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  • FIRST POST
    • Stravinsky
    • By Stravinsky 11th Jul 17, 11:01 AM
    • 40Posts
    • 28Thanks
    Stravinsky
    Decision time on finances
    • #1
    • 11th Jul 17, 11:01 AM
    Decision time on finances 11th Jul 17 at 11:01 AM
    I'm interested in peoples opinions as to whether my train of thought is just stupidity.

    I'm coming up to 64 and have two separate "pots". One stands at £120k split between two companies and is in drawdown at the moment for a small amount of £160 a month ... The IFA takes £45 a month in fees. Ive already taken my 25% tax free.

    The other is hovering around £94k invested across a number of investments. It was invested in 2006 and was £100k and I've been taking around £200 - £300 a month from it since that year.

    My wife has a state pension and a Civil Service pension - I'm almost a kept man!

    As none of us know when wer're going to die, I've taken the view that by the time I reach 80 my financial needs will be a lot less than now, as my wife is 4 years older than I. So my plans for income are rapidly becoming based on that.

    Now, I cant complain that the investments over the last 10 years or so, despite the crash, have done well. However, my thoughts have turned to Brexit and what that might ultimately do to my investments and the obvious safe choice would be to remove the £94k and reinvest it somewhere less volatile ... but of course less productive. I'm told removing it is not taxable, I have to check.

    So .... has anyone been in a similar situation, or is concerned about the brexit effect ... and has anyone found a solution. If I were to put the £94k in interest accounts based on the age I mentioned it would give me just under £6k a year before it ran out and combined with the other incomes it would be a decent income as we have no debts or mortgage

    Look forward to your constructive comments
Page 1
    • eskbanker
    • By eskbanker 11th Jul 17, 11:22 AM
    • 5,464 Posts
    • 5,270 Thanks
    eskbanker
    • #2
    • 11th Jul 17, 11:22 AM
    • #2
    • 11th Jul 17, 11:22 AM
    However, my thoughts have turned to Brexit and what that might ultimately do to my investments and the obvious safe choice would be to remove the £94k and reinvest it somewhere less volatile ... but of course less productive.
    Originally posted by Stravinsky
    Brexit may not be a negative factor - if, for the sake of argument, sterling plummets but you have a global investment portfolio that's largely unaffected, then the value of your pot would increase substantially! What are you invested in?
    • AnotherJoe
    • By AnotherJoe 11th Jul 17, 11:22 AM
    • 7,257 Posts
    • 7,781 Thanks
    AnotherJoe
    • #3
    • 11th Jul 17, 11:22 AM
    • #3
    • 11th Jul 17, 11:22 AM
    I dont see how anyone can comment on your plan to invest it "somewhere less volatile" when no one knows what its currently invested in.

    It is though a perfectly valid approach to decide to just burn the money down if you dont want to take investment risk, you could put it in a "ladder" of fixed rate savings. Split over 1,2,3,4 and 5 year accounts.

    FWIW my expectation is that Brexit will be a big mess for the next 5 years or so, maybe the dust will start clearing by then, so for that period I plan (and am) mostly invested overseas, a lot of it in general global tracker funds. I dont though envisage needing that money for ten years. Money i need for the next 1-3 is invested in a variety of 1 and year accounts, though even the best of those is only a tadge about 2%.

    You could also look at P2P lending, I might do that next year when P2P ISAs are more available
    • greenglide
    • By greenglide 11th Jul 17, 11:23 AM
    • 2,843 Posts
    • 1,820 Thanks
    greenglide
    • #4
    • 11th Jul 17, 11:23 AM
    • #4
    • 11th Jul 17, 11:23 AM
    That would depend on what you expect brexit to do! I have my opinion but everyone is different.

    If you invest globally with no UK bias then you should be protected against UK specific horrors and if the pound falls you will benefit. If the UK economy does well and the pound rises would may lose a bit but only if global markets do badly.

