FTSE stocks or 500 S&P stocks, the overall price fluctuation of that index can be described by an average and a sigma (standard deviation). The motion from 1 and 2 and 3 etc sigmas to -1 and -2 and -3 sigmas can be called "variance". Mathematically, the vast majority of all price fluctuation is within 3 sigmas of the mean. Within the S&P500 index, one can capture 95% of the variance with a "sub-index" of 7 stocks, carefully selected to be non covariant (meaning they are not customers of each other or partially owned by each other and are not interrelated in their share price movement). A study demonstrated this many years ago. In other words, you can emulate the S&P500 with a small subset of it. So I am toying with the idea of examining a way to do the same sub-index thing with a 1/N S&P500 variant. If one can achieve 95% of the performance of the 1/N index with just 7 stocks, one does not need a mutual fund company to create a 1/N index fund for you to buy. You can just make your own. The kicker can be practicality. Dividend reinvestment is free within an index mutual fund. You'd have to pay commissions for them in your own index. This may or may not matter. Anyway, it's pretty cool. This is a bold idea of not accepting the S&P500 or FTSE 100 as being the optimal index for investors. It really does make sense systematically. Because of the emphasis on large capitalization shares, small caps are slighted, and over the long run small caps outperform large caps.

A few other thoughts: 1) I don't know if you are an investor, but if so it may help your frame of mind to understand that years like this one have often been called more frustrating than booms or crashes. Going sideways chews up the calendar and you make jack and the days pass and you make jack and the frustration extends into the rest of your life. If this is in play for you, be on your guard that your frame of thought is not normal because of it. 2) If you're young, a stint in Asian banking could be very good for your career -- and there may be some unexpected benefit of maybe an advanced degree in Singapore paid for by and employer. That could prove to be a big deal as Asia continues to grow and becomes more and more important. Hell, your current employer might find some extra benefit to you being there. They may be able to avoid hiring a local rep for something and you could pick up some extra money as a result. 3) I don't think you're evaluating this right. If you hate California and you want to be in Thailand and the best you can manage is Singapore, it's not like you managed to get half of what you wanted. You got 80% of what you wanted and you are a 1.5 hr plane ride to the new BKK airport.

I'm gonna reply to myself because that was so badly written: An S&P500 Index Fund would have given you about 5% gain last year (2005). It has become customary to call that "The Market". People who think they can beat the market usually don't. Most fund managers fail to do so. The S&P is a capitalization based index. Companies are put in the index and given a divisor. The divisor is capitalization based. When each company's price is divided by that divisor and all the 500 results of that are added up, you get the S&P500 index. A study has popped up challenging whether or not an index fund reflecting the S&P500 is optimal for investors. Other indexes based on other criteria not only surpass the S&P500 in backtesting, but they do so for a clear and rational reason that is systemic and should work long term. If instead of each company of the S&P500 having a divisor you merely made all the divisors = 500 then you have a 1/N index and it is no longer capitalization weighted. Such an approach beats the S&P500 in the last 40 yrs. Note that no one changes the companies. They are the same companies. They are just no longer capitalization weighted. They are all equally weighted. An index fund that was based on this 1/N index would beat the S&P500 index by 2-4% / yr on everage over 40 yrs. The same thing can be done to the FTSE 100. Alternate index funds are being created for investment.

Spent a lot of time in Singapore over the years. A bit of background: Singapore is and has been for about 30 years the dominant power of the region both financially and militarily. They take very seriously the military threat unfolding in islamic Indonesia. All of their military strategic planning is strictly offensive. They have reasoned, rightly, that they cannot defend such a small territory so they will fight all wars on the enemy's territory. Or rather, over it. Singapore funds very high quality Air Force with F-16 avionic block versions far superior to Thailand's. Singapore is hot and humid. It is cheaper than the US, but it is much more expensive than Thailand. The language is largely English. The streets, schools and most all else is modeled on what the Brits gave them when they controlled the place. The city is clean, more modern than many US cities and you can have high speed internet anywhere you want it. Hops to LOS on Air Asia (like a Southwest clone) are cheap and easy. With the new airport going in, you'll be that much closer to Pattaya. All in all, given the income possible in Singapore vs Thailand, this can work. As for your overall perspective of hating where you live, I think you're going to find that anywhere you happen to be, you're indoors working most of weekdays and therefore it doesn't matter where you live on those days. Weekends . . . there is Air Asia.

