Owen`

This is the first manifestation of politics in the matter. "Can't drill your way out of it" is a Democrat buzz phrase and they adopt it because environmental extremists are part of their donor base. But if one is facing incipient starvation of cities (where Democrats live), one does have to ask a much more direct question . . . just what good is that oil doing anyone sitting underground? Sure, if oil is depleting and its end is inevitable then alternative approaches will need to be sought, and yes, its "end" doesn't really arrive because oil shale and tar sands have yet to be harveste

Two pensions plus SS only adding up to 29K is surprisingly low. You may want to recheck that. And if SS is part of it, then I suppose you expect to be 62 in 2010. If so, recheck your health insurance. At age 65 many government health plans transition themselves over to Medicare, and Medicare won't send money outside the US. If this holds true for you, you really only get 3 years before you have a problem. Inflation. I probably ought to babble in a different topic thread created for that purpose, but what the hell. Oil. The oil problem is happening in an election year in th

Several addenda: 1) You seem to have some kind of income from a government pension at age 38. Maybe such things happen in the UK. If so, okay, and yes, it is inflation indexed (for UK inflation, which will be different than Thailand's, higher or lower at different times, one supposes). That will lessen your concerns a bit. Jacko's mention of inflation remains legitimate, however, because of the other sources of income you have that do not appear to be indexed. 2) The various calculators online (like Firecalc) do indeed focus sharply on the magical 4% number, but that number is not

I don't see any way this can work and I suspect what we have here is a lack of some information and some erroneous perspective borne of being 38 yrs old. You expect 55K baht per month at age 38 from interest on savings plus a "pension". To be drawing a pension at age 38 suggests you are disabled in some way, which introduces other issues. Ignoring that for the moment, maybe a condo of adequate size for two people is indeed 6 million baht, but one suspects less. If you could downshift that number just 33% you would have an extra 7000 baht a month available. So here's the thing. Even

A bit of economic musing, per Eneuckman's comment. Budget deficits and "government debt" have associated with them a somewhat insidious aspect of camouflage, namely, they can pay themselves off. Meaning, a country can run a budget deficit forever and see the value of its debt decline. How? Inflation. If a country has XXXXX of debt at an average interest rate of YYY% that generates ZZZ of interest costs, all that needs to happen is have the country's government pay 98% of ZZZ in each year's budget, which can be still in deficit, and the annual 3-4% inflation will erode the valu

Joe, yes, there are "casino costs". I laid them out. They are 0.4% (annual) charged by the sponsoring outfit that runs the index and manages the ETF. It's like a mutual fund. The fund company, like Fidelity or TRowe Price, charges a fee to manage the fund -- buying and selling stocks within it to maintain some mixture they have declared sacred. A typical managed mutual fund will charge about 1% for that service, annually. You will never see it come out of your account. The price of the fund itself is adjusted. Additionally, these ETF things are bought and sold like shares of stocks,

Perhaps bad phrasing on my part. "Portfolio insurance" is a phrase that was invented back in the late 80's. It's mostly "derivatives". Meaning call or put options. If you owned some shares of some company and you were afraid it would go down in some time period, you could buy put options, while still holding the shares. Put options increase in value if the underlying stock decreases in value. So by buying put options you were "taking out insurance" on the stock itself. You held the stock, which decreased in value, but your put options increased and if you calculated how many puts you

I have no predictions. There are some new investment vehicles out, however, that you folks can use to insure whatever decision or timing you choose with moving money from one currency to another. http://www.etftrends.com/currency/index.html

Eneuckman, this is another quirk of US tax law driving Gary's comments about this. Corporations are taxed on their profit in the US. Some portion of what is left after that taxation is paid to individuals as dividends. And then the US tax laws declare this to be income to the individual to be taxed at his individual tax rate. Dividend dollars are taxed twice in the US. "Double taxation of dividends" has been complained about and ignored for decades. Recipients are the filthy rich, you see, and deserve to have all of their assets taken away to fund the lives of people who prefer t

Be all this as it may be, my overall point is that there is nothing new under the sun. There have been financial crises in the past, and there will be more in the future. The US markets are only down 15% from their all time high, reached just a few months ago. Guys, 15% is not a huge move. The hyperbole we are hearing about the end of the world is coming from people who want their own annual bonuses funded by a government bailout. So far, it's not happening. Every Fed action taken of late has been, in effect, a 30 day loan. All the talk about "providing liquidity" has been made for

SubPrime mortgages. Well, here's the deal for you UK guys. In the US (and not in Canada), interest paid on the loan used to buy your primary residence is tax deductible right off your income. The US real estate industry got this stuck into US tax law decades ago and it is now sacrosanct. If you pay $5000 in mortgage interest and you made $70,000 last year in paychecks, that 5,000 comes right off the top and makes the number 65,000 (before all sorts of other maneuvers take place). This means a home mortgage is subsidized by the US government. The financial industry went out and foun

FYI, the US stock markets closed up 4% today, largest gain since 2002. The overseas markets will follow in lockstep when they open in a few hours. Markets fluctuate. With this move the market is down from its all time high about 15%. The bottom of the 2000-2002 (which started under Clinton, btw) decline was -48%. Financial reporters write their articles to win awards and hold attention so advertisers get seen. They do so on the way to lunch or home for the day, on deadline. They aren't the fount of genius. Neither are the people they quote in their articles, who usually were th

