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Finance: Impact of gap years on your finances

Legacy Phuket Gazette

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Finance: Impact of gap years on your finances | The Thaiger

PHUKET: As the Phuket Gazette‘s managing editor is imminently departing on his possibly crazy adventure to wherever the dice will take him, I thought it might be a good time to discuss gap years and how they tie in to your long-term financial well-being.

There are two main types of gap years. The first is either before, or immediately following a university degree, and the other is mid-career and typically known as a sabbatical.

Gap years during university studies are very common in Europe, but not so much in America. In fact, even though I did take gap years myself, travelling around the United States and living out of campsites and a converted van, it is not something that is encouraged. Typically, the fast-paced American culture views time off for traveling simply as a waste of time. I obviously disagree, for reasons I will list later on.

Taking a sabbatical mid-career is a little trickier from a financial perspective if you already have many fixed overhead costs in life. Obviously most of these tend to arrive with marriage and children, but taking a gap year and bringing the family along is something I intend to do myself in the future. I consider it one of the best investments in my children’s education that I will make. So how do these gap years fit into life planning and affect our overall financial trajectory in life?

From a purely mathematical perspective, it would appear on the surface that a gap year is usually a total financial loss. Very rarely does anyone work above and beyond what is needed to finance the trip, if they even work at all. Many live off of savings during this period. So there’s not only opportunity costs associated with losing your income during the period, there is also often a chunk of savings wiped out in the process. The benefits mathematically are very difficult to quantify, so it appears on the surface to be a loser.

However, the benefits often come over the long term. For myself, a benefit of travelling the US during university made me more mature and ready to settle down when I got back into studying. This allowed me to graduate at the top of my class. I also developed a love of travel and a desire to explore, which led to me taking some of my most successful risks in life.

My second gap year came when I was burning out from trading. Initially I intended to spend a year in Thailand, teaching mainly to get a visa and earn pocket change, before going to do my MBA and switch into a different side of business back in the US. Well, that was eleven years ago.

I did leave for my MBA after a year, but I came straight back here and never left Thailand again.

My entire life here, with a wife and children, is the result of a gap year. How can you put a price tag on your entire life working out beyond your dreams?

It may be that my experience leaves me slightly biased about the value of gap years, but anybody will gain from meeting new people, experiencing new cultures, overcoming adversities, reflecting on life and making personal changes. In the long run I don’t think anyone has ever regretted a gap year unless they experienced some kind of crisis. Financially speaking, I have never come across anybody who said “If only I hadn’t taken that gap year, my retirement would be so much better”.

David Mayes MBA resides in Phuket and provides wealth management services to expatriates around the globe, focusing on UK pension transfers. He can be reached at [email protected] or 085-335 8573. Faramond UK is regulated by the FCA and provides advice on pensions and taxation.

— David Mayes



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Business

Company rolls out new computers for Chiang Mai school

Kritsada Mueanhawong

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Company rolls out new computers for Chiang Mai school | The Thaiger

Top executives from Thailand property development company Boutique Corporation recently visited the Intanon Wittaya School in Chiang Mai and presented them with ten desktop computers to the school.

Inthanon Wittaya School is located in Amphur Mae Jam, 111.2 kilometers from Chiang Mai, with 192 kindergarten and primary school students. The school offers a computer class but only had 11 computers available in the classroom before the donation.

Some of the students plan to participate in a computer competition, for which they had an inadequate number of computers with which to practice and prepare. Hearing of this, Boutique Corporation PCL chose Inthanon Wittaya School for its 2018 corporate social responsibility activity.

Mr. Chatchawan Wisetkhoon, the director of Intanon Wittaya School, said, “We thank Boutique Corporation for donating these computers. Inthanon Wittaya School is very grateful. Through teaching and learning activities, our school will use the computers for the maximum benefit of our students.”

The presentation was made by Prabsharan Thakral, President and Group CEO; Ekanut Ungphakorn, Chief Operating Officer; Nattaya Huatsoontorn, Chief Financial Controller; and Pornpimol Chaichanakajorn, Senior Vice President – HR Business Partner.

President and Group CEO Prabsharan Thakral commented, “Boutique Corporation PCL appreciates this opportunity to support Thailand students. It is essential for them to develop computer skills in preparation for almost any future profession. We’re pleased we can help further their education.”