Folks, Those of you who are using or plan to use personal investment portfolios as a source of living expenses might be interested in the following. Warning: esoterica follows. A few months ago a study in the US emerged concerning the concept of index mutual funds. It has been known for some time now that most "managed" mutual funds, with costs embedded within the fund to pay for that "management", tend to underperform the overall market. In the US the index that measure the market is usually quoted as either the Dow Jones Industrial Average or more recently the Standards and Poors 500 Index. So what this means is that some managed fund from the Fidelity or TRowePrice fund family tends to underperform the index. In other words, since you can buy an S&P500 index fund, why are you paying managers to underperform it? The same is true in the UK, I believe. The FTSE All Shares index is the equivalent. I don't know what y'all call mutual funds there but I suspect you have equivs. Well, the study in question that emerged says this. The S&P500 (and the FTSE All Shares) index are capitalization weighted. A company that is a part of the index is given a divisor that reflects its capitalization share value on the day it is added to the index. What this then means is that at the end of a year the companies in the index that are most heavily weighted within that index are the companies that define most of the motion of the change of the index. It means that the index becomes concentrated and that the companies with a price run up are heaviest weighted (because their capitalization has increased). It is not clear that this definition of "the market" or that this method of creating an index fund is in the best interests of investors. The issue is not so much what defines the market as what sort of index fund, with its very low costs, is best for investors who don't want to pay underperforming managers. In other words, according to Seigal in the link below it appears that there are indexes that are easily defined that in a non data mining sense can beat the S&P500. Well, the debate has been underway in the US for about 5 mos. It has now reached the UK and they are on top of it like white on rice. Here's a link: http://money.independent.co.uk/personal_fi...icle1189590.ece A thought I'm toying with is carefully noting that it has been known for a long time that 7 selected, non covariant stocks can capture 97% of the variance of an index. In other words, I'm toying with the idea of creating my own index to seek the 2-4% advantage claimed over the S&P and paying no costs at all. The idea is not to pick stocks that will do well, but to pick stocks that emulate this non capitalization based index one might envision. It's an interesting discussion underway and probably the first credible challenge to indexing that has emerged on The Street in 25 yrs.

shilo, I don't think domestic policies cover you overseas. Maybe you can find one that does, but this is why TravelGuard exists in general -- to cover medical costs encountered during vacation elsewhere. There are possible reasons to get a policy before quitting, but I suspect this isn't one of them. I would suggest that what you have to do is contact the health plans that do business in Thailand -- maybe thru the Expats club -- even before you arrive just to ask them what "pre-existing" conditions means for them. Given you were a smoker and are overweight . . . I'll tell ya, I would be investigating all the particulars with phone calls to insurance companies before I quit my job. There are a lot of retirement forum boards online and even for people who are not leaving the country, health care ins. can get very firmly in the way of retiring early. There ARE ways to get insurance even with pre-existing conditions, but sometimes the only way is to move to a different state that has different laws imposed on insurance companies. Those companies have to be in business to make money and they can't possibly give you coverage without a premium boost -- but the point is if you are unlucky enough to live in the wrong state it can be impossible at any price to get coverage. But if you move, it can be done. See this website: http://www.healthinsuranceinfo.net/ It's run by Georgetown University and they keep it up to date. Let us know what you discover that fits you.

