Dream of Siam

Disclaimer: With regards pensions and other investments always seek the advice of a professional Independent Financial Advisor.

Moving to a foreign country and starting a new life is one of the hardest decisions you will ever make - that is, if you are doing it right. What you don't want to do is to sell up and relocate on a whim. That way often leads to problems further down the line. Some people can get away with it, but many others have encountered severe difficulties. If you get it right, relocating to Thailand may be the best thing you've ever done. Get it wrong and you can cause severe damage to your health, career and finances.

No one can live a perfect life or predict all the problems and difficulties that may arise, especially with a complex undertaking such as relocating half way across the world, but a bit of homework and planning can go a long way to making sure that when difficulties arise you are in a better position to cope with them. It's important to point out that people's needs are different and their situation is particular to them. There is no one "right" or "wrong" answer to the question "Should I move to Thailand?", only an answer that is the right one for you and your personal circumstances.

I picked 10 questions for you to consider. There are actually a lot more - but 10 is a good starting point. You will find this a useful exercise if you are undecided about making the move to Thailand. It should also be helpful for people currently in Thailand who are considering moving out.

1) What don't you like about where you are?

You might instantly come up with a list of about 20 gripes about your current location! So do that! Write them down and see what you have on your list. It is really important to take an extra step and investigate your list in more depth. Question each of your items. If you don't like your job, why don't you like your job? If you don't like the weather, does that apply all year round or to just certain months?

The trick here is to prioritise your list of pet hates and finally isolate the ones that are really significant. Once you have the key items you should have a much clearer idea of what it is about your current situation that is pushing you abroad. You might be surprised by what you find. To give you an example you might decide you really hate your job. It might then occur to you that you might be happy if you changed your job, started your own business or studied for a new career. In other words maybe you can solve your problems without having to move to Thailand. As another example consider another common reason for moving to Thailand, the weather. You might suffer from SAD (Seasonal Adjustment Disorder) and feel a move to Thailand would help solve this. But then you might realise you actually like spring and summer where you are and your problem is with the winter months. You might then realise that spending a couple of months in Thailand in your winter is the solution. Of course you then need to look at what you need to do to achieve this.

The main point is you need to be very clear about precisely what it is you don’t like about your current situation. Only then can you be sure that a move to Thailand is going to help solve that issue.

2) What do you like about where you are going?

If you are considering moving to Thailand you might have no problem at all in answering this question! The list could include: blue skies, sandy beaches, great scuba diving, beautiful women, tasty food, cheap cost of living, and the chance to start afresh. Sounds like a paradise? Again you need to take a closer look. Prioritise your list. Perhaps you suffer from the aforementioned SAD and the weather will make a huge difference to your life. Perhaps you want to start a new business but can't afford to do so in your home country, perhaps you would like to retire early and the low cost of living is attractive. There are many possible reasons. But you need to know what is really motivating you. Be honest!


3) What do you like about where you are now?

Again this can be revealing. Typically it will be friends and family. You may find a few other items creeping in here that you didn't expect. You might hate your job, but you might also like the relatively high salary you earn. You might get depressed by the winter weather but love those crisp, sunny winter walks.

People who move abroad often say it's the little things they miss - I've heard people who've relocated to France complain that they miss Marmite! When you answer this question it should be the big things that you concentrate on exploring. The little things tend to be quite petty in the scheme of things and should not stop you from relocating.

You need to be clear about exactly what it is you are going to be giving up. It’s no use getting to Thailand and then missing loads of things from home.

One reason that people move abroad and then return home after a couple of years is that they never really knew why they went abroad in the first place, other than the notion that it might somehow be better. Avoid this - you need to know exactly why you are moving abroad and so getting this right is important. Use the above three lists to really clarify your reasons.

It’s complicated because each situation, home and away, has its own set of pros and cons and trying to work out how it all balances out can be disorientating. That’s why, although it sounds a bit silly, it does really help to write down prioritised lists for each of the questions. You will also get a clearer picture of which pros and cons more or less balance each other out.


4) What problems/disadvantages do you envisage?

You should try to anticipate what problems and difficulties you may encounter in your new location.

Preparation and research is essential. You might be anticipating the heat to be a potential problem, or finding suitable work. By being aware of possible issues, you can avoid getting caught out when you get to Thailand. One such problem is getting an apartment quite far from your work and then having a commute that resembles a descent into Hell. The infamous "visa run" - a trip to the border every 90 days is also another chore the Westerner moving to Thailand will need to endure.

