Do the Math

June 25, 2010

I’ve been watching CNBC (the stock market pundits) for a long time now, hoping to find a way to get some kind of return on my retirement investments.  I do have U.S Social Security, which I became eligible for at age 62 and that is quite enough to live on in Thailand.  But having a little more income from investments might make things a bit less “living on the edge”.

Since most of us retirees are in the same boat, I thought I would look a little more closely at how our investments in the stock market have been doing.

I’m not that good at math but I think I have learned how to do the numbers.  And they aren’t pretty.  I am going to bet that the majority of people who have at least part of their retirement funds invested in the stock market don’t know the following fact.  For the last decade, from June 19, 2000 to June 19, 2010, the DOW is down 107 points.  That’s right.  On June 19, 2000 the DOW stood at 10,557.  As of June 19, 2010 the DOW was at 10,450.  Sounds pretty sad.  But if you do the numbers, the reality is much sadder. (Note: As I post this the numbers are even worse.)

Those pundits on CNBC who have been telling us for the last decade what stocks to buy, how we are now in a “bull Market”, how it’s the time to buy, how things are looking up for all us investors, have been blowing smoke.  Since many of their sponsors are investment companies, which make money whether your stocks go up or go down, just as long as you are buying and selling, it’s no wonder we aren’t getting all the facts.  So I thought it best to take all of CNBC’s advice with a ton of salt and do the math myself.  Here is what I came up with.

In order to see things more clearly let’s say that back in the year 2000 we invested one dollar in each of the averages, the S&P, the Nasdaq, and the DOW (ex. the DOW was at 10,557 so we invested $10,557 in the DOW, etc).  You would have had a total of $15,932 invested back then.  Today, even though we have seen a steep rise in the markets this last year, our initial investment would have turned into $13,876.  Look at the table below to see the break down.

June 19, 2000 June 19, 2010 Difference
S&P $1,486 $1,117 -$369
Nasdaq $3,889 $2,309 -$1,580
Dow $10,557 $10,450 -$107
———– ———– ———–
Totals $15,932 $13,876 -$2,056

For arguments sake I am taking the paltry dividends that the average stock is returning and using it to pay for our investment fees.  It makes seeing the numbers easier.

Upon first look it would appear that our initial investment has taken a loss of $2,056.  Pretty bad, right?  That’s only part of the story.

Over the last decade the inflation average has been 2.7%.  This is quite low historically so we have been pretty lucky.  But apply this to our current investment and you’re not going to feel too great about it.

After inflation of 2.7% per year, over 10 years, the $13,876 that we have still remaining invested would buy the equivalent of only $10,553 in the year 2000 dollars.  The difference between the $15,932 invested in 2000 and the buying power of today’s remaining investment of $10,553 is the equivalent of a loss of $5,379.  That means that our current investment is down 33% from the initial year 2000 investment.  And all we did was just let the money sit there.

Where did the money go?  It would literally have been better to have left the money under our mattress.  Don’t believe me?  If we would have left the original $15,932 under our mattress, we would still have the original amount left.  After inflation it would be worth only $12,117.  But that is still about $1,500 better than our investments did.

So, for those of us who are lucky to still have money to invest, what do we do with it?  I wish I knew.  I’m still trying to get over the shock of “doing the math”.

I can’t give investment advice, it is illegal unless one is certified, which is lucky for me since if I had given you advice, considering how my own investments have done, you’d probably be coming after me with pitchforks.  But I can say that I’m being very careful about whom I am listening to and being very conservative about what money I have left.

Good luck to all of us.

New from

Since we launched about 10 days ago eBooks in Thailand has added some great reads.

Title: How to Make a Living in Paradise, by Phillip Wylie  – If you want to know how to earn enough to live on in Thailand then check this one out.

Title:  Looking for Mr. Rin, A Families Roots in Northeast Thailand, by Lawrence Whiting  –  A memoir of a foreigner and his new family in northeast Thailand.  It is also a social and cultural study of the people of Isan.