Saturday night introspection by a bunch of guys who are not pleased. In general. Not pleased. All of us. The change of residency -- gotta move there and seem to mean to stay there. Nevada won't be the one to complain. It will be Calif or NY or whatever other state wants your bux. It will be THEY who complain. The key is to stop their curiosity before it gets underway. Do not just stop filing tax forms there. That will trigger the curiosity. Time everything so you file a single part year resident form the year you move. That single item will answer their questions and put the matter to bed. Then you do not have to keep property or an apt in Texas or Nevada or wherever. Just have a place for a brief time and do NOT keep anyplace where you used to live. If you have to visit family in the old state, do not ever let there be a paper trail of that. No using their house for an address. No using their house to stay in for some medical thing. That is just begging for trouble. You can visit but you can't stay and there should be no paper trail of the visit. If you own land there, sell it. Period. Sitting by the pool doing nothing. That is gonna work for a while. Not forever. But yes, for a while and it will be marvelous. Boredom is what it is, but we have computers, books, TV, travel, friends around town, a new city to explore and know, hobbies discarded years ago -- there is no need to be bored. Senior officers with advanced degrees taught classes via morse code to POWs at the Hanoi Hilton. Those guys had every right to be bored but they fought back against it. We'll have no right to be bored, and won't be. New skills. Old skills. Sailing. Tennis. There's a private airport nearby Patts. Maybe some private flying to return to -- budget for it. Music? All downloadable. Concerts? Some guys will find rock and roll performances somewhere. Probably ditto classical -- maybe in Singapore. Art? Probably, somewhere, of an Asian sort. Have to broaden horizons. Wimmen? Taken care of. Zero effort. Something I discovered years ago travelling on vacation. People who travel are usually interesting because they have done interesting things and can talk about them. The guys who retire to Patts will have that, as well as the women, in common. They will be interesting and gutsy people to know -- as opposed to the robotic drones around us who live their lives without straying 50 miles from where they were born. Ambitions? A significant question. Does "early retirement" equate to betraying one's own goals and ambitions of personal advancement -- even if you don't know what that was to mean? I don't know. It's annoying. Anyway, Saturday night.

I have not moved but this is much on my mind and my trigger date is defined more by the market than the calendar. Two things: 1) I plan a maildrop / forwarding service in Nevada. The rules for domicile for tax purposes seem to sum up as . . . did you move there and did you intend to stay there. You only have to move there and intend to stay there . . . for a time. I think the key is to be there (there being a zero tax state) long enough to file a tax return there, meaning a part year tax return for your old state. That way the old state has a record of where you went. It stops an investigation before it even starts. "Where did Shilo go? Why aren't we getting taxes from him anymore? Oh!! Wait, look here. It's a part year resident tax return he filed in 2007. He moved to Texas and paid us taxes for the part of the year he was here. Okay, so that answers that question. Next case." You don't have to still live there. It just has to be the LAST place you lived before leaving. 2) The idea of having a body checkout makes sense, or not. No question it can matter in the context of spotting something. But. It also documents a pre-existing condition into the database if one is found. It MAY (I am not sure of this, it's a maybe) BE better to make the move, get your insurance in Thailand and THEN get checked out. But . . . I'm not 100% up to speed on this. It's worth debate.

Two suggestions: 1) At no time have alcohol involved when dealing with this problem. 2) Put the house and land up for sale at your fair asking price that will get offers, accept one of those offers as soon as possible, close the deal and walk away. Far away.

I confess I don't have a great read of where the transition threshold is for working overseas, but I think there is one. There are a lot of bankers who work in Hong Kong. They make western salaries, pay Asian cost of living and save/invest one helluva lot of money over 10-15 yrs. In that business, they don't fall behind. I've talked to guys who go to Asia to work in other fields and the one thing they mention that catches my attention is that they work on "old stuff". In whatever field that is not finance, they do not stay current. Asia doesn't innovate construction techniques, or oil drilling techniques or whatever. Asia uses stuff already done. So you will not stay current. This can be a problem. When the next technology arrives, the companies just hire the next crop of expats from the US and UK and you're put out to pasture. Not sure what the cure is for this, but being aware of it may help. It would seem to say you need to go home every few years to get back up to speed.