One problem that you might have in Thailand is the language barrier. People often forget about this. It pays to learn as much Thai as you can before you relocate. Yes this is tough, but it is worth it, as even understanding a few words can make a big difference. This is one big advantage of the Philippines over Thailand – pretty much everyone speaks English in Philippines. In Malaysia the situation is similar with English being widely spoken to a high standard.


5) What objectives are you hoping to achieve in your new life?

One of the factors that will ensure a successful relocation is deciding what your main objectives are.

Maybe you haven't got any objectives - you need to get some - fast! By having very clear objectives in mind when you relocate it can help you from going off the rails and save you from wasting your time and money. It is easy to get distracted by various "activities" on offer in Thailand, so you need to keep in mind the bigger picture of your own personal development.

So what exactly is an objective? Here are some examples of objectives: Learn to speak and write Thai within 3 years. Travel to and photograph Chiang Mai and Ayutthaya in the first year. Achieve that new Marketing qualification by distance learning within one year. Become a Dive Master within two years. Note that all of these objectives have time limits associated with them. Notice that all these objectives take your employ-ability or personal skill-set to the next level. They might supplement your main income. For example you might be a part-time dive instructor (or have ambitions to be one) to provide an additional income. The photos in Chiang Mai might be to enhance your blog or travel guide you happen to be working on. You need to keep moving forward in a way that makes sense to you. Standing still is a disaster because it limits your opportunities in the long run. Speaking Thai is a great objective as it opens up new employment and business opportunities.

These objectives might not be the ones you feel are relevant to you, they are just examples. But it is important you do have your own solid objectives. At the end of a period of time in Thailand you want to be able to look back and say, "yes I had a great time and I also achieved X, Y and Z."

6) How will you earn a living?

The 64,000 Baht question!

For most of us work is a fact of life. You need to make a living somehow, hopefully doing something you enjoy. There’s a Chinese proverb that says do a job you love and you’ll never work a day in your life. There’s a lot of truth in that. So you need something that pays the bills and is hopefully rewarding too.

Unfortunately, in Thailand, the job options are a bit limited and the pay sucks. There are a few gems to be had, but these are very few and far between.

The English Teaching industry has been the mainstay of job generation for Westerners in Thailand and this looks set to be the case for the foreseeable future. I’m not going to talk much about the English teaching industry as there are other sites that already cover it in some depth. Typically you will be looking at a salary of around 35,000 Baht per month if you are presentable and have a reasonable CV. The range can be 27,000 to 55,000 per month - a lot depends on the school/company and the location. I am sceptical about making English teaching a long term career in Thailand, if for no other reason that the money is appalling – however, it can be a good “gap” job that allows you to make some money while you find your feet in Thailand. An English teaching qualification is handy to have in Thailand though – you can always make extra money on the side with part-time teaching, which can be a life saver.

One of the best jobs you can get in Thailand at the moment is teaching in a private international school. However, you need to be a fully-qualified, experienced teacher in your specialist subject area (maths, ICT and so on). I was actually surprised at how high some of the salaries were. Many of the best schools recruit teachers directly from the UK and paid UK rates to get them. The range was from 25,000 UKP a year to 55,000 UKP for a more senior teacher. When you consider that food, accommodation and excellent facilities such as broadband, swimming pool and jogging track were all provided for free this is an extremely attractive deal. Even the lower salary range would be around 145,000 Baht per month – which is a substantial income for Thailand. Nice work if you can get it though. If you are really serious about the move to Thailand you might consider getting a PGCE (or similar qualification) and a couple of years teaching experience in a shortage area. You get end up in a very enviable position in Thailand with a little luck.

You might be planning to go to Thailand with a view to setting up a locally-based business. If you have never run a successful business in your home country you would be strongly advised to reconsider.

It’s very easy to get into a situation where you are putting your life savings into getting a business off the ground only to see it eventually crash and burn. Running a locally-based business in Thailand is a minefield and unless you know what you are doing there is a very good chance you will fail spectacularly. Unfortunately there are many Westerners who believe that on arriving in Thailand they will magically become a competent business person. This doesn’t often happen.

You need to have training and experience to run a successful business. There are Westerners in Thailand who have set up successful businesses. If you look at those cases they almost always took a slow, steady and low capital requirement route. They rely on local knowledge or special skills to meet a niche. They start small and maybe have a job to supplement their income too. Gradually over time they build up their business.

Another business option that can work is to go freelance. If you have sought-after business or technology skills these can be put to good use, especially in Bangkok. The capital required isn’t very much. You need to “network” extensively though in order to bring the business in. Activities such as building complex database driven websites, advanced marketing services, business consultancy services and such like all have a good chance of making you some money. The problem will be getting the correct visa and paperwork (which is why many are working illegally).

