The Thailand Salary Trap: What Every Working Expat Needs to Know

[00:00:00] If you’re new to Thailand and you’re thinking about living and working here, then it can really seem like the dream. But I’m here to tell you that as much as it’s a great place to live and a great place to work, there is a reality to it that you need to be aware of as well. And that is that as much as the cost of living is lower in Thailand, the salaries are also much, much lower It’s easy to fall into what I call the Thailand salary trap.

[00:00:23] And that is that you end up getting acclimated to Thailand and then before you know it, you can’t actually travel outside the country. Or if you’re earning a lot of your living here in Thailand, then when you retire, you’re gonna struggle to move back to your home country or to another country that has a higher cost of living.

[00:00:39] Now, I’ve actually worked my way through this trap myself, and I can tell you that it is possible to have a life where you are living a good life in Thailand with a lower cost of living, but you’re anchored more to international salaries. So even when you retire or you get later in your career, you still have that mobility that you might want to go somewhere else down the road.

[00:01:01] Now I’m Scott Pressimone and I’ve been in Thailand since 2012 and I started working here in about 2013. When I moved here, I did not come in on an expat package.

[00:01:13] Expat packages are very different than local salary packages, and so when I came in, I was maybe a little impatient. I didn’t wait for a big international company to transfer me here. Instead, I came on the ground and said, I’m gonna make it work myself. And it is a much more challenging, way to do it, but it is possible.

[00:01:32] I knew that I would take a lower salary in Thailand. I just didn’t know how low it would be. Because I was anchored to my US salary, which at the time was coming up on six figures and I was in my twenties and I was bright-eyed and bushy-tailed and I thought, Hey look, if I come to Thailand, I might be able to earn a little bit less. But I’ll still live a live a good life here.

[00:01:53] But what I wasn’t expecting was to earn a fifth of what I earned in the US And I was naive, I was young and I just didn’t expect that big of a drop. But that was the reality for me.

[00:02:04] If you are able to save money here, that’s great, but

[00:02:08] you have to ask yourself the question of how far can your earnings go outside of the country? I’m just gonna use a very simple example, but let’s say that you earn 50,000 Thai Baht per month which is pretty common for someone getting their first job here. If you earn that and you’re able to save 20%

[00:02:25] That means you’re saving about $300 per month or $3,600 a year. And while that might sound okay, you then have to fast forward a bit and say, what if you’re doing that for the next five or 10 years and you’re saving about $3,000 a year? Is that enough that you’re able to invest that and then at least have a path to retirement?

[00:02:46] Or is that not allowing you to build up the nest egg as fast as you need to? You can also think about other unforeseen things. Like let’s say you end up having to move home on short notice to take care of aging parents. Or let’s say you have children. that’s very likely to increase your cost by quite a bit here.

[00:03:03] Or you maybe have a medical emergency.

[00:03:05] Retirees will often point to the fact that just 30,000 Baht is all they need to live a good life in Thailand because they have a nest egg and all they’re trying to do is live off their investments.

[00:03:16] And sure you can allow yourself to extend your savings for a very long time in a low cost of living area. But those individuals earned their money outside of Thailand. If you are looking to earn your money in Thailand for any portion of your career, then you’re in a very different situation.

[00:03:33] Let’s say the cost of living is a quarter or 25% of what the cost of living would be in your home country. If you’re earning one fifth of what you’d earn in your home country, then you’re actually not ahead. Of course, you can live a good life here and maybe you enjoy it more and it’s worth it to you, but just know that you certainly are gonna be affecting your finances if your salary goes down that much and you’re saving a bit on cost of living.

[00:03:58] There’s also a couple other things to be aware of, which is you might not get the same type of packages you get in your home country outside of the salary, and that includes the perks.

[00:04:06] So maybe the health coverage is gonna be lower. Maybe you’re not gonna get some investment fund match or contribution. Those are gonna be a little bit less common in Thailand as well. And the other thing to keep in mind is that there are plenty of people that want to take your job. Because so many foreigners travel here and then they decide they wanna work here.

[00:04:24] And so if you’re not satisfied with the lower salary of an employer, chances are they have a huge number of people behind you in line that are willing to take your job. And so that’s where you’re not gonna have a whole huge amount of upward mobility because there are so many foreigners willing to work for less. But as I said, I got out of this and I’m gonna show you what I actually did. So the first thing I did was I applied to a ton of professional jobs when I first got here. And truthfully, I didn’t get a lot of responses. I didn’t get a lot of interviews. It was actually really frustrating ’cause I was used to doing so well in the US and when I came here and didn’t get a lot of replies, even when I was highly customizing my resume and my cover letters.

[00:05:02] I still just didn’t get invited to a lot of interviews. And that was again, the reality check for me. But I eventually did land a job and that’s where I had to swallow my pride, take the lower salary. And my first job I took for 40 to 50,000 Thai Baht. And over the next two to three years, I switched jobs a few times, usually staying for about a year.

[00:05:22] And the reason I would always switch jobs was because several jobs are entry level jobs here where they’re gonna remain entry level. You’re gonna have a glass ceiling there. There’s just no other positions in the company and they only have a certain number of positions for foreigners. If you don’t have that upward mobility, then what are you doing right?

[00:05:40] Do you really wanna have that same job the next year and the next year?

[00:05:43] I eventually did find a job where there was some upward mobility. Now, at the time, I actually took a salary cut to move to that job though. So I saw that the company was growing. I knew what they were offering and I knew I could contribute to it, but I had to accept the job that they had available.

[00:05:58] And so I took a salary cut. And I ended up working from 8:00 PM to 5:00 AM. So working night shift, working with US clients in the US time zone. And I did that for several months until other opportunities arose where I was sort of noticed for that job. And then I took other positions within the company. And I actually hopped into several different positions within the company until I eventually was on the executive team.

[00:06:22] But during that time, I always was negotiating for compensation packages that were heavily focused on commission based. And by doing that, I was lowering the risk to the employer, but also increasing the potential of what I could earn. And I did very well on commissions and I was able to increase my salary pretty drastically.

[00:06:44] And over about the eight years I was there in multiple positions, all of which had a big portion in commissions, I was able to 7x my salary over those several years.

[00:06:53] And then the big unlock was of course, starting my own company because you have the most upward mobility when it’s your own company.

[00:07:00] And so now I have a consultancy here where I help a lot of local businesses as well as businesses outside of Thailand. And the reason I’m able to get compensated well for the work that I do in my consultancy is because I solve very big problems.

[00:07:13] And since I’m able to solve very difficult, very expensive problems, i’m able to get compensated in a way that’s very affordable to the end company, but also is allowing me to earn, a pretty decent salary while I’m here.

[00:07:27] I knew what I wanted to earn, and I anchored myself to that, to be able to pull myself up so that I didn’t fall into the Thailand salary trap.

[00:07:35] So the steps are this. The first thing is to set your own clear goals and know what you need to either retire or to live the life that you want.

[00:07:41] Step 2 is to accept a job, even if it isn’t perfect, because you have to become stable and someone people can rely on in Thailand. So many people come and go and you need to show that you’re actually here for the long term. Step 3 is to continue and grow your network and meet with people while you’re here. So upskilling and then always meeting new people.

[00:08:00] Step 4 is to accept opportunities that offer upward mobility. And step 5 is to, this is not for everyone, but it’s to own your own business because that has the most upward mobility.

[00:08:11] Now, if you enjoyed this and you got some value out of it, I’d appreciate if you like and subscribe. If you have some ideas of your own, go ahead and leave them in the comments. You can feel free to disagree with me there as well, and

[00:08:22] I will catch you on the next one. Bye for now.