COLUMNS

HEADLINES [click on headline to view story]:
 
Winebibbers Grapevine
   
Heart to Heart with Hillary
    
Modern Medicine: Getting Older
 
Family Money: Seeds in the packet never grow

Winebibber’s Grapevine

Potato famine
A thoughtless Sri Racha farmer has been cautioned for spraying his vegetable crops with strong insecticide whilst preserving a DDT free area for his family’s personal consumption. He explained to agriculture inspectors that he was forced to keep a private patch in order to ensure he and his family remained fit and healthy. Otherwise, he added, they would not able to supply the local markets with much needed produce.

Record tops
Empire Records, top floor Royal Garden Plaza, is certainly the place to head for the latest tapes, CDs and musical videos. In the best Empire tradition, their stock is not limited to pop worshippers. There is a good selection of sound tracks from the movies, old and new, and a fair number of classical music CDs. The only place in Pattaya to find Celine Dion, Bruckner’s seventh symphony and the theme from The Bride of Frankenstein.

Mafias again
Every Thai and farang in Pattaya understands the meaning of the word mafia but where does the term actually come from? For sure, not from the book or the movie The Godfather. When the French and Italians were at war a hundred years ago, businessmen in Sicily coined the phrase "Moretta Alla Francia, Italia Avantis" (MAFIA) which translates as "Let the French die, Italy march on!" Or you might prefer the variant said to be popular in Thai political circles, "Many Awful Farangs In Asia."

Breaking news
Local golf courses report no loss of income after senior cops were barred from teeing off until their area is a crime free zone, so the ruling has now been extended to tennis courts in a new crackdown on vice... A confidential report reveals that students in Cambodia must pay $10 to ensure they pass their exams, but in Britain registration fees can be several hundred pounds with absolutely no guarantee of passing a single test... A vacancy for public hangman in Swaziland has been offered to one Terence Pierrepoint who claims lineage from Britain’s famous line of swingers.

Matrimonial arrest
A desperate Rayong man has been fined the handsome sum of 2,000 baht after speeding along the Sukhumvit highway at 130k in an attempt to escape from a highway police squad car with lights flashing and sirens screeching. The accused explained in court his wife had left him for good the previous evening and he naturally thought that the police were attempting to return her to him.

Bailing out
A new sign of the times. Lawyers are warning farangs not to try and skip the country after being placed on restricted bail by local courts, even if their passports are returned. The conditions usually include a requirement for accused persons to remain in Thailand until official clearance is given. Fast track computer systems are now in service at all airports and border posts which can result in being arrested once again. Once your case goes formally to court, the matter needs to be concluded in a proper hearing.

Signing on
Notices seen around town. At a department store with a flair for the original, "The bargain basement has moved upstairs." At an infamous health food shop, "Sorry closed again due to illness." At a bizarre barber’s, "We are not doing any dying unless you bring your own ingedients." At a leading English style restaurant, "Our tongue sandwiches speak for themselves." At a popular pawnbroker’s, "This guitar is for sale cheap and no strings attached."

Electric bills
Recurring complaints from farang owners and renters of property especially in Suksabai Villas, Jomtien Nivate and The Village in South Road. They say their electricity is being cut off even though no monthly bill has been delivered. Given that you can be without power for up to twenty four hours after journeying to the Naklua office with your cash, the best bet may to pay by direct debit from your bank. As long as it is on the regional electricity authority’s list.

On the floor
Translation of adverts in a Thai newspaper. "Very fit men needed to assist in laying carpets in booming business. Must be able to cover the entire Chonburi province." Another one reads, "Several second hand refrigerators for sale 1000 baht. Will keep everything very cold if you can repair the broken motor."

Super highways
Overheard in The Cat Bar. 1st farang: "They say that when the new roads in Pattaya are finished, they’ll be good enough for a capital city." 2nd farang: "That’s right, Phnom Penh or Vientiane most likely."

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Dear Hillary,

My boyfriend of four years went to work in Thailand. Three weeks before I followed, he met a girl and is now going to marry her. I’m devastated! He didn’t even tell me to my face - he told a friend to pick me up at the airport and tell me about it. I am staying at a hotel now and he refuses to talk to me or see me. This is the second horrible relationship I’ve had and I’m beginning to lose hope. What am I doing wrong?

