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Phuket Business: Save yourself

Legacy Phuket Gazette

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Phuket Business: Save yourself | The Thaiger

PHUKET: I am personally a very big fan of Napoleon Hill, and I have just finished re-reading his original work The Law of Success in Sixteen Lessons.

Each lesson is based on a quality or aspect which was a common denominator amongst all of the various successful men he had studied over a thirty year period, such as Henry Ford and Andrew Carnegie. One of these sixteen lessons is centered on the habit of saving money. It states that developing this habit was one of the essential tasks all who would be successful must do.

Most important is not so much the amount that is saved in the beginning when you are trying to instill this into your character, but simply that you begin somewhere and repeat the process until a habit is formed. The habit, once formed, can be maintained and increased much easier than it would be to begin with too large of a commitment and cause a reversion to the “spend it all” kind of lifestyle. In fact many people on the planet have become more and more Americanized in the sense that they spend not only what they earn, but in excess of it.

Debt can be one of the most crippling situations to find yourself in and the best defense against this happening is to develop the habit of always saving something from every paycheck. It doesn’t matter if you are suddenly faced with a major decrease in earning potential, because you can alter your lifestyle and simply save less, but as long as you are always spending less than you are earning you will eventually get to a point where you achieve financial freedom. It is impossible to achieve it any other way, because even if you greatly increase your earnings, your habit of spending more will just force you into an even more expensive way of living which eats away at any extra income. This is why often people who win the lottery find themselves poor again in a very short period of time.

Many of those who become very wealthy do so simply by using the savings habit, and as their unused money begins to compound, earned money earns even more money. This can eventually create an exponential increase in the size of the overall “pot”. This is a very big part of why the rich get richer and the poor get poorer; many of the rich have learned and understand how to practically use this fundamental “law” as Hill would call it. Others do not and therefore continue the cycle of spending all or even more than what they earn, and they never experience the freedom which wealth can provide.

The best way to ensure a happy retirement in Phuket is to ensure there is more than enough capital put away to continue to live off of, less than what a very conservative investment can earn you. This way it matters not how long you live and you will never have to experience a declining standard of living as your means begin to deteriorate as your capital is eaten into. The best way to reach this point at the earliest stage in life is to start saving earlier rather than later. Money has less work to do when it has a much longer time frame to achieve your goals.

David Mayes MBA lives in Phuket and provides wealth management services to expatriates around the world, specializing in UK pension transfers. He can be reached at david.m@faramond.com or 085-335 8573.

— David Mayes

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Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

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Business

500 people own 36% of equity in Thai companies

Greeley Pulitzer

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500 people own 36% of equity in Thai companies | The Thaiger

Roughly 36% of Thailand’s corporate equity is held by just 500 people, highlighting wealth inequality in the Kingdom, according to a study released by the Bank of Thailand’s research institute.

Each of these 500 amass some 3.1 billion baht (102 million USD) per year in company profits, according to the report from the Puey Ungphakorn Institute for Economic Research. In contrast, average yearly household income in Thailand is around 10,000 USD.

A report out this week from the Economic and Business Research Centre for Reform at Thailand’s Rangsit University also pointed to divisive and polarised politics being another root cause of the economic divide.

Thailand’s private sector is dominated by tycoons running sprawling conglomerates. According to the World Bank, the gap between the mega-wealthy and the rest of the Thai population of 69 million is among the many economic challenges for Thailand. According to Bloomberg, the perception of a divide, exacerbated by an economic slowdown, is a major political fault line.

“Magnates arise in Thailand from institutional factors that privilege certain businesses,” said the executive director of PIER, author of the study.

The institute said Thailand needs to promote competitiveness to reduce profits from monopoly power and bolster entrepreneurship to create a more equitable distribution of corporate wealth.

The research is based on analysis of 2017 Commerce Ministry data on the 2.1 million shareholders in Thai firms, and was funded by the University of California San Diego.

SOURCE: Bangkok Post

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Business

Fish sauce excluded from Thailand’s proposed tax on salty foods

May Taylor

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Fish sauce excluded from Thailand’s proposed tax on salty foods | The Thaiger

PHOTO: Cook’s Illustrated

Thailand’s Excise Department and Public Health Ministry is considering a levy on salty foods in an attempt to tackle the sodium-rich diets of Thai citizens, and the health consequences.