Title: The Adventurer’s Guide to Early Retirement, 3rd Edition, A Common Sense Approach, by Billy & Akaisha Kaderli  –  Want to know how to retire early?  These are the experts and they share their secrets and experiences.

I always loved the Judy Garland and Mickey Rooney movies where they end up by saying, “Let’s put on a show!”  So much energy and creativity.  I had something like that happen to me a little while ago.  Mine went something like, “Let’s start a new business!”  Thus was born

eBooks in Thailand

I just read the other day that in the 60 days since its introduction, Apple has sold more than 2 million iPads.  One of the things you can do with an iPad is to read eBooks, or electronic reading material.  It is good that the world is changing since I have just written my first eBook.


Retired Life in Thailand is a sharing of experiences from my years of being retired here and helping prospective retirees, and it includes my writings from magazine articles and blog posts with a lot of added information.  We discuss what new retirees will probably encounter moving to and living in the Land of Smiles. What you will find in Retired Life in Thailand are discussions on how to go about making Thailand your home and how to understand the culture and people you will be living with.

I have been writing about retiring in Thailand for the last four years.  First, I started writing a monthly column for the Chiang Mai City Life magazine, and later developed a website, Retire 2 Thailand, where I lead prospective retirees to lots and lots of information about Thailand and how to retire here.  Later, I started this blog.

I thought the easiest way to get my book out would be to offer it as in eBook.  eBooks are less expensive than “paper” books, they’re simple to download, and are easy to read on your PC, or any one of the many eBook readers, including those ubiquitous iPads.  Take a look at Retired Life in Thailand to see more.  You can read a sample from the intro, and in the table of contents you’ll see what topics about retired life in Thailand I have covered.

Retired Life in Thailand is divided into  the sections: On Getting Your Retirement Started, On Daily Living in Thailand, On Staying Healthy, On Living in Thai Culture, and On the Thai Language.

Why start a new business?

Then I realized that I know lots of people who write about their experiences in Thailand.  And I set up eBooks in Thailand as Thailand’s eBook outlet for books about Thailand written by people who live or have lived here and know the country intimatately.

Check us out

eBooks in Thailand has just opened its virtual doors with the announcement on this blog.  Please check out Retired Life in Thailand as well as some of the other eBooks we have on offer presently.

We start our fledgling enterprise with a really comprehensive guide called the Expat Woman’s Guide to Living in Thailand. Then we have a Talking Textbook (with embedded recordings), Reading Thai Newspapers, and a collection of short stories called Occidental Adam, Oriental Eve. We are proud to offer a compilation of hundreds of beautiful photographs by local professional photographers, Digital Postcards of Thailand, and my own thoughts on retiring to the Land of Smiles, Retired Life in Thailand. More will be coming soon.

Prospective authors: If you have been looking for a way to get your writings “out there”, or if you already have written an eBook and are looking for another way to distribute it, contact us through http://ebooksinthailand.com/authors-page/ and maybe we can help.

Note:  I just got some feedback that the Internet Explorer browser is cutting off some of the text on our website.  Firefox and Google Chrome are working fine.  I am shocked to find that one of Microsoft’s products may have a bug.  Well, I’ve been here before and will try to find the fix asap.

June 21, 2010:  Got the problem with IE fixed.

eBooks in Thailand New Additions

Two new books have just come in since the launch, How to Make a Living in Paradise, by Phillip Wylie.  Mr. Wylie is a well known author in Thailand and the book’s title is pretty descriptive of what it is about.  And Looking for Mr. Rin, by Lawrence Whiting, a memoir of his experiences in northeast Thailand combined with a family and social history of the people of the northeast.  Check them both out.

About 100 years ago, and in a former life it seems, I was the director of the AUA Language Center in Chiang Mai (really it was the early 1980s). Starting out, AUA, or the American University Alumni Association, was THE place for Thais who wanted to study English.  Although the English teaching competition has grown lately, AUA is still going strong.  But now it is one of the more popular places for Expats to study Thai.