There is almost never anything new under the sun. The US stock markets are down about 18% from their high of October. In the great crash of 2000, the US NASDAQ lost about 50% and then another 20% over the next two years. The S&P measure lost about 48% from 2000 to 2002. There was a recession of GDP growth that lasted several months. The costs of 9/11 and people unwilling to fly and expenditures on security aggravated it, but in the end there were tax cuts and "rebates' and the normal cycle of economic activities and . . . growth boomed in 2003, and 2004, and 2005, and 2006 and started

Interesting. That rule seems to have worked. Also, the pension mathematics will soon fall apart for entire pension systems if they are paying a benefit to widows who are 25. There has to be some downshift in payout for very young age. These are usually indexed schemes and no system can afford to pay an indexed benefit for life to a 25 yr old.

Soc. Security will be one of the last to be hit. Company pensions first, government pensions next (both federal and state), military pensions next, and last Social Security. That's crystal ball future predicting so maybe it's wrong, but my motivation in assessing it is simply that old people in the US vote at a far higher percentage than young people. Roughly 85% of all elderly people in the US draw some sort of Social Security, and most of them vote. The funding for Social Security gets very complex politically as time progresses. There are no alternatives when the matter is one

The UK guys can benefit a bit from this, too. Social Security pays a "full pension" at age 65 (it is already in the law that this number is 66 or 67 if your date of birth is later than X or Y -- meaning they ALREADY increased the "full retirement age" in the US and did this several years ago). If you choose, you can start your pension at age 62 and accept a reduction, forever, of the pension payment. The amount of reduction is 20% if your date of birth would have let you retire at "full pension" at 65, 25% for age 66 and 30% if your date of birth allowed it at 67. The dates of birth for

I don't tend to talk too much about corporate finance in babbling here, but this may be a time it is justified. One of the reasons pensions became so generous in decades past was because accounting (bookkeeping, or whatever the UK terminology is) norms permitted management to offload pension expense into a separate category for reports to shareholders. It was something they could dismiss as "not reflective of the quality of management's stewardship of the shareholder's money". Meaning, it was moved to an outsourced pension fund management company and it no longer involved the corporate m

For any younger guys reading this and looking ahead with glee, odds are high none of these options will be around for you in 10 years or more. Pensions are going away. For private sector and government sector. They are too expensive to fund when the demographics have more elderly than young.

>> I WOULD TAKE % OF LUMP SUM AS THIS IS TAX FREE ,so pay less tax as month pension would be tax >> Get the numbers correct and you'll be good. I had no idea you folks get lump sum pension distributions tax free. That is astonishing and good news for you all. And, of course, if you get it lump sum (provided your net present value is well computed) then the future of the company has no significance. Remember, odds are private insurance will not be covering people past 65 in the future. Plan to go home then.

Here are the things of most interest to you for this sort of arrangement, and I suspect this applies to both UK and US. 1) Is your pension to be inflation indexed? Wait, let me reword that. IS YOUR PENSION TO BE INFLATION INDEXED? There is essentially no question more important that this. If it is not, find out what the lump sum payment options are. You will have to do some very serious net present value calculations to see if they are stealing, but you're an engineer so you know how to punch a calculator. 2) If you get a pension OR a lump sum, are you permitted to remain wi

nidnoyham, talk to a bank about setting up a trust with the kid as sole beneficiary. They will know costs, etc, but you'll have to dance carefully about excluding the mom from access. Maybe let it compound until the kid is 18 and then she starts to get an income stream from it.

See, there is no point in me typing what I'm about to type. But when was that not true of all of our posts haha. Let's ignore inflation that will take 3% per year out of that hoped for 5%, because it takes 3% per year out of everything else, too. The magic formula guys . . . 1.05 ^ (which means raised to the power of) N where N is number of years. You say 5% per year for 10 years is going to get you to 500 pounds? Cool. Here's what that means: 1.05 ^ 10 = 1.629. 750K (picking a number between 500 and 1 million) is your expectation in 10 years. Well, that means as of today

You know what, sinbinjack? You're right. The concepts we talk about are supposed to have value to everyone, but when I glibly say . . . take 1/2 your money and put it in stocks, and 1/2 in bonds -- that is of zero value to guys who worked for a living their whole lives at maybe a low income job. Hey, they made the choice to do that rather than suck at . . . I think y'all call it DOLE. That means they earned some help. What those guys need is a little crash course from the guys here on how to get their money into 1/2 stocks and 1/2 bonds. For Americans, it is index funds at V

Aha. Another similarity. See, the problem with threads this complex is that it is about a subject no one wants to deal with, and it's complex. The combination turns guys away from it, and they simply must not do that. This stuff must be understood or life will get miserable in later years. [One last tidbit, mentioned in previous threads. US Military veterans, do not forget that your military service increases your Social Security benefits and that increase is NOT reflected in the earnings form you get each year. Read about it on www.ssa.gov.]

An FYI that may help frame of mind. When someone's arteries are closed to the point that bypass is the only solution, they are in big trouble regardless because the grafted arteries soon close up after they are put in place. And worse, odds are at least 50/50 he would have died in the hospital recovering from the bypass. The arteries replaced by grafted arteries would not be the only ones clogged. The lesson is cut back on smoking and get some exercise.