The director general of the Excise Department, Patchara Anuntasilpa says the tax would be calculated based on the amount of salt in a product, with the proposal being sent to Finance Minister Uttama Savanayana by year end.

Fish sauce is a liquid condiment made from fish or krill that have been coated in salt and fermented for up to two years.[1][2]:234 It is used as a staple seasoning in East Asian cuisine and Southeast Asian cuisine, particularly south east Asia and Taiwan. Following widespread recognition of its ability to impart a savoury umami flavor to dishes, it has been embraced globally by chefs and home cooks.

“If the tax is approved, we will allow entrepreneurs one or two years to reduce the salt content and launch a less-salty version of their product.”

The World Health Organisation and the UN both recommend taxing foods with a high salt content, saying increased sodium intake leads to high blood pressure, cancer and kidney and heart disease.

The Nation reports however, that while the proposal is to levy the tax on frozen and canned foods, along with processed items such as instant noodles, seasoning such as fish sauce and snacks like potato chips would be excluded.

The Federation of Thai Industries has pledged to cooperate with the government’s effort to improve the health of Thailand’s citizens, but its head Wisit Limluecha says he is not in favour of taxing popular seasonings, snacks, frozen or instant foods.

“Research has found that these foods represent only 20% of what we eat each day, and everyone has different eating habits, so the better solution would be to advise consumers on how to eat healthily.”

Wisit warns that the tax may damage the country’s competitiveness in the food sector both overseas and in Thailand, where imported products are easily available. He also voices concern that small businesses will suffer if unable to afford ingredient and packaging changes.

SOURCE: The Nation

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Thai Airways must modify rehabilitation plan to survive: Airline President

The Thaiger & The Nation

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Thai Airways must modify rehabilitation plan to survive: Airline President | The Thaiger

PHOTO: gta5-mods.com

“Thai Airways will have to modify its rehabilitation plans to survive in the face of tight competition.” This frank admission by the airline’s president Sumet Damrongchaith.

The national carrier is now carrying a total debt of over 2.45 billion baht and losses of more than 20 billion, despite being able to reduce its debts by 48 billion baht over the past five years.

Sumet says the first step will be to restructure the airline’s management and finances as well as reconsider its plan to spend 1.5 billion baht on 38 new aircraft. He admits the biggest problem is that Thai Airways has low capital but a high debt-to-equity ratio of eight times.

In order to maintain its competitiveness, the carrier will have to reduce its debts versus assets and boost its working capital with support from the ministries of Transport and Finance. Hence, it plans to borrow approximately 3.2 billion baht in fiscal 2020 in line with the budget limit set by the Office of Public Debt Management.

This loan will be taken to support the airline’s investments as well as for its working capital, to update equipment and maintain existing aircraft, but will not be used to repay old debts.

The Nation also reports that the airline is also concerned about maintaining its liquidity because at the end of June this year, its revolving credit line stood at 13.4% of the total revenue forecast for 2019.

Sumet admits that, though the original rehabilitation plan has a set framework, the situation has now changed due to the appreciation of the baht, so in order to achieve goals, the work method has to be redesigned, such as finding a way to procure more passengers.

“We are now in the process of analysing new markets.”

Meanwhile, Thai Aiways’ board chairman Aek-Niti Nitithan-Praphas says the board is reconsidering plans to procure a new fleet taking into consideration the state of the global and domestic economies as well as the US-China trade war.

“The growth of the tourism industry and the airlines’ financial status needs to be reviewed in line with strong competition and routes that are no longer popular. It’s better to carefully revise the plan instead of exposing the airline to greater risk. The target should be reduce expenses by 20%.”

Meanwhile, Thai Airways aims to boost the sale of tickets, find ways of increasing online shopping of duty-free goods and reducing unnecessary expenses by 10%without affecting the quality of service in the last three months of 2019.

The airline is also negotiating the option of cutting down overtime expenses and is looking into curbing losses incurred by it’s semi-budget offshoot Thai Smile by increasing its flying hours to 10.5 hours daily. These steps are expected to help the airline reach breakeven point in the short term.

The airline is also considering long-term goals such roping in more passengers by offering greater benefits to Royal Orchid Plus members, focusing on digital marketing, retiring non-performing assets as well as increasing revenue from related businesses such as kitchens and aircraft repair centres.

SOURCE: The Nation

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