Cheap Houses (~$50,000) in South-East Asia

The Christmas and New Years holiday is coming to an end. I had some minor surgery yesterday and so had permission from the doctor to take today off to recover, but tomorrow I will need to go back to work. I am dissatisfied with my job at the moment. I'll try to fix this problem by finding a new job. I haven't been applying for job for about a year, so getting back into it is difficult, but I am motivated by the desire to leave my old life behind and try something new.

Most people think they need $1 million before they can retire. They base it on the assumption that they would need to earn about $50,000 a year to have a reasonable retirement. In order to generate $50,000 per year from an investment that provides 5% per year, you'd need $1 million. But saving $1 million could take decades. Assuming you earn the average $50,000 per year, and then assuming that after deducting taxes and living costs you can save $30,000, then it will take you 33 years to save up $1 million (assuming, for simplicity, your savings produces no interest). In other words, you need to slave away for 33 years! I have gone through only four years of full-time work and I'm ready to throw in the towel!

There needs to be a better way.

One solution is to retire in South-East Asia. A normal two-story house with three bedrooms in an east-coast city in Australia will cost about $500,000. With aggressive saving, this will take about 15 years to pay. With a mortgage that adds interest charges and other fees, it may take longer, say, 20 to 30 years to pay off your mortgage.

However, according to the YouTube video above, a normal two-story house with three bedrooms near Chiang Mai, Thailand costs around $30,000 to $50,000. That is ten times less! Therefore, instead of working 20 to 30 years before you can afford retirement, you can afford retirement after two or three years of aggressive saving!

According to JC, there may be laws in Thailand or other Asian countries that prevent foreigners from owning real estate. Another option may be, instead of using your savings to buy a house, to put it inside a savings account in Australia (or the US or Europe) and then transfer the interest income to Asia to pay for the rent. This will often work because interest income on savings accounts tend to more or less be the same as as rental yields. Renting may be a safer option because, if you live in Chiang Mai for a while and don't like it, renting provides you with flexibility to move away whereas buying real estate normally comes with massive moving costs. If you have equity in your home, you can convert that into an income stream by renting the house out. This rental income stream, in addition to stream of income from interest on savings, can be combined to fund living costs in Chiang Mai.

What this means is that, for me, I could retire right now, even though I am still in my late twenties. For those who don't have any money, all it takes it two or three years of aggressive savings before you can afford to retire in Asia. There is hope.