Remote working is also an attractive option. There are many expats in Asia working remotely for companies on a freelance or salaried basis. With good Internet connection availability this is a desirable option as you will be getting paid a western level salary in western currency. There are also fewer visa/work permit hassles with this type of working. As you are not running a locally-based business in Thailand and as you aren’t actually employed in Thailand you can get away with a Cat ‘O’ Non-Immigrant Visa. Just keep a low-profile and stay out of trouble and you should be OK.

In many ways your best option is to run an offshore Internet-based business. This can be run from anywhere in the world and can even make you money when you are sleeping. You need to know what you are doing of course. One of the big advantages of this type of business is it generates revenue in Western currencies, and that gets you a lot more “Baht for your Buck” in Thailand. You have far fewer visa issues with this route, and as your actual site is offshore it leaves you free to move around other countries in Asia if you so desire, and leaves it less vulnerable to probing by the authorities.


7) Have you considered the alternatives?

There are many alternatives to full relocation to Thailand. You might consider relocating for part of the year. According to official UK figures there are 41,000 full-time Brits living in Thailand and another 10,000 Brits living there on a part-time basis. The real figure could be much higher than this.

It will be interesting to see how this figure changes over the coming year, once the visa changes made last October 2006 have had full effect. The point is - many people chose to live in Thailand on a part-time basis. This makes sense on a lot of levels. They still keep their high Western salaries and secure, highly-appreciating properties, and then spend a couple of months each year enjoying Thailand. This may or may not be enough for you.

If you are really struggling to survive in your part of the world (and some do) then you may have nothing to lose by a full relocation (recheck your answers to the first 4 questions).

Another option is to move to a location that has perhaps better work opportunities than Thailand, but is within easy reach of Thailand. Singapore is a good choice - with plenty of highly paid job opportunities - providing of course you are reasonably well qualified and have sought after skills. A lot of guys who are considering relocating to Thailand do have IT expertise and they would often be better off in Singapore as opposed to Thailand. However, Thailand is very close to Singapore. From Singapore you can have a weeks’ vacation in Thailand for 150 Singapore Dollars all-in - that's including flight and hotel! That is cheap! What's more you are in a position to take cheap holidays to Malaysia, Philippines and Indonesia too. It's all right on the doorstep.

If you are based in the UK you should also consider Dubai. It has the great advantage of being half-way between UK and Thailand. That makes it very convenient for both trips home and trips to LOS. Probably one of the best ways to check out Thailand before permanently relocating is to take a one year career break there. A career break is a gap year for adults. It is quite easy these days to take one without damaging your career. Again it’s important to have some solid objectives for the year, but if you do so a career break can actually enhance your CV considerably. There are a few other alternatives, but you get the idea. It's worth exploring the various options in a bit more detail.

8) Do you have capital assets that will appreciate?

Something a lot of people do is save up a lump sum - or sell their house in the West and then move to Thailand hoping to live on the interest generated by their lump sum savings. This approach can be problematic. One major reason is inflation.

You need to be aware of inflation in Thailand compared to the interest rate you are getting on your capital, which may or may not be located in Thailand (I recommend out). The current inflation rate in Thailand is around 2.2%, for comparison UK is 2.1%. Inflation can really eat into the value of any lump sum you might have. This effect is particularly noticeable over the longer term. Your pound or dollar will buy you less as a result of the increase in prices inflation brings about. Even if you don't draw your interest for living expenses the value of your capital has been eroded due to the ravaging effects of inflation.

In order to minimise the impact of inflation you need to have an investment of some kind that outperforms basic bank account interest rates. There are two main options here: shares and property. Shares have had a bumpy ride over recent times, but long term (5 to 10 years) a tracker fund is a pretty solid investment. Over the last two years property in the UK has increased in value by an average of 10% in many places. This is a wonderful hedge against inflation.

Over the longer term property prices in Western countries tend to appreciate quite nicely. Price rises depend on location. You will need to determine your local situation. If you are considering relocating to Thailand I would think twice before selling up your house. Crunch the numbers and see if the rental income is greater than the management fee, mortgage and other costs you are likely to incur. If the numbers don’t work you might want to consider paying off a bit more of your mortgage before relocating.

If you can pull this off it's a big win. By way of an example a friend who bought a house 25 years ago for 18,000 UKP recently sold it for 750,000 UKP (yes 750K). He then bought an apartment in UK which he has rented out. He has now permanently retired to the Philippines age 45. If you relocated to Thailand at 30, and planned to retire at 55, with a house rented out in UK you could be sitting on a very substantial nest egg for your retirement years (see next question)!