Usual caveats, guys, as regards "pre existing conditions". If you have had a heart attack, you are in a special category that insurers do not want to touch. How broadly the term "pre existing conditions" is interpreted to be is dicey. I have heard of guys on hypertension medication being said to have a "pre-existing cardio vascular condition". That means no coverage for stroke, heart attack, kidney failure and a ton of other things. The pre existing condition clauses are, frankly, more important than the price. You have to get past those clauses first before you would even look at price. Heads up.

A thought re: low depreciation on cars. This is a big deal in the world of leasing. When you lease a car, you are paying for: 1) interest on the loan that funds the decline in value of the car over time 2) the amount of decline in the value of the car I have no idea if leasing is even offered in Thailand, but if it was it would look something like this in a low depreciation environment: The car costs 1.2 million baht. You're going to drive it for 2 yrs and when you turn it back in it will be worth 1.1 million baht. So all you're financing is 100,000 baht over two years at maybe 8% interest. So 120,000 baht is your two year's rent on that car. That's 10% of the original value of the car. They make 8% on the 100K baht loan. That's their source of income. The upside on this would be that you get to keep the remaining 90% of the car's value in the bank at maybe a 5% savings rate (in contrast with buying the car outright). That's 1.1 million at 5% or 55,000 baht per year over the 2 years or 110,000 baht (non compounded). Yes, it almost funded the lease payment. That's why this caught my attention. If there's no depreciation on cars in Thailand, then leasing them should be pretty damn cheap. And since the leasing company can't make much money -- I'm suspecting it's not popular.

Interesting TT. How do they get insurance? Will not the insurance companies declare the value to be decreasing each year and cover it only for that amount?

Oh hell, since I f'ed that up, here's another tidbit I have noticed guys not paying attention to. "I have a car. Gas costs me X baht, insurance is Y baht. Oil changes Z baht. My annual costs are therefore X + Y + Z and monthly /12 and I don't pay the bus or train or tuk tuk or mototaxi to go to BKK or up north or out of town." No. You forgot depreciation. It's not some vague bullcrap thing. It's real. You buy a car for 600K baht, you ain't selling it 3 years from now for 600K. In the US the depreciation rate would be about 300K of the 600K baht over 3 yrs for a brand new car. That car therefore cost you XX = 300K/3 years = 100K/yr. So car annual costs are X + Y + Z + 100K. Don't ignore it. Don't pretend it's not there. It is. It is money every single year dropping off the car onto the ground and evaporating away. The car ages, it's worth less. It ain't an investment. It's an expenditure. I left off maintenance on the presumption something < 3 yrs old won't need it. If you get an older car the depreciation rate is usually slower, but you'll pay more for repairs.

A bad error on my part Ting Tong. Good catch, and frankly that makes the situation more profoundly serious. The error derived from my difficulty accepting that a condo might only cost $10,000 USD. Turns out I should have trusted that it would be 100K USD and adjusted the baht total accordingly, not vice versa. The calculations were done in baht. 5% of 400K baht is 20K baht per year, but that is now moot and wrong. I suppose the example is very poor because no condo will cost that little. I'll scope the condo threads and see what is a typical number and re-present the numbers. Okay, I'm back. Typical condo costs that people are looking at seem to weigh in at : or ((the conversion from square meters to square feet is 1 sq m = 10.7 sq feet)) Americans think about living space in sq ft, not sq m. Typical 2 bedroom seems to be 105 sq m (1020 sq feet). This would make typical 2 bdroom ViewTalay about 4.2 million baht. So, in general, everything in the previous post in baht should be ramped up by a factor of about 10 for what is typical. Purchase price 4 million baht. Lost interest per yr 200,000 baht at 5% (= 16666 baht/mo). Just because you own the condo doesn't mean you have no housing costs. That lost interest income is a housing cost and should be somewhere in the budget. Y'all can repeat the calculations for the mortgage case. Sorry for the very serious error and well done to TT for popping it. It's all about getting accurate data to guys. It's not about anything else.

