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  • FIRST POST
    • JohnRo
    • By JohnRo 20th Jun 13, 1:38 PM
    • 2,516Posts
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    JohnRo
    Monthly income
    • #1
    • 20th Jun 13, 1:38 PM
    Monthly income 20th Jun 13 at 1:38 PM
    Looking for some direction, how best to set up a solid portfolio for maximising reliable monthly income? I've looked at model portfolios and "best" lists until my head spins...

    I want to avoid individual shares due to transaction costs and their perceived higher risk but willing to listen to views on that. Many of the collective UK income funds I've looked at do seem remarkably similar. Is there any real advantage to be gained by selecting any more than one good fund, perhaps overcomplicating something that only really requires picking one and just getting on with it?

    At the moment I'm leaning towards picking just the one fund and ploughing the monthly income back in initially, to boost the pot, but with a view to then taking a regular income in a year or two. The only goal at this stage is to provide a strong but sustainable income for incomes sake for ever.

    I have a - relatively - large LTBH growth portfolio elsewhere. I am looking at this in complete isolation and purely as an alternative to cash savings (save for the emergency fund)

    The fund I've considered perhaps most suitable is the IP Distribution Z fund but I have to admit I'm a little uneasy about the level of bond exposure there. Also the yield seems a little low compared to some but I do wonder about the sustainability and capital preservation of funds claiming yields of 7% or more.

    Any suggestions or ideas folks?
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
Page 18
    • JohnRo
    • By JohnRo 13th Jan 18, 8:02 PM
    • 2,516 Posts
    • 2,275 Thanks
    JohnRo
    DAY 1663 - (08/01) update for those interested.

    tl;dr - Scheduled additions, £500pcm, more of the same.

    Trailing average Monthly Income managed to hit the £500 mark ahead of expectation thanks to a liquidation payment from LSLI that I wasn't expecting. It wound up and paid out last April. I've classed the payment as a special dividend for recording purposes.





    Purchases made since the last update in August..

    2017-09-29 383 JPMORGAN ASIAN IT 3.47
    2017-10-17 320 TWENTYFOUR INC 1.21
    2017-11-07 750 STD LF INV PRP INC 0.91
    2017-11-27 77 VANGUARD INTL EQUI GLBL EX US REAL ESTATE IDX (SIPP)
    2017-12-27 180 INT BIOTECH 6.15
    2018-01-08 290 JPMORGAN ASIAN IT 3.77

    Two more scheduled purchases before the new allowance lands in April. I front loaded this/last years contribution but plan to make this next year's allowance far more evenly distributed throughout the FY, since there's a chance markets might drop significantly at some point and I don't want to be left staring at good rebalance opportunities later on with no dry powder left, that's if there's the sort of volatility seen in previous years.



    JAI has done reasonably well since adding it, rather than replacing AAIF with it, once the purchase hit is accounted for. I hadn't planned on another JAI purchase so soon but the spreadsheet allocation priority demanded it and the effect is always cost neutral overall within the one monthly purchase schedule anyway, so no harm done.




    Costs continue to reduce in percentage terms as hoped/expected, due to the rising capital valuation. I'm still in the process of consolidating this portfolio, currently spread accross several accounts. This is why I've been syphoning the dividends in some accounts and will eventually plough them back into the main account via contributions at some point in the furure.
    It will introduce some additional transaction costs short term but needs to be done for my sanity and might help to claw costs back later. The pace at which that's happening won't inflict any noticable damage.



    RDL is still struggling but I'm a lot more comfortable holding that in the debt category than UKML which is going to be ditched in favour of another 2% slot in the specialist category at some point, when I decide what replaces it. I want the higher risk which RDL offers, without a catastrophic failure obviously. I'm expecting it to do well eventually whereas UKML by contrast seems to be heading nowhere.

    Added VNQI (SIPP) and IBT, high hopes for IBT longer term, time will tell, as always.



    Projections are still looking healthy thanks to current equity trend.





    I also intended posting a discrete annual performance chart but still working on that as I'm not happy with the current methodology in the spreadsheet. 2017 calendar year shows approx. +17% net total.

    That's all folks, hope those interested found it so, next update around April (with annual performance chart)

    Over and out.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • ColdIron
    • By ColdIron 13th Jan 18, 8:38 PM
    • 3,749 Posts
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    ColdIron
    Trailing average Monthly Income managed to hit the £500 mark ahead of expectation thanks to a liquidation payment from LSLI that I wasn't expecting. It wound up and paid out last April. I've classed the payment as a special dividend for recording purposes.
    I received this and wasn't expecting it either, any plans on how to report it to HMRC? I received a notice telling me it was a second Liquidation Payment (though no sign of the first, I allowed it to be converted to Consistent Practical) though my statement refers to it as a Return of Capital. Is it a Capital Gain or something else?
    • JohnRo
    • By JohnRo 13th Jan 18, 8:47 PM
    • 2,516 Posts
    • 2,275 Thanks
    JohnRo
    I received this and wasn't expecting it either, any plans on how to report it to HMRC? I received a notice telling me it was a second Liquidation Payment (though no sign of the first, I allowed it to be converted to Consistent Practical) though my statement refers to it as a Return of Capital. Is it a Capital Gain or something else?
    Originally posted by ColdIron
    I really don't know the answer, I'd assume since the company is gone this has to be a capital payment since it can't pay dividends if it doesn't exist?

    My classifying it as dividend payment is purely for spreadsheet purposes, also I held LSLI in my ISA at the time so it's a problem I don't have to solve thankfully.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
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