Only freedom will do

Karmacat

edinburgher wrote: »

If you want to invest for your future, but don't know where to start, spare an hour of your life to watch this video! :T

Bookmarked ... thanks ed.

ramorth

Ed ... Been thinking through the pensions etc again ( admittedly not very much just now as I'm kinda happy with the direction it's heading)

Was thinking maybe a wee splurge (£1-2k Max) on some shares ( thinking Rbs believe it or not) just to make up a small part of the portfolio

Anyway ... Whilst working out the will I wont I buy shares scenario I got to thinking see for the last 5 years of saving for my pension before retiring would I be better in keeping the money in cash or shares ... As opposed to say the vanguard 80 or 60 etc

Reasons I'm thinking this are basically

You need a good 5 years atleast for funds to even start to pay so buying them when 4 /3 years etc before I intend to retire ain't really gonna be any good

If I kept it in cash I still get the 20% from the tax man but admittedly probably won't make much intetest so would treat the tax rebate a the interest accrued really

Does any of that make sense ? Is there another way to think of it ? ( I did think gold/silver but quickly dismissed that one)

ramorth

Incidentally just to clarify I am not looking for financial advice just ideas etc... I know when we have discussed it before I've always found your thought processes fantastic for making me think and also pointing out the obvious that I always somehow seem to miss

blackste

Well that passed an hour or two. Good read. Just out of interest Ed, as im very rusty, how do you get so many free spin offers. Im thinking about putting a float together for the new year, and getting back to a bit of casual MBing.

Cheers,

steve

edinburgher

Hi ramorth - my non-expert thoughts below - wall of text warning!

You need a good 5 years atleast for funds to even start to pay so buying them when 4 /3 years etc before I intend to retire ain't really gonna be any good.

1) I disagree! My Vanguard LifeStrategy 80 holding for this tax year alone is at +5.17%. That's in an ISA, so it's a real return. My attitude to investing is that you shouldn't try to time the market. Granted, I buy on the dips, but I'll be buying for a long time and cheaper funds = more units.

2) While I agree that it makes sense to reduce your exposure to riskier assets as you get closer to retirement, you are thinking about this in the wrong way. You want to hold less shares/volatile assets because you're getting older and can probably afford to gamble with your outcome less, not because you don't think you'll make as much money!

3) The VLS funds that you refer to are made up of funds and bonds, funds are just a bunch of shares, they're not (fund)amentally different

4) No sensible investing decision should ever feature the phrase 'believe it or not'

5) Why bother taking risks with individual shares when you can invest cheaply in a well diversified fund and capture more of the market return? I really think you'd benefit from considering that video I linked to the other day. Let's face it, if you were a hot stock picker, you'd be rich and would have retired ages ago. There are very few hot stock pickers, I've never met one :rotfl:

6) A small amount of physical gold isn't the worst thing ever for a cautious investor looking to diversify. If you go down that route, I'd go for a tiny allocation (5% or less) and stick to sovereigns/Brittanias as they're CGT exempt. I wouldn't touch gold with a bargepole as I'm young, I need my money to grow.

7) Silver? I've dabbled, even made a few £s profit. I got very lucky, silver resale prices appear to be terrible. As an example, a bullion dealer will sell you a Maple for £13-14, but will pay £10 if you sell it back to them on the same day!

Go back to basics. Calculate your likely expenditure in retirement. Calculate your total income from any final value pensions/the state pension. Then calculate the size of your total 'pot' (i.e. money in SIPPs/stakeholder pensions). Consider how you plan to use any pot (i.e. drawdown or annuity). If drawdown, you'll have a safe withdrawal rate of c. 3-4% in retirement with a balanced portfolio (50/50 shares/bonds). If there's a disconnect between planned spend and expected income, act now!

I recommend the Monevator blog for further research, as well as Retirement Investing Today and Simply Living in Suffolk (for a view of a chap who has recently retired).

Just out of interest Ed, as im very rusty, how do you get so many free spin offers

I just keep up to date with the MB forum, check my emails and the 'usual suspects' (Laddies/SJ/WH/BF) a couple of times a week. The slots offers are tailing off a wee bit now, Laddies have become significantly less lucrative over the last quarter. I'm sure you could teach me a thing or two, I've never even signed up to a non-UK bookie!

blackste

There is really little difference in the euro bookies mate, they usually let you show your currency as pounds. Odds are decimal, which is better anyway. The US bookies are very similar, but your betting will be on "football", basketball and baseball. Usual story, check the rules first. The markets are slightly different, especially for baseball and "football", as they dont have drawers. The only other thing i tried to do was bet on higher odds, to maximise losses at bookies. It means you are less likely to have to withdraw from them, and i found i got a lot of follow up offers.

ramorth

edinburgher wrote: »

Hi ramorth - my non-expert thoughts below - wall of text warning!



