RMF And LTF
Who desires some free money? Are you just stating you want some free money, or do you want some free money really? I’m sure you’re asking – what’s the catch? The capture is patience, lots of patience, and the understanding it might not be a smooth ride. Like I before mentioned, tax-deductible investments in Thailand may be some of the best investments in the world that are available to the average person.
LTF means Long-Term Equity Mutual Fund and RMF mean Retirement Mutual Fund (details below). The total amount you make investments (subject to certain limitations that are explained below) is deducted from your taxable income. Let’s say your taxable income before investments is 1,500,000B (48,000 USD). So, you have only spent 75,000-B (2,400 USD) of your money (100,000-B preliminary investment – 25,000-B tax savings), however your total investment has already been worth 100, from day one 000B.
That’s a 33% gain in the first or just from taxes savings! The true profits come from leaving your cash invested long-term to take advantage of compounding returns. You must keep your LTF investment for about 6 years, however the longer your cash is invested, the more likely you are to produce a profit. If you would have invested at the beginning of 2016, by 2018 it could have been well worth 138,000B (4,400 USD). That’s an 84% gain in just two years from your original 75,000-B (2,400 USD)! But, we’re not yet done making money. Leave that money invested long-term, like 10, 15, 20, or even 30 years to take the benefit of the long-term gains in the market.
If you have lost money after keeping your investment for 30 years, which in our example means it is down more than 25%, that investment is likely to be minimal of your worries. To take full advantage of all the free money the Thai federal government is giving you, invest the utmost amount allowable in LTF and RMF (30% of your salary) each year you will work in Thailand and leave it invested long-term. That real way, you can take advantage of the instant 33% profit on your initial investment each year, as well as take advantage of the long-term gains in the market.
- State Bank or investment company of Patiala
- 8 FD Partial Withdrawal
- Extremely Simplified Assumptions
- 2012 total resources
- Part 1 (Passion)
- 186 NiSource Inc. (NYSE:NI) -41.3% 11.08 18.89
- You’ve won a valuable prize or large amount of money
- Investment expenses in excess of 2% of AGI that are allocable to investment income
You will get taxes forms by email or by regular email from the asset management company at the beginning of another year and you post those forms when you document your taxes to confirm your buys. And guess what, we’re not done still! Other countries have similar tax-deductible investments, but where Thailand really shines is when you retire and can withdraw your cash tax-free.
While other countries allow your tax-deductible investments to develop tax-free as well, you will need to pay tax on increases in size once you retire and withdraw your money. Thailand will not tax capital gains on the stock market. In order that means after your investments have grown for many years, any increases you make are tax-free. And this is the closest to free money anybody shall ever see in our lives!
Please, note that stock marketplaces do not go up in a right line and past performance can’t be used to predict future returns. There will be drops, and it’s possible for the market to go down 30% to 50% or more in a single year, but the longer you are spending the more likely it is you will have a positive come back. A good way to smooth out that roller-coaster ride is to use dollar-cost-averaging, on a monthly basis this means trading.
If you are planning to invest 100,000B during the year, separate it by 12, and make investments about 8, every month 000B. That way you may take the benefit of lower prices and purchase when the market is on sale. Don’t listen to doomsday predictions about the Thai stock market that a lot of individuals enjoy discussing with anyone who’ll listen. I recall people saying they didn’t want to invest in LTF and RMF ten years ago because these were worried what would eventually Thailand when a certain major event occurred.