9) How will you manage in the future?

At some point you are going to want to spend your remaining days kicking back, enjoying life and all that Thailand and SE Asia has to offer. In order to do that it's a fact of life you need money. You need a pension - you do have a pension don't you? If the answer is "no" you need to start thinking about how you are going to fund your retirement.

Unfortunately the aforementioned inflation also eats into any fixed income you might be receiving - the most common form of this being a monthly pension payment. Thailand, unlike the Philippines, does not have a Double Taxation agreement with the UK or many other Western countries. The Double Taxation agreement (UK has more of these in place than any other country by the way) means that if you pay tax on your state pension in another country you are exempted from paying UK tax (currently 22% basic rate). Further, if the UK government pays the state pension to a country that has such an agreement in place the pension is index-linked. This is very significant.

For UK pensioners retiring to Thailand this means your State Pension is fixed at the level set on your retirement. That is after 10 years (or 20 years!) of retirement you will still be receiving the same pension payment - meanwhile inflation will have eaten seriously into the value of your pension payment - as the cost of everything will have gone up! In contrast, when you retire to Philippines from the UK your pension payment is index-linked, which means the amount you receive increases in line with UK inflation rates and helps defeat the ravages of inflation. The Philippine government abides by their agreement with the UK and taxes your pension - however, they very kindly charge you a rate of 0% (yes zero that's not a typo). That is you receive your UK pension in Philippines index-linked and tax free.

Like Malaysia they have not been slow to see the massive potential in being a retirement haven for expats. Thailand, as ever, still lags behind in terms of legislation and incentives. As an aside, if you are considering relocating to SE Asia you should consider Malaysia's "Malaysia My Second Home" programme.

The MM2H programme is exceptional in that it allows you to own up to two freehold landed houses (or condos if you prefer). This doesn’t require any dodgy practices such as setting up holding companies or putting it all in a third parties’ name. You own the property and land freehold outright. The programme also gives you a renewable ten year visa. No more visa runs - ever. There is no age limit, so people of any age can apply to this programme. There are many other advantages too. There are some issues, but most can be worked around easily. The programme works particularly well for people who are retiring and also people who only want to spend a percentage of the year in Malaysia. One of the advantages of this scheme is that the Malaysian government has put its reputation on the line in support of this scheme, which means they come down hard on companies (developers) who attempt to rip off foreigners. The system isn’t perfect and I don't have space to go into the details of the programme here - try Google. It may be a great alternative to Thailand for some - and Thailand is always within very easy reach.


10) What's your escape plan?

Never relocate anywhere without a way back.

Before moving be clear about what your “exit strategy” is. You never know when you might need it. At an absolute minimum your escape kit needs to consist of enough money for a ticket home. Do not touch this money under any circumstances.

Ideally your escape fund should be left with a parent or sibling with the instruction to use the money only to buy you a ticket home. This may sound a little extreme. Unfortunately, there are many Westerners in Thailand who are completely broke. Typically, they spent all their money on girls or having a wild time, trying to get a business off the ground, or they weren’t able to earn enough to cover their flamboyant lifestyles and dipped into savings until there wasn’t anything left.

Also if you marry a Thai girl you might find all sorts of requests for money arise from relatives you didn’t even know you had. This can strain your finances unless you stand firm.

If you kept your house back in farangland and have some long-term investments to cash in so much the better. Not everyone is in that lucky position but you need to have something to fall back on. If you do decide to move back and you’ve been meeting your objectives (see question 5) then you will be in a much stronger position to hit the ground running on your return.

There are many reasons why people want to leave Thailand and go home. Sometimes they are just bored with it, they might feel they can’t build up something of substance in Thailand, they may feel they are wasting their life, career opportunities may be slipping by, they get tired of the senseless visa runs, they might just miss home. Some have had enough after a year, others want to call it quits after maybe 10 years. Some are quite happy to stay in LOS until they die. You never know. So play safe and keep that ticket home somewhere safe.

Summary

There are many important issues not touched on in this submission. For example healthcare or visas were not mentioned. There are many other topics that were not covered too. Hopefully though you will have started to jot down some ideas and thoughts and have a clearer idea on how to establish the pros and cons of moving to Thailand for your personal situation. Make sure you are moving to (or out of) Thailand for the right reasons – or at least you know exactly what those reasons are, have some solid objectives and always have an exit strategy.

Good Luck!