    Remember that when looking forward many years to estimate how long savings will last that you must take into account inflation. Inflation is the main risk, we are currently tending to ignore it.
    • Stravinsky
    • By Stravinsky 11th Jul 17, 2:10 PM
    • 40 Posts
    • 28 Thanks
    Stravinsky
    • #5
    • 11th Jul 17, 2:10 PM
    • #5
    • 11th Jul 17, 2:10 PM
    @eskbanker
    7IM AAP Income Class A
    Artemis Income Fund Class I
    Invesco Perpetual Monthly Income Plus (Acc) GB0033028886
    M&G Episode Income Fund
    Rathbone Blue Chip Income & Growth
    SSGA GBP Liquidity Fund Inst Stable NAV

    EDIT: if I'm not wrong it's leaning very much towards the UK

    Some interesting points there about the spread of investments ... I need to check the % UK against non UK as I'm honestly not sure about the above funds. I am of course aware that no one knows what brexit will do to us. It's all opinion, it's just that my opinion based on what economists have said and the talk of movement of companies out of the UK , makes me think it may be detrimental. I'm no expert, but Ive seen nothing to show that the £ will recover any time in the near (or even far) future
    Last edited by Stravinsky; 11-07-2017 at 2:39 PM.
    • Eco Miser
    • By Eco Miser 11th Jul 17, 5:18 PM
    • 2,991 Posts
    • 2,767 Thanks
    Eco Miser
    • #6
    • 11th Jul 17, 5:18 PM
    • #6
    • 11th Jul 17, 5:18 PM
    I'm no expert, but Ive seen nothing to show that the £ will recover any time in the near (or even far) future
    Originally posted by Stravinsky
    So the obvious thing to do is invest in other countries, through global funds. That way, as the pound falls, your holdings measured in GBP rise.
    Eco Miser
    Saving money for well over half a century
    • skcollo
    • By skcollo 11th Jul 17, 6:00 PM
    • 617 Posts
    • 1,658 Thanks
    skcollo
    • #7
    • 11th Jul 17, 6:00 PM
    • #7
    • 11th Jul 17, 6:00 PM
    I'm interested in peoples opinions as to whether my train of thought is just stupidity.

    I'm coming up to 64 and have two separate "pots". One stands at £120k split between two companies and is in drawdown at the moment for a small amount of £160 a month ... The IFA takes £45 a month in fees.
    Originally posted by Stravinsky
    £45 a month ? What has been done over the last year to "earn" her/his £540?
    Or the year before?
    • Stravinsky
    • By Stravinsky 11th Jul 17, 8:49 PM
    • 40 Posts
    • 28 Thanks
    Stravinsky
    • #8
    • 11th Jul 17, 8:49 PM
    • #8
    • 11th Jul 17, 8:49 PM
    £45 a month ? What has been done over the last year to "earn" her/his £540?
    Or the year before?
    Originally posted by skcollo
    Very little, but thats another story :-)
    • eskbanker
    • By eskbanker 12th Jul 17, 12:26 AM
    • 5,464 Posts
    • 5,270 Thanks
    eskbanker
    • #9
    • 12th Jul 17, 12:26 AM
    • #9
    • 12th Jul 17, 12:26 AM
    Very little, but thats another story :-)
    Originally posted by Stravinsky
    I think the point was that it should be regarded as the same story, i.e. why pay an IFA a monthly fee but then come to a public web forum when you're looking for independent financial advice!
    • Stravinsky
    • By Stravinsky 12th Jul 17, 9:21 AM
    • 40 Posts
    • 28 Thanks
    Stravinsky
    I think the point was that it should be regarded as the same story, i.e. why pay an IFA a monthly fee but then come to a public web forum when you're looking for independent financial advice!
    Originally posted by eskbanker
    Well, I get your point ...... but no not exactly the same story.