This is the first donation Boutique Corporation has made to Inthanon Wittaya School. Last year, Boutique made donations to causes including “To Be Number One Under Princess Ubolratana”; the Charity Shield Golf Cup, arranged by the Fund for Empowerment of Persons with Disabilities; The Department of the Interior of Krathu District, Phuket Province, to plant marigold flowers for the Royal Ceremony; and the Bowling Charity by CRMC Royal Thai Air Force Alumni.

Boutique Corporation is a leading asset developer in Thailand. The group currently operates hospitality assets under the brands Citadines, Oakwood, and its self-managed brand Journeyhub. The group is expanding its hospitality development platform across Thailand; in particular, in Pattaya, Phuket, and Chiang Mai; where Novotel Chiang Mai Nimman Journeyhub is already confirmed.

Company rolls out new computers for Chiang Mai school | News by The Thaiger

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Business

Burn baby burn – The Netflix cash strategy to stay on top

Kritsada Mueanhawong

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Burn baby burn – The Netflix cash strategy to stay on top | The Thaiger

Netflix, the online TV streaming service, is gaining more viewers in the US and around the world, but is burning through astonishing amounts of cash in producing new content.

In 2018 Netflix churned through $3 billion in losses. Negative cash flow that accelerated to $1.3 billion in Q4, more than double the year before.

But it’s all a part of a plan according to Netflix. They claim they expect to burn through another $3 billion this year as well. This year’s plan is to make more original content, do more marketing, particularly outside the US and add even more subscribers.

On the plus side, Netflix continues to rapidly add new subscribers to its streaming platform and revenue continues to climb sharply.

Their intention is to keep the accelerator pedal down with spending and adding new subscribers to make it increasingly difficult for new streaming businesses to to get traction and reach critical market mass.

But CNN business reports that the business model can’t last forever.

Statista.com says, according to their calculations, Netflix will have more than 546 thousand subscribers in Thailand by 2020.

Neil Begley, Moody’s senior vice president says “It’s not sustainable.”

“Strategically, Netflix is doing all the right things. But they’ve layered over that a level of financial risk that would make a lot of people uncomfortable.”

Burn baby burn - The Netflix cash strategy to stay on top | News by The Thaiger
GRAPH: CNN International
Despite the accelerated spending spree, investors seem unfazed. Netflix shares dropped 3% on Thursday’s stock market but this is just a blip in their 26% rise in the first half month’s trading of 2019.

But Netflix says they’re addressing the income side of the business as well with a rise in subscription charges for its US subscribers.

The streaming service added a 8.8 million new paid subscribers in Q4, 2018, even topping their own forecasts. Netflix now has 139 million paying members, up from 110 million at the start of 2018.

This equates to around 10% of total US screen time, a massive and growing slice of total eyeballs, cutting into the revenues of broadcast and cable services. And they’re growing their business without any advertising revenue.

Netflix say that they will slow the cash-burn down after 2019 and expects to fund more of its production from rising subscriber income in the future. Moody’s agrees and Begley expects Netflix to break even on cash flows by about 2023.
Read more about the Netflix ‘grand plan’ in the CNN report HERE.

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Business

BOI approves new rail services, new port investment

Kritsada Mueanhawong

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BOI approves new rail services, new port investment | The Thaiger

PHOTO: Duangjai Asawachintachit, BOI secretary general

The Board of Investment of Thailand (BOI) has laid out strategies to boost the development of rail services and the country’s cruise tourism.

Duangjai Asawachintachit, BOI secretary general, says the latest BOI meeting chaired by the Prime Minister had resolved to instigate measures to attract investment in rail development and related infrastructure for continued economic growth.

According to Duangjai, investment projects for rail development and related sectors will be entitled to a tax break of 50% for the first three to five years of investment.

The BOI also approved measures to stimulate the cruise tourism business, with the aim of attracting more tourists to the kingdom.

Moreover, the BOI has introduced a plan to attract aerospace investment to U-Tapao Airport in 2019 as part of the Eastern Economic Corridor (EEC) project, as the EEC Office is planning to develop an “Aerotropolis” which will stretch over 30 kilometers from the airport.

Additionally, the meeting endorsed the 7-year strategic investment promotion plan, spanning 2015 to 2021, which it is anticipated will contribute 418 billion baht to the country’s GDP.

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