Devastated

Dear Devastated,

You did absolutely nothing to deserve this pain. You just did what countless others have done before and will go on doing forever: you picked the wrong guy. Once or even twice does not a lifetime habit make. Problem number one is getting over this mistake. Problem number two is trying not to let it happen again. First things first: go home immediately! Destroy any pictures or letters that bring him to mind; throw out or give away any tapes or CDs you listened to together; tape a big "NO" on the telephone, fax and computer in case you are even tempted to contact him. Feel sorry for the girl stuck with a coward who uses a friend for intimate confrontation. As for not letting yourself ever get stuck with a jerk like this again, the trick is to think about what you want to change - not in the kind of man you attract, but in yourself. Send out different bait and you hook a different fish. Self-confidence is the best lure for a woman who wants a man to treat her well. Start doing what will make you feel more confident about yourself in other areas and you increase your chances of happiness in love. It can be anything from changing your hair color to skydiving to looking for a better job to learning a foreign language. Getting over him won’t be easy. But, as always with important life undertakings, the harder it is to do in the beginning, the more successful it will be in the end. This sorry excuse for a boyfriend didn’t devastate your world, he just shook it up. Now it’s up to you to put it back together again in a new and improved version.

Dear Hillary,

I never would have believed it if I hadn’t seen it with my very own eyes. I think my husband is a cross dresser. I found women’s tops hidden in the house, and whenever I look in his bag of supplies for his business trips to Bangkok, I find ladies’ underwear, the most recent being a two-piece underwear set. I don’t know whether he uses the items to get sexually excited or if his stash of women’s clothes means that he’s bisexual. I don’t know how to approach him with these questions, mostly because I’m afraid of what his answer will be. What should I do?

Shocked

Dear Shocked,

First things first: cross-dressers, or transvestites, are not necessarily homosexual or bisexual. Quite a few men are turned on by the silky sexiness of women’s clothes next to their skin. And not only are a great number of transvestites heterosexual males, many are fine husbands and fathers. Some women who find out about their men’s fondness for female dress not only tolerate it, but actually turn their partners’ proclivities into a togetherness activity, by helping their guys out with shopping and makeup. I’m not saying that is what you should do - I’m not even saying that I could do it if I were in your shoes. You need to do what’s right for you. Before you decide what that is, get the facts. Is he in fact a transvestite? Or is he a guy who gets a sexual thrill out of simply handling women’s clothes? Or does he have a girlfriend in Bangkok, whom he brings those underwear? It’s even possible that there’s a genuinely non-sexual explanation for what you found. When you are ready inside yourself to hear the truth, ask him, without judgment and with concern for him as well as for yourself. Difficult though it will be to ask, there is no other way to find out, and your marriage will be more honest with your husband’s true desires out in the open.

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  Modern Medicine: Getting Older

Presented by Bangkok-Pattaya Hospital

by Dr. Iain Corness

I am staring at the date on the calendar. Another birthday looms imminent, but is it the cause for celebration? Or do birthdays become physical reminders of the inexorable aging process? They say the two absolutes in life are death and taxes. Forget the taxes, every day is another 24 hours you will never get again and another day closer to your eventual demise.

When you are as old as I am (with the family history of my tribe), every day is a bonus, so you do dwell on the results of getting older. Just what should we expect? And even more importantly, just what should we accept?

Let’s begin with medical advice that you shouldn’t accept, and which you will hear too frequently after you turn the magic 50. "There’s not much we can do about that knee/ankle/elbow/hip (delete those not applicable). It’s because of your age." Never believe any doctor who tells you that the trouble you have in one joint (and not in the other) is because you are getting older. Politely tell this medico that your other joint is just as old as the troublesome one and as it is OK, it is obviously nothing to do with being older. Then get up, leave the surgery and don’t pay the bill!

I fully realize that those are "fighting words", but older people should not be fobbed off by young medico’s who haven’t been around long enough to understand the vagaries of getting older!

So what does happen with the "natural" aging process? Well, for one, the elastic tissues of the body slowly harden and lose their elasticity. This type of tissue is found in ligaments and in the skin. This is why you "creak" when you stand up and the joints move more slowly. This lack of elasticity in the skin also gives us those delightful furrows known by such dismal titles as "worry lines", "marionette lines", "crows feet" or just good old wrinkles!

Part of the "normal" wear and tear is a gradual wearing down of the smooth articulating surfaces of the joints. This can eventually produce the condition known as osteoarthritis in the weight bearing joints. Now you can see that this will affect the joints on both sides - not just one side.