I am a big advocate of Expats or all ages learning as much Thai as possible, especially if we want to retire and live here.  I don’t advocate any one method of study or any specific school.  I do prefer classes over studying individually because language is the ultimate social tool and the give and take in the classroom setting seems to make learning the language more realistic and meaningful.

Below I interview Mr. John Gunther, a friend, and long-time director of AUA Chiang Mai about studying Thai in Chiang Mai.

Hugh:  Why do you think it is important for Expats to study Thai?

John:  First, Hugh, thanks for giving me the chance to talk about this subject — the study of Thai language at AUA in Chiang Mai.  Briefly, many Expats have decided to make Chiang Mai their home– whether that be for one year or the rest of their lives and, because of that commitment, wouldn’t it be to their advantage to live here as comfortably and enjoyably as possible?

In addition,  I know that many Expats want to make or are making valuable contributions to their new home.  So learning about the culture, the customs, and learning how to get along with their new “neighbors” in a sense, will make their lives more comfortable, enjoyable and their contributions more meaningful.

The best way to accomplish those goals is to be able to speak with and understand their Thai friends and colleagues. Being able to speak Thai will enrich their social and professional lives in so many ways.

Hugh:  What does AUA have to offer the student of Thai?

John:  A lot.  We have both group and private/individual classes in speaking, conversation and reading and writing. The group classes meet for six weeks, Mondays to Fridays, in the mornings (10 am to noon) and afternoons ( 1 to 3 pm), so students have a choice of when to study.  The classes are small, ranging in size from 5 to 12 and averaging about 8 students.  The cost is reasonable;  I like to think it’s good value for the money at Bht. 4,200 per 60-hour class.

There are 4 graded speaking/ conversation books and two reading and writing books in our curriculum. By studying one 60-hour book per six week term, a student could complete the entire 6 book program in about 9 months.  Students can also choose to study individually or with a partner or a group of up to 4 friends at our location or at the student’s home or office.  The times and dates of the individual classes are flexible, based on the students’ needs and schedules.  Again, the cost is very reasonable with hourly rates starting at Bht. 320 per hour for one or two students studying at AUA.

As added value, we have a small but very unique Thai studies library with dozens of books (in English) for further study of the language, culture and society.  Thai course students pay Bht. 100 per year for a membership but anyone in the Chiang Mai community can join for a membership fee of Bht. 400 per year.

I’d like to point out that AUA is a Thai, non-profit, educational institute so we really try our best to keep our fees down.

Hugh: How does the AUA Chiang Mai curriculum differ from that taught in Bangkok?  Please describe the AUA Thai courses.

John:    It differs a lot.  The approach in Chiang Mai is one of “focused practice”, which basically means that students are expected to speak– produce the language — from the first day.  Because Thai is a tonal language, if the student cannot speak the tones correctly, the listener will have great difficulty understanding.  Therefore, we focus on tones, as well as grammar and communicative conversational strategies during the class.

Some might think that the method is old fashioned, but it does work!  It recognizes that, as adults, we have something to say, we need to say it, and we have the ability to say it.  This is very different than the ALG (“Automatic Language Growth”, aka “comprehension” or “natural”) approach taught at AUA in Bangkok.

There, students listen to two teachers having a conversation about a pre-determined topic or situation;  for example, buying fruit in the market. The teachers use the vocabulary and structures related to the function of buying something and they speak to each other as they would in the “real world”.  They sometimes look at the students to gauge the students’ understanding of the situation and the language, but they do not require the students to interact or speak.

This continues with various situations or function for hundreds of hours of class.  The theory is that this is the way children learn their native language — by only listening to those around them that speak the language and at some point they then start to speak and eventually become fluent or native speakers– so that method can be transferred to adults learning a foreign language.  This is a very simplified description of the approach, but you get the idea, and the essential difference between Chiang Mai’s “focused practice” and Bangkok’s “natural approach”.

I realize that learners have different styles and there are different paths to language acquisition so I do not judge either method.  We have chosen a different path in Chiang Mai based on what our students have told us they want and their learning needs.  For more information about the ALG approach:   http://www.algworld.com/approach.php

Hugh: Many Thai language schools now are offering help with obtaining visas.  Does AUA help with this and how long is the visa good for?

