Experienced people: if you had to do 30+ 40+ year investing again?

Not_Me_Officer · 17 June 2017 at 8:46AM

I was on another website/forum late on last night and a poster was detailing what they would do if they could go back in time and invest for the long term - 30+ 40+ years (retirement basically). What stood out for me is they were actually detailing for a mid 30s person when most of the posts like that i read i get the impression they're for early 20 somethings. Of course one post from one person is just that persons opinion but since i'm a member here & not there it made me wonder.

I've already pretty much decided what i'm investing in, although i may add a second fund. I'm just looking at where and in what (ISA/pension) so don't worry i'm not asking for you to select for me.

All my research has also been done for my wife, my sister & my brother as we're all looking to do the same thing (save for retirement) but just with differing amounts and views on risk.

So that i can relate to your answer i'd just say...

* from a mid 20s perspective and a mid 30s perspective (obviously my siblings are mid 20s with £10k and £4k invested, my wife and I are mid 30s with £7.5k each ready for investing)

* already meeting the requirements to get the most out of the auto-enrolment workplace pension (which is unfortunately the minimum, no salary sacrifice available for any of them) would you ISA/pension/both? Would you put more in one than the other?

* what would you invest in? (maybe not specific funds (such as maybe you don't say specifically VLS100 but would maybe say index trackers that include xyz))

AnotherJoe · 17 June 2017 at 9:35AM

I would have a small allocation, say 10% for "gambling" on individual shares, and then the rest in funds, most of which would be index trackers. I did the opposite until recently, which worked out well, through a mixture of luck and good stock picking ( in that order), but i suspect would have been better and certainly with fewer wild swings, had i taken a simpler strategy.
Age doesn't matter.
If high rate tax payer, pension is a no-brainer, if standard rate i can see the upside of ISAs over locking the money away (but if this investing is for a pension locking it away out of temptation is probably a good idea.)
I would also buy a bigger house than i needed so i could downsize much later and take out a lot of tax free gains.

Not_Me_Officer · 17 June 2017 at 9:45AM

I knew i'd forget something - all those involved for the purpose of me asking are basic rate tax payers and all of us will probably remain that way throughout our working lives.

However regards salary sacrifice i said that it was a no go for all of us. I just realised after posting this that it's only a no-go for everyone except my wife who actually hasn't put it to her employer, so that may or may not be an option. Until it's agreed it obviously isn't an option but it might be one.

I think my wife and I are quite lucky with the house buying. I was able to save up quite a deposit for my age and we bought what would probably be most peoples second home. Around this area at least. We're getting towards being too old to have children so if that ship sails then we'll be 2 people in a 3 bed semi - so plenty room to downsize.

At the moment i'm currently looking at the idea of running 1 fund alongside the VLS80. After more reading i found it was lacking in areas. I don't want to spread too thinly and have 3-4-5-6 funds especially on the amounts i'm working with (7.5k deposit with £200pm) so i'd max out at 2 (VLS80 being one of them). I think i'm going to take a day or so off from it all though as i've done nothing but read for about 2 weeks solid it seems

Thanks for the response.

Apodemus · 17 June 2017 at 10:10AM

What would I do?

Start earlier.
Hold less of a cash emergency buffer.
Put 10% of after-tax income away at the start of every month into savings/investments.
Always reinvest dividends.
Understand the awesome value of compounding at an earlier age.
Switch to pension focus at age 45.

Apart from that...spend more on "wine, women and song"!

AnotherJoe · 18 June 2017 at 10:34AM

Not_Me_Officer wrote: »

I think my wife and I are quite lucky with the house buying. I was able to save up quite a deposit for my age and we bought what would probably be most peoples second home. Around this area at least. We're getting towards being too old to have children so if that ship sails then we'll be 2 people in a 3 bed semi - so plenty room to downsize.

I suspect you wouldn't. In my case i would certainly have been quids in had a I bought a 4 or 5 bed instead of staying in a 3, and you can certainly downsize from a 4 or 5 bed to a 2 with money left over.

I doubt that downsizing into a 2 from a 3 would save you much if anything especially if for example it was into a purpose built flat which at decent spec is likely to cost similar. Plus I suspect the SDLT and similar taxes will wipe out the difference between a 3 and a 2 anyway.

TheTracker · 18 June 2017 at 11:03AM

Not_Me_Officer wrote: »

I knew i'd forget something - all those involved for the purpose of me asking are basic rate tax payers and all of us will probably remain that way throughout our working lives.

If only you had as much ambition and drive to increase your income as you do to manage your savings for retirement.

Earn more, save more, spend less. Try to tackle all three.

bostonerimus · 18 June 2017 at 2:09PM

TheTracker wrote: »

If only you had as much ambition and drive to increase your income as you do to manage your savings for retirement.

Earn more, save more, spend less. Try to tackle all three.

If I knew what I know now, then back in 1987 I'd have put all my money into something like AAPL.

But that's just fantasy, so I wouldn't change anything. I'd be frugal, educate myself so I could DIY and avoid unnecessary IFA and fund fees and save regularly into low cost index tracker funds. I probably have another 30 years of retirement and will have to manage my money and I'll do that same as I've been doing for the last 30 years as that's worked quite well......APPL would have netted me 20% annual return, but my index trackers have give me 8% a year and that's been easily enough to retire on at age 52.

Not_Me_Officer · 18 June 2017 at 2:24PM

TheTracker wrote: »

If only you had as much ambition and drive to increase your income as you do to manage your savings for retirement.

Earn more, save more, spend less. Try to tackle all three.

Things are easy when we talk about them.
Even easier when we talk about other peoples situations.

Knowing what you want to do is probably 75% of the battle.

cynicaldoc · 19 June 2017 at 12:21PM

I would have bought as much Bitcoin as I could have afforded 10 years ago and held my nerve!

AimHigh · 19 June 2017 at 1:11PM

Apodemus wrote: »

What would I do?
Switch to pension focus at age 45.

When you say 'switch to pension focus' - what would you be focused on between 'starting earlier' and 45?

Eco_Miser · 19 June 2017 at 1:49PM

TheTracker wrote: »

If only you had as much ambition and drive to increase your income as you do to manage your savings for retirement.

I spent the last 18 years of my working life on 15-25 hours a week. I'm sure i enjoyed the extra free time more than I'd have enjoyed the extra money.

I still ended up with more income than I know what to do with.

Experienced people: if you had to do 30+ 40+ year investing again?

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