Perhaps a new tidbit of sorts I haven't babbled about before. The quotes of monthly living expenses vary because guys have different tastes, ages, drink/smoke or don't drink/smoke and like to take trips or don't. But one thing that can be addressed explicitly is the concept of : I own my condo so I don't have any monthly housing expense. No, gents, it doesn't work that way. Let's take the case where your condo does not appreciate. You buy it and someday can sell it for what exactly what you paid for it. No gain; no loss. You ante up maybe what, 400,000 baht for it? Maybe that's a snazzy condo. Maybe not. Don't know the square footage. Don't know what that equates to as the going price. That's $100K USD but lets talk baht for the Brits. So: did you pay cash? No mortgage? Let's assume so. You took 400K out of your bank account and took possession of a condo. Now you pay no monthly rent. But. What you do pay is what that 400K would have earned in interest if it was still in the bank. At 5% annually that's 20,000 baht per year. / 12 = 1666 baht per month. So owning that 100K condo costs you 1666 per month in lost interest. Yes, it's likely rent would be more than that, so you're ahead, but your cost is not zero. It's just less than it would be renting. Now let's look at the case of having a mortgage. Say you borrowed 300K baht and put up 100K baht of your own money. That cost above just described is now 1666/mo divided by 4 or 416 baht per month. Added to it is your mortgage rate on the 300K borrowed. Call it 6.5% (??). That's 19500 baht/yr or 1625 baht per month. Add those two together and you get 1625 + 416 = 2041 baht/mo. Yes, no question now you have to deal with upkeep, maintenance, plumbers, broken refrigerators, everything that a landlord used to deal with. That is all part of housing expense -- but no way anyone can put firm figures on it. The point of this is owning the condo does not mean one's monthly housing expenses (aka rent) is zero. Some kind of avg monthly number needs to go in that blank on the piece of paper -- and it's not 0. I'm not addressing risks of not being able to sell. Not addressing risks of property tax (if ever). Not addressing lots of stuff in the buy vs rent decision. I'm must addressing this one tiny matter of a few thousand baht a month that may be inappropriately absent from budgets.

Ha. First base, 2nd base, 3rd base . . . baseball. The runner starts at "home". He hits a ball. If it is not caught and he can run to first base (90 feet away) before the ball gets thrown to a guy "guarding" that base, then he has "made it to first base" . . . having hit a single. If another batter behind him now also hits "safely" that runner on first base will advance to 2nd or 3rd base. His final goal is to return to "home" and doing so scores a run and he is done and goes and sits down for a while. So getting to 2nd base means you've made good progress. Getting to 3rd base means you've made a lot of progress and are almost home.

MrStein, I have a sense here that there may not be common calibration in what's being discussed. Much of what you're saying seems to be pointed at accumulating big money. See, that comment is somewhat contradictory to the title of the thread. The idea of CD laddering is for people who are already on 3rd base (the brits have no idea what we're talking about). If you already have a nestegg that you're pretty sure is going to last the rest of your life, and do so providing a very comfortable lifestyle, why take risks? Maturity laddering is what one does to maximize the fixed income niche of an overall asset allocated portfolio. It is not the path to riches. It is a strategy pursued by someone who already has some riches, wants to divide them up and place them in different categories (and risks) of investment, and maximize each one. The BMs here either retired or longing to retire in LOS either have a nestegg to fund it or a reliable pension that will carry them for many years (or both, with the nest egg making up an expected shortfall in pension). The point of these money threads is to . . . hell, I don't know the point. I was going to say to keep guys from thinking that they have enough when they don't -- but frankly the other side of that coin is just as bad. If a guy misreads the numbers in the other direction, then there he is miserable in his home country for far more years than he needs to be. Years needlessly miserable are a bad thing. So, I guess what we all seek is the right point when it can be done. Not too much, not too little.

You know what, Gary, I knew that was coming as soon as I hit the send key. Inversion of the yield curve. It's not the normal state of affairs.