John:  This is a very “hot” topic now in Thailand.  Yes, we offer visa assistance, and have been doing so for many years.  It’s just a matter of the type of assistance on offer.  Just recently the Thai authorities have allowed students to apply for and be granted a visa extension that could be up to one year based upon support from a language school or institute.

What AUA can offer is this:  If a student abroad wants to study Thai with us and needs visa assistance, we can issue them a letter stating that the student is enrolled in the Thai course for specific study dates.  The student would present this letter when applying for a visa at a Thai embassy or consulate abroad.  Since the Consular section recognizes AUA as a reputable school, they have been kind enough to grant an appropriate visa, usually a non-immigrant visa, that is valid for three months upon entry. Once that three month period is up, we now can have that visa extended, based on the student’s record of attendance at AUA and desired length of study, for up to 9 more months.  We’re just starting this procedure and have to work out some things, especially for those students already in country on a tourist visa, and set appropriate fees, but we feel that this can be very helpful for many who want to study Thai at AUA.

I should emphasize that we are a licensed school under the Thai Ministry of Education, and we  take that accreditation and responsibility seriously and would not issue visa support to anyone not honestly committed to studying Thai at AUA.

Hugh:  How long do you think one would need to study before being able to speak Thai well?

John:  Speak Thai well!?!  You’re asking the wrong person!  I’m a good example of a bad student who after all these years doesn’t speak Thai well.  According to my wife, I’m a buffalo in Thai!

I guess it depends on what you mean by “ability to speak Thai well.”   Seriously, I’d say you need several months of pretty intensive study of say 2 to 4 hours per day before you can feel comfortable outside the classroom to be understood and contribute in conversations.  I’ve known people who speak Thai well after only a few years of study and living close to the Thai community.  And remember, to be considered good at Thai language, you have to be able to read basic Thai, which will help your pronunciation, vocabulary development and cultural awareness.

Knowing a language requires a multi-skill investment.  You’re not getting your full money’s worth if all you can do is speak.  In investment terms, speaking is the principal, but reading is the dividend.

Hugh:  What advice can you give for the beginning student of Thai?

John:  One of my favorite jokes is the one about the passenger in a NYC taxi asking the driver, “How do I get to Carnegie Hall?” and the punch line is “Practice, practice, practice”.   This is so true about learning languages in general and Thai in particular.  But the practice has to have a focus to start with.  And I’m not just saying this because I run a language school, but I believe initially Thai is best studied with a good teacher (at AUA we have experienced, trained and dedicated teachers) in a “formal” situation.

What I mean by that is, NOT just hanging out with Thai family or  friends and “picking up” the language — which is okay, too– but in a setting conducive for learning — a classroom or a quite area of your house undisturbed or distracted by what’s going on around you, so you can focus.  Another avenue to success is to set aside time each day to study, doesn’t matter when; some people’s minds are more “awake” in the morning, others in the afternoon or evenings.  Whatever time is good for you, stick to it every day to review what you’ve been learning “in class”.  Also, remember that learning means making mistakes.  Don’t be afraid to try out those new words and tones outside the classroom in the real world.

I know, having lived in several countries and having tried to speak their languages, that it takes a brave heart to step up to someone and talk to them in a strange language, but the rewards can be unlimited.  Thai can be a tough language but fortunately the Thais just love it when a western face speaks to them. They are so thrilled and accommodating that the experience is usually a very pleasant and positive one for you, the Thai learner.

Another tip:  Back in the day, I learned a lot of Thai by watching Thai soap operas on TV, and while that is still an effective way to learn, today there are lots of self study resources on the web so be sure to look there, too.  I know you have some great links on your site to Thai language resources as well, Hugh.  The final important tip is: Don’t Give Up.

Hugh, thanks for the opportunity to answer these questions.  Now, for the unabashed plug;  If you’d like more information about AUA classes, you can find us at  www.learnthaiinchiangmai.com .

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