Planning for the last job – ever

Following up on my new years’ plans, I am now finalizing negotiations with my next employer. As my current work contract will expire by the end of April, I focused the last 2 months on trying to secure a new contract. Today, I succeeded.

While I couldn’t hit my self-imposed targets completely, the new job will bring some significant improvements and benefits to my career and to my private life. I will be in charge of a new hotel opening as a General Manager, with the expectation to grow into an Area General Manager role and in charge of a few more hotels within the contract duration of 2 years. By 2021, and if everything goes well, I might very well be in charge of up to 5 hotels across Thailand, and by 2023 there might be even a few more doors opening.

At the same time, I have also reached out to some of my colleagues from The Motley Fool in Singapore and Hong Kong. While I sure am getting busier, following up on my work with The Motley Fool Germany to analyze markets and stocks from the German, Swiss and Austrian area, I might soon start to also write about the stock market in Thailand. Yes, I am a workaholic.

All these efforts have one main goal in common: FIRE. Financial Independence Retire Early. This is the real reason why I am putting so much on my plate.

What makes this new job so exciting is that I am actually planning this to be my last job. My new contract will be for 2 years. It might get extended later on, and I actually have some further ideas and possible plans to continue of even up to 6 years with possible promotions along the way.

But it will be (hopefully) the last company and job that I will work for full-time. Whether it will be only 2 years as per the initial contract or even grow into 4 years or more. This will be my last full-time job and the last company I applied for a job with.

Working on full-blast for even just 2 more years and keeping up my high saving rate of over 40 %, will enable me to continue building up my passive income from stocks – to a level that my passive income will be able to cover all my regular daily expenses while still keeping on growing. I have calculated it 10 times through and the result is the same. Unless anything very unexpected happens, this next 2 years will be indeed enough to reach my target.

Light at the end of the tunnel

What this really means is that I am not just planning my next career move. I am planning for FIRE to kick in and to reach financial independence. I will be 41 years old by that time. What is even more staggering to me is that I only started to really put that much effort into the whole thing when I started my hotel career at the age of 29. This means that I will have reached my goal after only 12 years of truly hard work. I wish someone would have taught me some lessons about FIRE at school, then I might have reached FIRE probably around 10 years earlier on.

All the struggles, all the pushing myself to learn more, to work over-time and to trying to impress my supervisors, business partners, colleagues, all the hard work… will finally pay off…

Obviously, being a workaholic I don’t have any intention of truly calling it a day by then. My plan is then to turn my side-gig with The Motley Fool into a little more intensive exercise. I also think about going back to Germany for a short time, to certify myself as a financial advisor and to open up a small career and financial coaching business here in Thailand.

A million ideas, let’s see which one of them will become real in the end. The main point for me about FIRE is not to stop working in general, but about to be able doing things on my own terms.

There is a quote that money is power. It is. For me, it’s the power to regain control over your life, to reduce your dependency on others and to experience a form of freedom that most people in the world struggle their whole life for to find. I am now only 2 years away from it. 24 months. 104 weeks. I am really excited about it.

Everyone is a nobody to somebody

I don’t really remember where I read this quote, but it’s so accurate and so much matching my way of thinking, that I really felt like needing to write about it. Everyone is a nobody to somebody. Why do I consider this important for this blog?

The truth is that nobody cares about who you are…

The rise of social media is, in my opinion, a strong sign that people really feel… well, the right word may be “insignificant”. They might be not fully aware of this, but deep down most of us must know how unimportant we actually are as an individual person. And we are trying to compensate this through social media.

By connecting with thousands of people and bombarding them daily with posts and pictures of what we do, what we eat, where we go and how amazing our lives are, we are desperately trying to stand out from the crowd with the hope that actually anybody cares.

Every “like” we receive is a confirmation of the expected recognition, every comment makes us happy… but in fact, since everybody does that, it’s really meaningless. As long as you are only trying to convince others that you do stand out from the crowd, nobody really cares, no matter how many likes you get.

Don’t be sad or disappointed. There over 7 billion people on this planet, why would you think that you are special? Do you actually care about anyone else from your social media network to a degree that you would actually call this person occasionally? I mean like a real call, having a chat for half an hour? I bet the list of people who would match even only this one simple requirement is really short… it is, therefore, only logical that most of your connections think exactly the same.

… unless you have something that others want

Things change however if you have something that others want or need. Usually, this comes down to only three relevant things: Money, power or influence.