You will also find that your stamina is not as good as it was. The ability to party on for all night is reduced, and it takes you a lot longer to get over an all-night bender!

However, there is very little that the older generation cannot do. If you want to try something and your general health is good - then go ahead and try it! Age is not a barrier to having fun. Go on, do it!

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  Family Money : Seeds in the packet never grow

By Leslie Wright

Some people who have been contemplating starting some sort of savings plan may have been put off by the recent uncertainty in stock markets around the world.

They argue that it’s better to wait until it’s clear that the markets have recovered and are going up nicely before venturing into risky investments like stocks and shares and things which they don’t really understand too well... After all, you can lose money on the stock market, can’t you? Better leave it in the bank for the meantime where it’s nice and safe and earning interest...

The fact that local bank deposit interest rates are now lower than the current inflation rate - so in real terms their money is depreciating every day - doesn’t seem to have occurred to them... if they can follow this counter-argument from B to C.

Central banks in developed nations are lowering interest rates precisely to stimulate their stock markets, which have had a bumpy ride of late.

We are already seeing positive sentiment returning to selected markets, which are now viewed by many analysts as good buying opportunities.

As to whether you should wait to start your savings program until the markets have sorted themselves out and are halfway up the cycle again, well, if you’re planning to put something aside regularly and invest it for any period longer than a couple of years, it really won’t matter too much what the market’s doing right now, will it? Because between now and the end of your savings plan you’ll have averaged out your unit buying price, as I explained in detail a couple of weeks ago.

Indeed, you may find a few years hence that the price now was the lowest you paid for your units, and wished you’d bought more of them while you had the chance!

Charges

Some people don’t start up a savings plan because they believe that these plans always carry heavy charges, which they are fundamentally averse to.

While it is true that many plans on the market do incur charges which at first sight may seem onerous, either at the start or if you stop them early, this is by no means always the case.

Of course you might argue that keeping your money in the bank you don’t suffer any charges or penalties for getting your money out.

Oh really? If you withdraw your money from a term deposit before its maturity date, you typically lose all the interest. That’s not a penalty for early withdrawal?

And having instant access to your money through a passbook or ATM card means your money is earning something like 4%-5% less than if it were on time deposit. That’s not a penalty for having accessibility?

And the difference between the minimum lending rate and the best deposit rate is still around 6-7%. That’s not a charge levied on your money?

The banks may not be so open as some other financial institutions in declaring what their charges are, but rest assured you are paying them, one way or another.

Any financial institution - be it a bank, a mutual fund company or a unit-linked insurance company - is a business which expects to make a profit.

It incurs costs in administering and managing your money, which it has to recoup.

In a highly competitive industry such as international financial services, the institutions concerned have worked out very carefully what they need to get back, and how much they can forego to remain competitive.

This is reflected in the differing charging structures of the wide variety of investment plans available nowadays.

There are short-term plans with no fixed term and no penalty for taking your money out whenever you wish.

There are medium-term plans with a high degree of flexibility and "loyalty" bonuses for longer term investors.

There are a variety of longer-term plans, with various charging structures designed to suit every type of savings investor. Your financial advisor will be able to help you select the ones most appropriate for your particular needs and circumstances.

Some plans do indeed have quite hefty penalties for discontinuing them in the early stages; but offset these by granting a very high degree of flexibility down the road. These are ideal for someone who wants to build capital over the longer term and believes he’ll be able to continue the plan through to maturity, but prefers to leave his options open, "just in case."

Other plans spread the charges throughout their whole term, and are ideal for someone who feels able to make a long-term commitment to regular contributions. Most of these plans are still highly flexible.

Certain other plans have more rigid structures, but these are imposed to comply with regulations which would enable the capital to be drawn down in their home country at maturity with either a reduced or zero tax liability. Rigidity equals tax efficiency.

It’s always a trade off.

The more flexibility you require, the more it might cost you. The more accessibility you require to your money, the higher the charges or lower the bonuses.

It really boils down to horses for courses, and cost-effectiveness.

At the end of the day, it is not so important whether you’re paying charges at the beginning, middle or end of a plan; what is important is whether it is a suitable plan for your particular needs and circumstances, and whether it’s cost-effective.

Let me give you an example.

A plan which pays for itself

An investor contributes $500 a month into a typical 12-year offshore savings plan.

