Only freedom will do

edinburgher

They are either acc(umulating) or inc(ome) units. When dividends/bond interest etc. are paid to the fund, accumulating funds reinvest the monies into the fund, the value of your units go up slightly. With income funds, they pay you a small income instead. With a large, balanced index fund like Vanguard Life Strategy, the yield (income) on the fund is very low, not really suited to paying out an income. From memory, it's currently 1.x% on VLS80.

CathT

These posts are so so helpful. I am not at all knowledgable in this area however even I will set up one of these accounts with £50.

Well done on your win Mr E!

AlexLK

SuperSecretSquirrel wrote: »

Doesn't have to be an all or nothing decision. If you can afford £50pm to play with you could start with either the monevator pound stretcher or slow and steady passive portfolios. Set up, leave alone, check the results in one year's time. That's pretty close to leaving it and having a go at the same time Even simpler, pick a vanguard lifestrategy fund, setup £50pm direct debit, ignore

I was stuck in analysis paralysis for years. Stumbled across monevator, couple of days later I had opened a S&S ISA with a great low cost platform, and had £50pm invested in the pound stretcher portfolio. Later I changed to the slow and steady portfolio and increased monthly contributions to £150. Recently added a further £100pm of LS80. Plan is to ramp up total investments to £350pm from September, and £750pm in 2018 when the fixed mortgage is close to ending and cashflow is improved. I'd still be investing £0pm had I waited until I really knew what I was doing

If you can afford to lose a 10k lump sum, you can afford to lose £50pm (you won't lose it). Nothing beats getting started, and the worst that could happen by getting it "wrong" is really not that bad

How do you set up a direct debit? I've only ever had a direct debit that a company has set up for me and didn't know you can set them up yourself?

Can you take the money invested out if desired at a later date?

edinburgher wrote: »

Probably the easiest way to set up a small S&S ISA would be getting yourself over to the Ch@rles Stanley Direct website, opening an account and setting up a monthly payment of £50 Vanguard Life Strategy 60 or 80 Acc (below 60 is too conservative for most people, 100 is probably too risky for all but the youngest of us). A single fund that could meet all of your needs :beer:

As SSS says, analysis paralysis and doing nothing can really get in the way of your future!

Can you open this online? I presume you don't need to do anything with this fund or know about investing? Lastly, is this a pension that you cannot take the money out of until you're 55-60?

AlexLK

I've visited the website in question which has cleared up some questions and the account looks straightforward enough to set up. However, I could not find information about the Vanguard Life Strategy fund?

edinburgher

To answer your questions.

1) You ask them to set up a DD, you would need to do this to ensure that money is paid into your ISA to make the monthly funds purchase. Past this point, you need to set up a monthly investment (telling them what funds to purchase with the money drawn from your current account with the DD).
2) You can take the money out at any point, although it will take a few days. You would sell a specified number of fund units/or to a cash value and then withdraw the money
3) You can only? open it online
4) I don't think you need to know much about the fund other than it's well diversified and representative of global equity markets. What you *do* need to consider/know is the likely risk and volatility of these sorts of investments. Falls of xx% are to be expected at some point
5) It's an ISA, not a pension
6) Type Vanguard lifestrategy (one word) into the search bar

turtlemoose

Well I made a mistake yesterday, idly asking a group of friends if they were aware of the concept of FIRE. The responses bordered on aggressive ..... It won't work, the maths make too many assumptions, you'd lose a sense of purpose if you had no job at 50 then lived for another 30 years, nobody can predict your mortality so how can you know the sums are right, I work hard and I like my *insert treat here* so why should I give it up, I'm not letting my child go without just so I can retire early, and I'm not scrimping every penny because I could drop dead at 50, it's all well and good managing and balancing your financials at 60 but what about when you're 95 and senile......etc!

I was very surprised at the strength of the reaction to what I thought was just a casual question. Has anyone else received a strong reaction when talking mfw or fi? I just thought they'd all go "hmm interesting but I can't afford it" or "hmm interesting I'd like to find out more". But clearly not!

AlexLK

edinburgher wrote: »

To answer your questions.

1) You ask them to set up a DD, you would need to do this to ensure that money is paid into your ISA to make the monthly funds purchase. Past this point, you need to set up a monthly investment (telling them what funds to purchase with the money drawn from your current account with the DD).
2) You can take the money out at any point, although it will take a few days. You would sell a specified number of fund units/or to a cash value and then withdraw the money
3) You can only? open it online
4) I don't think you need to know much about the fund other than it's well diversified and representative of global equity markets. What you *do* need to consider/know is the likely risk and volatility of these sorts of investments. Falls of xx% are to be expected at some point
5) It's an ISA, not a pension
6) Type Vanguard lifestrategy (one word) into the search bar

Sorry for being so dumb but your post answers all my questions, thank you.

I think I will register for the account today and give it a go at £50 per month, as I don't think I'm going to really miss that (I reckon it's Mrs K's old Costa budget :rotfl:).

Arkers

TM - really insightful post. I think the basic premise is that "we" as a culture do not tend to divulge our plans to our co-hort/friends so the fact that you dropped this bombshell caused alarm. I believe that FIRE is something that we aspire to on this site, hence the reason that we're in a safe place to discuss.


There is a bit of follow the fold too, in that what you and others are hoping to achieve is not the norm. I suspect that the reaction you've had will be what others have, but I don't know for sure, perhaps I'll give it a go.


It is a very individual decision based on loads of factors and parameters. A bit like the "number," needed for a productive and happy retirement. I must admit I do find the balance difficult in living for today and saving for tomorrow, but I am striving to get this right!

NorthernMonkey1

My office is quite unusual in that respect.

we have a company share save scheme, and as the share price is doing quite well, there have been a few 5 figure payouts for people saving >250 a month.

This leads to inevitable discussions on what people are planning to spend their money on. I know that the guy who sits opposite me is trying to pay off his mortgage in 5 years with minimum mortgage payments and maximum sharesave payments, and my boss is going for long term mortgage with 25% pension contributions as his plan.

It tends to be discussed every year around this time, as this is when we have to sign up for the plan, get the payments, and can change our pension payments, and then not get discussed for another 10 months.

It's helped me a lot. I'm no longer planning to overpay my mortgage by much (maybe the odd £100 here and there) and now save £500 a month into my company sharesave scheme, which will pay out in 2020. I've also changed my pension contributions to take advantage of the 40% tax bracket.

I've missed out on sharesave in the past, due to the weight of my debt commitments, and now I'm free of that, I'm free to plan for my future. I think more about money now than I ever have in the past.

ajmoney

I know which real life friends I can talk about these things with and to what degree, I don't bother with the rest. I also have to pick the right time with Mr AJM and work up to conversations. I learned about the value of money between 19-21 (when i was young enough to make a stupid mistake which in today's money was very small) and have continued to learning. I too am very glad for this site!