In his work as a financial planning consultant, Richard Cayne of Meyer International occasionally meets people that, despite having a good amount of wealth, say that they don’t have use for the services of a financial planner such as himself. “What is their reasoning?” you might ask. The reason is usually that they consider themselves too “conservative” for investing and feel that it isn’t a safe thing to do with their money.
Though he’s not offended by this, it never fails to surprise him since he thinks that investing your money is the only safe thing you can do with it.
In the past, he has had conversations with people that consider themselves too conservative to invest. They often go something like this:
Conservative Person: “I’m a conservative person, I don’t invest my money.”
Richard Cayne: “So, what you’re saying is that you’d rather have your wealth dwindle away by erosion or inflation than try any investments at all?”
CP: “Well, no, not when you put it that way.”
RC: “Wouldn’t you rather buy some bonds or other low-risk financial products that will at least keep your wealth at the same level it is today?”
CP: “Well, okay, maybe I would.”
The moral of the story is that you can, should and need to be doing a bit more with and for your money that just leaving it in the bank – even if you want to be conservative.
Finances and the word “Conservative”
The funny thing is, according to Richard Cayne, that you’d think a person that considers themselves “conservative” would be doing everything they could to create monetary safety and protective measures for themselves, their family and their wealth. It’s not clear how the word “conservative” came to be associated with people that didn’t want to make provisions for their wealth at all.
A conservative person would certainly never go out and spend ostentatiously or carelessly, but you’d certainly think they’d want to protect what they have in any safe way possible, wouldn’t you?
According to Richard Cayne, “failing to make ample provisions in your financial planning to cover you for, at the very least, the amount that inflation will erode your wealth is not conservative; it is just foolish.”
He went on to note that the idea of being conservative, financially and in any other way, means planning and being prepared and proactive for any eventuality – especially one that is a definite – such as inflation and wealth erosion.
To learn more about low-risk investments, wealth protection and other finance topics, Richard Cayne and Meyer International can be reached at (+66) 02 611 2561.
There are many ways to invest your hard-earned money and each one has it’s advantages and disadvantages. There are traditional investments such as bonds and mutual funds as well as more modern options such as equity crowdfunding. There are offshore jurisdictions and investing in hot new markets. Real estate is an area of investment that always gets people excited and Thailand, in particular, is a place where many people want to invest.
According to financial planning consultant Richard Cayne of Meyer International, they see Bangkok as a bustling metropolis that hosts locals, foreigners, vacationers, expats, business people and retirees from around the globe. The demand for high-quality rental real estate is high.
Investors also see the opportunity to invest in gorgeous villas and luxurious resorts on any number of Thai islands and vacation destinations in the country.
Whichever sector of the Thai real estate rental investment market intrigues you, Richard Cayne can offer advice and expert information for you to consider before you put pen to paper to sign your name on the ownership paperwork.
Before you sign anything, you need to do proper real estate due diligence. If you can’t visit the property in-person, have your lawyer or one of his staff do so. Thoroughly research the developers and other partners, if any. Have your lawyer do a thorough check on the property, title and all of it’s history.
You don’t want any legal surprises after money has changed hands.
Know the Property Laws
Make sure you are informed about local property laws. Your lawyer or financial planner can help you learn what you need to know. For example, did you know that non-Thais can’t own land in Thailand? That’s right. If you aren’t Thai, you may own a condo or any property, but not the land beneath it. If there are Thai partners involved in the project, then you may own up to 49 percent of a project, but not more than that. Condos on the other hand are easier in that a foreigner may hold the condo is his name free and clear as long as that unit is part of the condo’s foreign quota and they all have up to 49% available to foreigners. In other words if you choose to buy condominiums or apartments, remember that only 49 percent of the units in any single building can be foreign owned – and that does not just mean you. That means that, collectively, only 49 percent of the units can be owned by non-Thais.
Ask a financial planner such as Richard Cayne to explain the ins and outs of what you can buy and how.
What to Buy
Now that you know a bit about what you are legally allowed to own, perhaps it has focused your idea of where you would like to invest in the Thai real estate market and what you might like to buy. Investing in property is exciting and the Thai market is one of the world’s hottest. With the right advice from the right team of professionals, you can make a great property investment.
To learn more about real estate investment and other finance topics, Richard Cayne and Meyer International can be reached at (+66) 02 611 2561.
While topics like offshore investments and the real estate market are fun to discuss and exciting to everyone with a little money that they hope to grow, there is one aspect of investing that most people prefer not to discuss or even think about. It’s inflation. Inflation is scary because, no matter how smart, lucky or intelligent your investments are; inflation can eat up the wealth you have worked so hard to build and there is little you can do about it.
That’s what’s so scary about it.
What Richard Cayne of Meyer International says about inflation is this: “No matter how much money you have, you essentially have less money than you think you have. And the more you have, the more you stand to lose, so the more you’re stressed out by inflation.”
“Look, if you only have a few dollars in your pocket and are worried about buying today’s bread and milk, maybe inflation doesn’t matter to you. It’s when you have a lot of money and inflation is constantly eating away at it that it gets scary,” he said.
“Safe is a Loss”
What Richard Cayne is insinuating with this anecdote about literal bread and figurative bread (bread has been, at times in English language history, a well-deserved slang name for money) is that, if you want to build or maintain your wealth, you can’t simply play it super-safe by keeping your money in a savings account.
Even if you rarely spend a dime, inflation eats away at your savings. You need to invest it.
“Learning more about inflation initiates change in people who think they are being conservative by keeping money ‘nice and safe’ in the bank. They start to realize that they can’t do just that. It’s not enough,” said Richard Cayne.
He gave this example: “If you have $10 million and you put it into a savings account where you are earning .5 or 1 percent interest but there is 3 percent inflation, you are losing money every single day without spending a dime. At 1% interest rate next year the purchasing power of the original US$10M is US$9.8M and each year erodes from there”
Instead, he advises clients to make investments at whatever level of risk they feel comfortable.
Think Long-term, not Short-term
Investment might be scary to think about for some people that consider themselves “too conservative to gamble with money.” In these cases, Richard Cayne advises investments with the lowest level of risk possible and that the investors think long-term, not short-term, about their investments.
That might mean that, if it’s too stressful to look at the numbers in your accounts going up or down, you should have your advisor monitor them and just update you periodically. It really doesn’t matter what day to day fluctuations exist but it does matter where the balance on your account is down the road when you need to use that money.
“Don’t look at short-term balances, look at long-term balances,” advises Richard Cayne, “Think about what the balances will be 10 or 20 years down the line, not next year.”
To learn more about investment at any risk level and measures used to stave off inflation’s effect on your wealth, Richard Cayne and Meyer International can be reached at (+66) 02 611 2561.