Let's not talk about what is enough or what you plan. Let me offer a thought that is not rocket science and well known in the literature. It's called laddering. You just divided 400K by 25 and got your $1333/mo (49K baht). Clearly you can park some money in the bank for a few percent interest and improve on that, and I'm sure you know that. This is an idea that shows you how to optimize on that few percent. Let's talk about CDs. For the UK guys, a CD is a certificate of deposit. It is you lending money to the bank for a specified maturity period. Dunno what you call the instruments in the UK. Generally a 6 month CD will yield X%, a 1 yr CD will yield X+x%, an 18 month CD will yield X+y% etc up to maybe 5 yrs. The longer the CD the higher the interest. Well the problem is you have to tie up your money a long time to get those bigger interest numbers. If you put your money in the 6 mo instrument, you only get X% and you have to do that in order to have access to a small chunk of it for living expenses. To get the X+y or X+z number, you are tied up longer. Well, the trick is to do this. Divide your money evenly among maturities. Example, with your 400K. Put 80K in 6 mo CD, 80K in 1 yr CD, 80K in 18 mos CD, 80K in 2 yr CD, 80K in 2.5 yr CD. That's 400K. Your overall interest rate that day is the average of all these CDs' rates. This is called laddered maturities. Now the magic. When the 6 mo cd matures, you'll take out some of it for living expenses (but not all cuz you didn't spend $80K in 6 mos), put the remainder in a new 2.5 yr CD. 6 mos later that 1 yr CD will mature and you'll take some of it and spend it on living expenses -- and take the remainder and buy yet another new 2.5 yr CD. Stop right here and look at what is happening. Your overall yield is going up (assuming interest rates didn't change). You have incrementally more and more money in 2.5 yr vehicles and yet are still getting access to a chunk of it every 6 mos. You just keep doing this forever and you will have access to chunks every 6 mos but will be earning 2.5 yr maturity interest rates. Yes certainly you will encounter eventually a 6 month period that does not cover your living expenses. Just see that coming and hold out the remainder of the previous 6 month period so that combined you're covered. Then the next rollover goes to 2 yrs instead of 2.5 yrs. It doesn't matter what the precise details are. What matters is that we understand the concept of how laddering lets us capture the higher interest rates without tying up all our money for 2.5 yrs. Yes, interest rates may change. You have no control over them. You must construct your strategy based on the things you have control over. The ability to ladder is one of them. Time for bed.

You know, we all just leap to the keyboard and start pounding out gems when we're in various moods. It's Friday friggin night in the US, a hard week of work is done and worse weeks are on my particular horizon upcoming with probably half of the nights of the next month spent in hotels in three different time zones -- and MrStein uncorks this little gem of a troll. Nah, it's not a troll. It's too sophisticated. You know what it is? It's Friday friggin night wherever MrStein happens to be too and he wants out of his situation as fast as he can get out of his too, and he's looking for the way and thumbs up to that. I know nothing of 1st trust deeds. I know nothing Las Vegas real estate (I was there over the 4th of July weekend; got a buddy there in the real estate business; he says flat a few years but no collapse). I don't know what the lawyers involved in trust deeds charge. I don't know where you buy them or sell them or hold them. I don't know jack about them. I know something of the investment capital business. That doesn't mean I know jack about "the market" or what it's gonna do. I just know something about investment capital. I gotta tell you, guy, if there existed in the world a vehicle that does 12% guaranteed every year Goldman Sachs, JP Morgan, Credit Suisse, Citibank-Saloman Smith Barney, hell, name every firm in the world -- would be in it. MrStein on a Pattaya board and typing from the US southwest is not going to know about this with the word not having reached Goldman. Look, let's not talk math on Friday night. Let's just talk about the way yields are defined. Government bonds, any major government, provide a return. They are the by definition "riskless rate of return". They can't default, in the eyes of the market, because if they did the whole world would end and therefore there's no point in assigning them a premium based on risk. They have zero risk. If they defaulted and the world ended, nothing would matter anyway so the risk is zero. They ain't yielding 12%. They are yielding about 5%. For you to find any vehicle at all that yields more than 5%, currently, there has to be, by definition, risk. And look, this isn't magic or regulatory. It's just what happens in any market. If you buy a piece of paper that says it will give you $1 per year guranteed for 30 years, what is it worth? Well, it's worth whatever price will cause that $1 to equal the current 5% return. That is, $20, if you believe the guarantee. If I don't believe it, I'll only be willing to pay maybe $18, because I'm not really sure I'm gonna get that $1/yr. That's risk premium. That $18 price and $1 return equates to 5.5% Well, this is going to happen in your trust deeds, too. If they provide 12%, you think, and they are utterly guaranteed, then Goldman Sachs and those other guys are going to avalanche into that world and bid up the price on those deeds such that they yield not 12% but 5%, if that guarantee is as good as a government. And here's the real kicker. If it truly was 12%/yr for utter sure for 30 years, why are you telling anyone about it? The word will get to JP Morgan and they will show up, bid up the price and reduce the 12% yield and you're screwed. This is the way all markets work. Substitute rent and price of the rental property for the $1 coupon and the $20 price above and it's the same thing. If you can get higher rents from renters in a property, that property's price is going up, to keep the overall return equal to that property's category or risk. blah blah blah Why am I doing this? Thumbs up on the intent, guy. "Early" retirement is the only way to get extra "years on your life" so it's damn sure worth working towards.