Over the full term, he will have saved $72,000 into this plan.

At the industry "standard" compound growth rate of 10% p.a. (a reasonable and provable figure for US$ growth over the term in question), it is reasonable to expect this plan to be worth about $125,000 at maturity.

Now our investor wants to draw down a regular income stream. He decides to draw down just the growth each year, leaving the capital intact.

At 10% compounded growth p.a., he can reasonably expect to draw down about $12,500 a year on average.

In the next six years he will have drawn out $75,000 - $3,000 more than his total contributions into the plan, and he has generated ‘new’ capital of $125,000 which remains untouched.

He’s already taken out all that he put in, and has $125,000 more capital than when he started. Quite simply, the plan has paid for itself.

How relevant now are the charges?

Far away future

Some people still in the flower of youth may put off starting a retirement funding plan with the excuse that they don’t know where they’ll be or what their income will be in a few years time - and anyway, retirement is still too far into the future to worry about now.

This is a fatuous argument.

It might surprise some readers to know that in my younger days I myself was guilty of this blinkered attitude, and naïvely imagined that I’d be able to make enough capital from my early business ventures not to have to worry about retirement planning.

Getting divorced in California brought that train of thinking to a painful and abrupt halt, and made me realise I’d better do something sensible to protect my future!

(Perhaps learning my lesson the hard way is one reason I feel so strongly about this particular topic now, because over the years I’ve met too many people who’ve fallen into the same trap of complacency. Just like the family physician, an important part of my job is preventing, not just curing, the problem.)

Developed nations are already admitting either openly or indirectly through proposed changes in legislation (such as raising the retirement age to 70 in the U.K. and introducing a means test in Australia, as indeed already exists in New Zealand) that they will have insufficient funding to provide a state pension to the generations now under the age of 45.

This means quite simply that if you haven’t made independent arrangements for your retirement years (which are likely to be longer than your grandparents’), those years won’t be very comfortable - and you won’t be able to rely on the state systems, even if you qualify.

It is true that some people are shocked and put off by the amounts of capital that realistically may be needed to provide for continuing their present lifestyles for perhaps 20 years or more after their salaries stop.

But behaving like an ostrich does not make the blow less painful when it comes.

On the contrary, without a financial cushion around you, you will feel the pain even more.

Just as a conscientious physician will carry out appropriate tests and tell you if these prove you have malignant stomach cancer rather than leaving you in a false sense of security with some mumbled platitudes about indigestion and some sugar-coated placebos, a financial advisor with professional integrity will tell you the painful truth of how much you need to save in order to achieve your financial goals and ambitions, having once established these with you.

Yes, you may get a nasty shock. You may indeed not be able to afford to save that much - just as if you’re diagnosed with cancer you may not be able to afford the required amounts of radiation & chemotherapy if you don’t have medical insurance (or maybe even if you have, depending on your coverage.)

The choices may indeed be painful.

But now you know the target, you know what it will take to achieve it, and your financial advisor will be able to help you work out an affordable way to get started relatively painlessly.

Just the same as pains in your tummy may be only gas, or may be symptoms of a variety of ailments far worse.

You can ignore them and hope they go away. But if they don’t (and old age certainly won’t), you’d better do something about it before it’s too late and you have no options left.

Putting off starting something because you’ve still got plenty of time before you need to worry about it will cost you more dearly later, one way or another.

Better to start something - even if it’s way below what you’ve been advised or already know you need to be putting aside regularly - than waiting until you can afford the full amount that may be required.

Because that day will probably never come.

Each month, each year you delay getting something going will raise the amount you will need to put aside to reach that same target.

And this means either you won’t reach your goal, or you will be inclined to take on undue risk in the hope of getting there by a shortcut.

Reaching that target will become more and more unlikely, and the attempt more and more painful as time passes.

It’s never too early to start saving. Even modestly. And let me assure you, time does race past faster each year!

If you have any comments or queries on this article, or about other topics concerning investment matters, write to Leslie Wright, c/o Family Money, Pattaya Mail, or fax him directly on (038) 232522 or e-mail him at [email protected]. Further details and back articles can be accessed on his firm’s website on www.westminsterthailand.com.

Leslie Wright is Managing Director of Westminster Portfolio Services (Thailand) Ltd., a firm of independent financial advisors providing advice to expatriate residents of the Eastern Seaboard on personal financial planning and international investments.

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