Everybody wants to have more money. Money can not only make your life easy and buy you stuff, but it also can give you access to a better and longer life, even more success (you need money to create more money), a privileged style of living, or simply the convenience of not having the same worries as millions of all other people who have neither money nor power. Money creates a feeling of greed and jealousy.

Power can be generated by money or create money in the process of being executed. It can be physical, intellectual, political or even lethal. Power puts you in control of others in the most direct way possible and is therefore mostly feared but also adored.

Influence can be generated by money and/or power, or it can work out vice versa, creating money and/or power in the process of executing your influence. It’s a sneaky and smart approach that is often being despised in its ways but adored in its results.

If you will be identified as a person with either money, power or influence, your life may change dramatically. But mark my words: Not necessarily for the better.

It’s good to be a nobody

Because once you have been identified, you will become something we call a “public person”. A politician, a billionaire, a movie star… you might be jealous of their glamorous lives, but if you really, reaaaaallly think about it, are you sure that you would want to be a public person?

Having money, power or influence is automatically putting a lot of responsibility on your shoulders. People want some part of it, and hold you responsible for all your achievements. If you become rich, people want to know how you became rich and you can also rest assured that they will judge you on it. Same goes for your power and influence. How you got it and how you use it, with who you share it – everything will become public and in many instances, somebody will want to have his or her cut of it. Whether it will be in the form of taxes, public pressure or even physical or mental enforcement. People will start coming after you.

That’s why when aiming for the riches, I personally would probably never reveal to anyone anything about my success. I will reduce or even completely seize my social media presence, and ensure to live a humble way of life without standing out from the crowd in a too obvious way.

From my point of view, escaping the rat race is about getting your time back for yourself. This just doesn’t happen if you become a public person. This is the reason why I intend to become a nobody once I reached the stage of calling it a day, quitting my job and start following my passions.

There is no real right or wrong here and everyone will have his or her own view on it, so I leave it to you to decide how you will prefer to handle this, once you reach your financial targets. Just make sure that you take a moment and really think about it.

Freelancing is the future – and so is investing

Many things have changed since I finished high school. Some for good. Some for bad. Some for… it’s hard to tell yet. For example, my parents used to tell me that if I wanted to be successful, I had to finish high school, then graduate, and if I really wanted to become the best I would have to go for a DR. title.

Well… that didn’t happen. I finished high school with mediocre grades. I started to study Chinese and East Asian Arts but dropped out after a few months. Then I went for a vocational education program in banking and after 2 years of suffering through it, I decided that a bank was too boring and went back to studies again. It turned out that I got real talent for the Korean language, and so I got a bachelors degree in Korean studies in record time and with excellent grades, but that was as far as my aspirations had taken me. Then I started to work in hotels in Asia… and I got stuck with it.

It was not a bad career. After 8 years of hard work, out of which 6 years were with a 6-days-work-week and shifts of 12 hours a day, I became a General Manager in a hotel at the still young age of 37. Now I am looking for my next assignment and there seems to be a glance of opportunity ahead to become an Area GM (in charge of several hotels) with a long-term prospect of even moving up to the rank of a Vice President at some point. Yes, I could do worse.

But I didn’t need a Dr. title for that. I didn’t need a masters degree. My bachelor degree did open some doors and it’s hard to tell if I would have gotten where I am without it, but I can frankly say that I am using hardly more than 5-10 % of what I learned during my studies for my job routine.

I also know that I am not alone with this experience.

It is no secret that most college students hardly use anything of what they learned during studies in their regular jobs. If you ask me, that is also not the point of visiting a university or college. The main point is rather to broaden our horizons and to bring some methodology into our brains to understand critical thinking, decision making, research and techniques to evaluate whatever problem we are confronted with. We learn how to handle ourselves and how to develop further knowledge. It is not really meant to prepare us for a specific job. Well. There are a few exceptions. For doctors or lawyers for example. But I think my observation is pretty accurate for many fields of studies out there. Not all, but many.

People adjust as work environments create new patterns

So basically we know by now that what our parents were telling us was a bunch of crap. It’s not their fault, they grew up in a different world. A world without the internet, a world where working conditions were miserable but still better than what the 1st and 2nd World War left over for them. They were willing to work 7-days a week to help rebuild their country and to make sure their family has food on the table when they came back home.

Millennials don’t know any of that. While the parents of my generation were worried about an electric outage for their house or condo, Gen Y and Z are worried about empty phone batteries.

