Add some Interest to your Guaranteed Funds (part 2)

“When you retire it won't matter how much you've earned during your working life, all that will matter is how much you've saved”.
This punch line came to mind last week when I received a Royal Skandia final statement for a client whose 10 year savings plan had matured.
Later while walking around Hua Hin and observing young and middle-aged farangs I wondered how many of them had a regular savings habit and how many just squandered their earnings as they came. Younger people think old-age is another world. Anyone approaching 60 will tell you differently.
Fewer and fewer people have lifetime jobs where pension contributions are mandatory. At retirement many of them can afford the pleasures life has to offer, at least one overseas trip every year; help the grandchildren buy their first car, first computer, first house; first whatever.
If they saved regularly in addition to their pension the likelihood is that money problems are of no concern.
Let me ask you how many people you know who have no regular savings and just get by on state pensions from their country of origin? Look at the furore recently when immigration announced modest minimum income (by western standards) requirement for foreigners wishing to live in Thailand.
If these people making the noise had been forced to make pension contributions while working, then their golden years would not be impoverished ones. I am not being self righteous just stating the factual situation for some ex-pats.
And do you really think the people today who have a chance to make a difference to their own future and who are not forced to have some retirement arrangement will suddenly get enthusiastic about providing for themselves? Some will, but a large swathe of people will not, they will make many excuses. Can't afford right now, I'm leaving the country next year. I'll sell my business when I retire. They really fail to see that the only person that can look after the old person that they will one day be is the young person that they are now.
Mind you ex-pats have not been helped too much by offshore pension providers. The charging structure in many cases has been so high that charges have outweighed the benefits of tax free growth. I have to say I was lucky with my Royal Skandia client. Starting in 1994 in Bangkok, he paid in US$280 per month for ten years (Total US$33,500 in total) and received back US$51,508. As one of his many investments he can now enjoy the benefits back in Belgium where he has retired.
When people came to me then and asked for regular premium products (a rare occurrence) I pointed out the pitfalls but I have never actively solicited regular premium business. The reasons I have already stated. Not good value for clients and too high charges.
Now however that has all changed Royal Skandia have moved the goalposts and their regular premium business is, until the end of June, the best low charge deal that has ever been offered to offshore clients.
I could explain all the technical reasons why I can recommend, for the first time, a regular savings product, but it is difficult to explain clearly in an article like this; an example works best.
Let's look at an example based on a contribution of US$500 per month for 15 years with a growth rate of 9%.
The standard return would be US$160,000. The special offer return US$170,000.
That's an extra 10,000 dollars which was formerly eaten up by mostly charges.
For those without a pension provision it's time to take responsibility and forget the excuses. This is an opportunity to change your future from penury to financial stability Like all things in life the choice is yours. Don't get to be a pensioner in Hua Hin blaming Mr Thaksin for everything, complaining about new immigration requirements and begrudging a 5 baht tip to a waitress.