    I came here because my immediate thoughts as I indicated were to remove the investment portfolio into cash and I know generally that an IFA is generally going to advise against it. After all, their income is dependent on the fund remaining there

    I hadnt considered the split between UK and non UK investments making such as difference .... as I said, I'm no expert. After that was mentioned here I looked at the split, and it seems heavily balanced in the way of the UK, and Ive asked the question of the IFA. But I shouldnt have to when he's taking fees for administering it.

    So it's a valid action posting on a public forum because it raises points from people who are clearly more savvy than I am.
    • JohnRo
    • By JohnRo 12th Jul 17, 12:09 PM
    • 2,431 Posts
    • 2,185 Thanks
    JohnRo
    It's worth mentioning that UK blue chips are internationally oriented businesses.

    That's where it appears many of your UK investments are so the effects of the idiocy on the UK economy proper won't necessarily or directly translate to the same effects on your investment portfolio anyway.

    Whether it's wise to have a predominant UK allocation in a balanced portfolio, irrespective of the summer madness, is a separate matter.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
    • Thrugelmir
    • By Thrugelmir 12th Jul 17, 1:13 PM
    • 55,244 Posts
    • 48,497 Thanks
    Thrugelmir
    So .... has anyone been in a similar situation, or is concerned about the brexit effect ... and has anyone found a solution.
    Originally posted by Stravinsky
    A fully diversified portfolio. When investing expect the unexpected. As it's what's going to happen that isn't forecast that will be the biggest iceberg you may encounter.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • skcollo
    • By skcollo 12th Jul 17, 1:52 PM
    • 617 Posts
    • 1,658 Thanks
    skcollo
    I think the point was that it should be regarded as the same story, i.e. why pay an IFA a monthly fee but then come to a public web forum when you're looking for independent financial advice!
    Originally posted by eskbanker
    I sort of wondered what 22% of Stravinskys income was being spent on.

    I'm only guessing, of course, but it might be as much as a yearly chat to say the underlying investments were performing around the average.

    "IF" Stravinsky just severed ties with his IFA and posted his holdings on here he would get "comments/views", or he could simply sit where he is invested and learn to be his own unqualified IFA.
    • Stravinsky
    • By Stravinsky 13th Jul 17, 6:51 PM
    • 40 Posts
    • 28 Thanks
    Stravinsky
    I sort of wondered what 22% of Stravinskys income was being spent on.

    I'm only guessing, of course, but it might be as much as a yearly chat to say the underlying investments were performing around the average.

    "IF" Stravinsky just severed ties with his IFA and posted his holdings on here he would get "comments/views", or he could simply sit where he is invested and learn to be his own unqualified IFA.
    Originally posted by skcollo
    Heh heh, you're remarkably right. Once a year I have a review meeting. I'm not sure anything will change, unless I change my attitude to risk. Because of my age / approaching retirement its in lower risk investments.

    I understand totally your last comment, and it is very true ... those are my choices, but I dont think I have the knowledge or experience to make those investment decisions on my own.
    • Shashy
    • By Shashy 14th Jul 17, 9:12 AM
    • 48 Posts
    • 43 Thanks
    Shashy
    I understand totally your last comment, and it is very true ... those are my choices, but I dont think I have the knowledge or experience to make those investment decisions on my own.
    Originally posted by Stravinsky
    Then don't make the decisions; copy and paste the portfolio your IFA has put together for you. Voila - no IFA fees.
    • deeplyblue
    • By deeplyblue 14th Jul 17, 12:41 PM
    • 150 Posts
    • 176 Thanks
    deeplyblue
    I've taken the view that by the time I reach 80 my financial needs will be a lot less than now, as my wife is 4 years older than I.
    This is where your analysis and mine diverge. I rather expect that the last years of life will be the most expensive.

    Have you decided how you will expect your wife to finance your care if you develop dementia and need to go into a nursing home, or vice versa? If you want privately financed care, then the costs are truly frightening and can go on for years. Maybe the sale of your home would finance your care - maybe not. Maybe home care would work, but that doesn't always pan out either.

    My late father-in-law went into private care at a cost of £800/month. That was 10 years ago. Now all costs in the care sector are rising and will only get worse with Brexit and the withdrawal of East European labour.