With the ever-increasing demand for Fussball-tables, free coffees and bean bags in office, with the rise of social welfare benefits, 5-day-workweeks (or even less) and countless other ways how the lives of employees need to be improved, companies have found a new method to strike back. Freelancing. And people are embracing it in the masses.

Freedom – not more and not less

Whether it’s driving for Uber or doing a quick translation job on Fiverr or Upwork. Freelancers are now everywhere. Some do it as a side-gig. Others turn to do it full-time. There are countless jobs available online that can be taken on by anybody who got the right skills at the right time. Rather than a diploma, the only thing you really need to take off is references. The more jobs you get done, the stronger your profile gets and the easier the earning becomes.

You are free to choose your place of work (as long as there is some wi-fi around), you can negotiate your salary. Nobody cares who you actually are, as long as you can get the job done. It’s a great opportunity for anyone with a certain skill-set to get into the market and simply start working.

But freedom obviously has its price. There is no security. If you get sick, you got no income. If your equipment brakes, you have to get a new one on your own. Retirement? Nope. Medical insurance? Dental? Nope to that too. Vacations? Paid Holidays? Don’t even dream about it.

Freelancing is not as free as we want to believe. 

When you decide to become a freelancer, you need to bear this in mind. While with certain skills you are able to actually make a good living, you need to think about all those eventualities and how you can protect yourself in case of misfortune.

Also, believe it or not, even you might enjoy what you are doing as a freelancer at this very moment. But things can turn around and there is a high chance that you will start to hate your freelance job at some point. You will find out, that while you are free to set your terms, you are still not out of the rat race – because you still need to trade your time for money, to work relentlessly to ensure you can bring food to your table!

Protecting yourself through investments

Therefore, freelancers are actually even more exposed to financial dependence as they age compared with regular employees, and they should start investing very early on and learn all there is to learn about passive income.

Working for yourself on your own terms is a great and amazing opportunity. Make sure it doesn’t become a nightmare once you’re out of luck, when times turn tough, or simply when you get old – by building up streams of passive income. As my readers know well, investing in stocks is, in my opinion, a great way to do just that.

Trading stocks in Thailand

I decided a few months back to open a stock account for my wife. I am not a big fan of shared or joined accounts and prefer if everyone has his/her own fair share of independence. Therefore, while we keep our bank accounts separate, it only makes sense that she also has her own source of wealth and income for her future plans, ideas, and dreams – which may or may not align with mine. Another reason is also that it’s always better to have a 2nd income under another name within the family. Saving taxes and reducing complications.

Taxes

But speaking of taxes, Thailand is a great destination for investors. There is no capital gain tax in place, so any profits collected from stock trading are completely tax-free. That is if you are living in Thailand of course. On top of that, dividend payouts are taxed at very reasonable 10 %. Therefore, no matter whether you are a trader or a long-term investor, Thailand is an attractive place to invest.

Account

I opened a securities account with the Bangkok Bank. It’s a fairly simple process, all you need to do is to go to a branch, sign some documents, show your passport and after a few days you will receive a username, password and the instruction to install an APP on your phone called STREAMING. It’s actually not easy to find information about it online so you can get a peek at how it looks HERE. The app can access your securities account with the username and password details.

There are different types of accounts. The most simple one is cash-based, meaning that you can only buy stocks with the money you put on it. If you like to have an overdraft in place or plan to short stocks, it is possible but further documents such as a work permit in Thailand or another person to guarantee for you, and/or a security deposit might be required.

I opened the account with Bangkok Bank because my main salary account is also there. Banks in Thailand are quite modern and advanced and offer much smarter solutions compared with i.e. German banks. One such function is “bill payment” which can be used to pay electric bills, water, telephone etc. in an instant. Transferring money to the securities account is also being done via this function and once the account has been verified, money will be deposited within milliseconds.

Transaction costs are extremely low, you can see the commission rates HERE. Usually, your cost will be less than 0,5% even with a very low trading volume. The system to calculate the commission is a little bit complicated because it is based on volume not only per transaction, but on your actual total daily traded volume, but from my point of view its a waste of time to elaborate on it. The cost is so low that it’s completely negligible.

Last but not least, what you also might want to do is to declare your main bank account (which must be a Thai bank) as your payout account for dividends. The service is called e-dividend and will ensure that any dividend payment will be transferred immediately to your main account. 10% in taxes are being deducted without any further action required from your side, so there is also no hassle about this later with any authorities.