Lots of good stuff in MrStein's post. This item above I want to jump on because it's related to a pet hobby horse I have here on the board, and because I want to go to bed leaving the guys with an upbeat note. I usually pound on my keyboard here telling guys not to dart off to Pattaya without satisfying the magical 4-4.5% money issue for extraction from their assets. Well, I have a bit of good news for all. The 4-4.5% perspective is based on history for several things. 1) The stock market, 2) bond returns and 3) inflation. The calculators that come up with 4% as the extraction number presumed that inflation would continue to increase your living expenses the rest of your life. Well, there is now considerable doubt about the last item. "In a report published in the Journal of Financial Planning last year, Eau Claire, Wis., financial planner Ty Bernicke examined federal statistics and discovered an assumption-bursting fact: Seniors actually go through less money as they get older. By contrast, many financial advisers figure that retirees will spend at the same rate until they die, and they rely on this conventional wisdom in crunching numbers." More on this here: http://www.usnews.com/usnews/biztech/artic...29/29saving.htm The gist is this. A guy looks at his current spending and projects it forward at 3% (inflation) per year to see what his budget will be each year in his final years. I even do this personally to find an average spending level over that time ((current spending X (1.03)^30th power) - current spending) / 2 = avg per year over 30 yrs. Well, there's a pretty good chance this is wrong. MrStein's quote above is involved in the reason why. As you get older, you do fewer things. You probably travel less. You probably drink less. You do lots of things less that cost money. It is possible and even likely that a relentless 3% projection forward is not a reasonable way to estimate your future budget. No, we don't have a crystal ball and maybe 3% will prove low, but in terms of what we DO know, it's probably going to be high. What this means is the 4-4.5% magical extraction number is likely to be pessimistic. There are no reliable estimates out yet of how much pessimistic, and the whole matter is in heated debate, but . . . what I've seen now looks likely. 1.03^30 is not the right equation for estimating future budget. It's too high. This is good news for guys retired to Pattaya.

You former US civil servants and retired military who can get health care overseas have a big plus, as long as it lasts. When one turns 65, as of now, private insurers start saying no. And I mean no at almost any price. The pre-existing conditions total have accumulated to an unacceptable level by then. So this becomes a major reason to keep an eye on Medicare. If expats succeed in getting Medicare to send money for treatment overseas, the age 65 problem disappears. If not, one has a very difficult issue to address at age 65. Keep an eye on this, guys. When govt pensions start to erode under the pressure of demographics, one of the first things that will be eroded will be healthcare advantages. Just like reducing your inflation adjustment, this will be a quiet thing for the politicos to attack and outrage will not result. Stay alert.