    You may have all this factored into your plans - or you may be gambling that you won't have to worry about that. I may be stepping over the bounds of "constructive comment", if so I apologise, but I would suggest that you take a look at this issue.
    • Stravinsky
    • By Stravinsky 26th Jul 17, 9:04 AM
    • 40 Posts
    • 28 Thanks
    Stravinsky
    Then don't make the decisions; copy and paste the portfolio your IFA has put together for you. Voila - no IFA fees.
    Originally posted by Shashy
    I already looked at that, thanks as its a valid suggestion. I find that some of the funds require a minimum figure of £100k, hence why that wouldnt work for me. I guess an IFA either has multi people in a fund or has special deals with them
    • Stravinsky
    • By Stravinsky 26th Jul 17, 9:11 AM
    • 40 Posts
    • 28 Thanks
    Stravinsky
    This is where your analysis and mine diverge. I rather expect that the last years of life will be the most expensive.

    Have you decided how you will expect your wife to finance your care if you develop dementia and need to go into a nursing home, or vice versa? If you want privately financed care, then the costs are truly frightening and can go on for years. Maybe the sale of your home would finance your care - maybe not. Maybe home care would work, but that doesn't always pan out either.

    My late father-in-law went into private care at a cost of £800/month. That was 10 years ago. Now all costs in the care sector are rising and will only get worse with Brexit and the withdrawal of East European labour.

    You may have all this factored into your plans - or you may be gambling that you won't have to worry about that. I may be stepping over the bounds of "constructive comment", if so I apologise, but I would suggest that you take a look at this issue.
    Originally posted by deeplyblue
    Valid points, and yes I have thought of it. Having researched it, there is little I can do wiith funds to take account of that eventuality, for as you say the cost is so high. So if it ever came to that point under current legislation it WOULD probably end up with my property being sold to cover the costs, but even that wouldnt last too long. I've looked at it in relation to a close relative recently, and if that happens they would slowly be stripped of everything they have to cover care costs until there is little left and then the state kicks in.
    • woody_56
    • By woody_56 26th Jul 17, 9:46 AM
    • 143 Posts
    • 64 Thanks
    woody_56
    Valid points, and yes I have thought of it. Having researched it, there is little I can do wiith funds to take account of that eventuality, for as you say the cost is so high. So if it ever came to that point under current legislation it WOULD probably end up with my property being sold to cover the costs, but even that wouldnt last too long. I've looked at it in relation to a close relative recently, and if that happens they would slowly be stripped of everything they have to cover care costs until there is little left and then the state kicks in.
    Originally posted by Stravinsky
    Hi I'm in the same boat as you I have a portfolio of all Inv trusts.
    Probably the top 10 dividend payers and cash.
    I notice you talk about selling your property WHY?
    My Sister and I have just done a power of attorney on my my
    Very smart 91 year old father.
    We have all agreed that we will rent his flat and that will pay towards his care if needed?
    That leaves his asset to us when he passes.
    We bought the flat for him in the first place and he has lived rent free for almost 25 years and payed his own service charges.
    To many people think selling is their ownly option?
    And that's the way most Counclis would like you to think.
    Rent from the property and pensions both private and goverment
    plus the Councils mandatory contribution should get you somewhere
    near the exorbitant costs needed.
    Rent?...?..? First.
    Jim
    Last edited by woody_56; 26-07-2017 at 9:47 AM. Reason: Spelling
    • AndyT678
    • By AndyT678 26th Jul 17, 9:52 AM
    • 716 Posts
    • 957 Thanks
    AndyT678
    I already looked at that, thanks as its a valid suggestion. I find that some of the funds require a minimum figure of £100k, hence why that wouldnt work for me. I guess an IFA either has multi people in a fund or has special deals with them
    Originally posted by Stravinsky
    £100k minimum is probably to invest directly with the fund manager but they're all probably available on most of the common platforms. If you post a list someone will probably check for you.
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