You will need to do a tax declaration by the end of the year where your dividends need to be listed, but doing taxes in Thailand is amazingly simple. You do it completely online and it’s literally one A4 page that contains all the information.

Stocks & Information

The first source for information about Thai stocks should be the SET website (Stock Exchange of Thailand). It’s pretty comprehensive and full of information about every single listed stock. I encourage you to explore this site in detail. It has a dividend calendar, detailed company information, daily news updates and more.

The 2nd source of information is the Streaming App. It has plenty of built-in evaluation tools, to quickly identify stocks according to your preferred investment strategy. Dividend Growth, Small Caps, Value Stocks… the integrated stock screener is extremely useful to quickly identify companies that are worth a second look.

Probably the only and biggest restriction is, that you can trade only Thai stocks and Thai ETFs. I would have loved to add some US stocks or REITs but that’s unfortunately not possible for now.

Dividends

There are plenty of successful, dividend-paying companies in Thailand and yields are great. My wife’s account will probably reach a yield of 4,5 % this year and dividend growth is also a thing here. Most companies pay dividends only once or twice a year. The main dividend season is around April / May and then later again around September / October. However, as an income investor, you can find companies that pay out a dividend on different months as well. My target is to create a monthly-income portfolio and I think I can have it up and running within a year.

…. and go!

This is almost everything you need to know to get started. Happy investing!

The dividend season is coming!

As the calendar has continued to roll into March, we are quickly approaching the dividend season in Germany. While most companies in the US pay out a dividend every 3 months, German companies do so only once a year. One could argue about which system is better or worse, but that’s a topic for another discussion.

In Germany…

The majority of companies in the largest German Stock Exchange Index (DAX) is paying out dividends from April to June. Right on time before summer vacation, to ensure that we get the necessary pocket money to go on holidays. Well, or if you are smarter, to re-invest it.

Traditionally over the last years, right before the announcements for upcoming dividends will happen, share prices start to rise as analysts evaluate and predict the expected payouts. And despite challenges across the globe, 2019 does look like a great year again. To understand the significance of this season, you need to take a look at some numbers. The expectation for 2019 alone for the DAX companies is a total payout of 35 Billion Euros!

35.000.000.000

That’s the number. Can you even imagine to have something like this on your account? Well, most people can’t and most people will never come even close to it, so this doesn’t really need to be your target. But receiving a piece of that pie is definitely worth the effort.

This is even truer if comparing dividend yields with traditional saving accounts. While it is currently quite easy to find companies which offer a yield on your investment of 3% or more, most saving accounts will be still below the 1% margin. It means that even with a modest 3% yield, you can receive 3 times the money that you would get if it’s parked on a traditional savings account. Just think about that. This the reason why investing simply makes sense.

In Thailand…

Interesting enough, Thailand has 2 major dividend seasons as most Thai companies pay dividends twice a year. The first season is similar to the German one, between April to June. The second one is around September and October.

I didn’t write much about the Thai stock market yet as I am still gathering experience, but I am setting up a stock account for my wife. As you might have guessed, I prefer stocks over life-insurance. Interestingly, Thai companies offer much higher dividend yields across the board and while some might think that investing here is risky, the truth is that the risk is pretty much controlled.

Due to the close relationship between politics and business, major companies are pretty well protected and with the country growing and moving forward, their profits are almost on autopilot. I will write more about this at a later point, but for now, I am getting ready for the dividend season here as well.

Re-investing is the key to long-term success

Receiving dividends at much higher yields compared with savings accounts is a beautiful thing. Even more so is the fact, that many dividend-paying companies tend to increase those dividends year over year. Re-invest those payouts, and you will create the 8th world-wonder: The magic of compound interest. Or compound-dividend. This is the one and only true key for long-term success, which any average person can achieve with very little effort.

Regular, growing dividends will enable you to escape the rate race much sooner. Or, if you prefer to keep working, offer you a nice supplement to your monthly paycheck or retirement payout. While many financial advisors will discuss with you about the 4% rule and about taking out money from your savings/retirement account when you get old, dividends offer you a much better option: Not taking out any money at all. If you are invested long enough, you can receive dividend-yields of 5-6% easily without selling even 1 stock, thus being able to enjoy a great lifestyle until your last breath.

This is no hocus-pocus. This is the power of investing.