1) I disagree! My Vanguard LifeStrategy 80 holding for this tax year alone is at +5.17%. That's in an ISA, so it's a real return. My attitude to investing is that you shouldn't try to time the market. Granted, I buy on the dips, but I'll be buying for a long time and cheaper funds = more units.

2) While I agree that it makes sense to reduce your exposure to riskier assets as you get closer to retirement, you are thinking about this in the wrong way. You want to hold less shares/volatile assets because you're getting older and can probably afford to gamble with your outcome less, not because you don't think you'll make as much money!

3) The VLS funds that you refer to are made up of funds and bonds, funds are just a bunch of shares, they're not (fund)amentally different

4) No sensible investing decision should ever feature the phrase 'believe it or not'

5) Why bother taking risks with individual shares when you can invest cheaply in a well diversified fund and capture more of the market return? I really think you'd benefit from considering that video I linked to the other day. Let's face it, if you were a hot stock picker, you'd be rich and would have retired ages ago. There are very few hot stock pickers, I've never met one :rotfl:

6) A small amount of physical gold isn't the worst thing ever for a cautious investor looking to diversify. If you go down that route, I'd go for a tiny allocation (5% or less) and stick to sovereigns/Brittanias as they're CGT exempt. I wouldn't touch gold with a bargepole as I'm young, I need my money to grow.

7) Silver? I've dabbled, even made a few £s profit. I got very lucky, silver resale prices appear to be terrible. As an example, a bullion dealer will sell you a Maple for £13-14, but will pay £10 if you sell it back to them on the same day!

Go back to basics. Calculate your likely expenditure in retirement. Calculate your total income from any final value pensions/the state pension. Then calculate the size of your total 'pot' (i.e. money in SIPPs/stakeholder pensions). Consider how you plan to use any pot (i.e. drawdown or annuity). If drawdown, you'll have a safe withdrawal rate of c. 3-4% in retirement with a balanced portfolio (50/50 shares/bonds). If there's a disconnect between planned spend and expected income, act now!

I recommend the Monevator blog for further research, as well as Retirement Investing Today and Simply Living in Suffolk (for a view of a chap who has recently retired).



I just keep up to date with the MB forum, check my emails and the 'usual suspects' (Laddies/SJ/WH/BF) a couple of times a week. The slots offers are tailing off a wee bit now, Laddies have become significantly less lucrative over the last quarter. I'm sure you could teach me a thing or two, I've never even signed up to a non-UK bookie!

Hey Ed, thanks for replying

have got my figure and am actively working towards it so i think i am good to go in that sense

was thinking more about the 5 years or so before actual retirement where i have constantly read " dont invest for the short term 5-10 years minimum" type of comments so was mainly trying to work out how to financially fill that 5 years before actual retirement gap so to speak have decided on the drawdown route as well due to health situation

Was actively fund dealing and making an ok amount of profit ( nothing huge just enough to keep me interested and making a wee bit say 8-10% return) but now that i am back to studying i am thinking ... think safely, think slow burn ... think dont have to check it and the financial markets all the time ... just let it work away in the background... go for vanguard etc ... so am happily feeding that account just now was just thinking hey i fancy a wee splurge ( not much only £1-2K max) on RBS

i'm kinda happy where i am with a lot of things just at the tweaking stage tbh ...

edinburgher

It probably makes more sense to think about that 5 years as a rolling period. You're not going to draw down everything at once, so there's no harm in some exposure to equities. Anyway, unless you have a very big pot, chances are that you'll need to remain exposed to at least some equities throughout retirement :beer:

Laura2014

edinburgher wrote: »

Hi ramorth - my non-expert thoughts below - wall of text warning!



1) I disagree! My Vanguard LifeStrategy 80 holding for this tax year alone is at +5.17%. That's in an ISA, so it's a real return. My attitude to investing is that you shouldn't try to time the market. Granted, I buy on the dips, but I'll be buying for a long time and cheaper funds = more units.

2) While I agree that it makes sense to reduce your exposure to riskier assets as you get closer to retirement, you are thinking about this in the wrong way. You want to hold less shares/volatile assets because you're getting older and can probably afford to gamble with your outcome less, not because you don't think you'll make as much money!

3) The VLS funds that you refer to are made up of funds and bonds, funds are just a bunch of shares, they're not (fund)amentally different

4) No sensible investing decision should ever feature the phrase 'believe it or not'

5) Why bother taking risks with individual shares when you can invest cheaply in a well diversified fund and capture more of the market return? I really think you'd benefit from considering that video I linked to the other day. Let's face it, if you were a hot stock picker, you'd be rich and would have retired ages ago. There are very few hot stock pickers, I've never met one :rotfl:

6) A small amount of physical gold isn't the worst thing ever for a cautious investor looking to diversify. If you go down that route, I'd go for a tiny allocation (5% or less) and stick to sovereigns/Brittanias as they're CGT exempt. I wouldn't touch gold with a bargepole as I'm young, I need my money to grow.

7) Silver? I've dabbled, even made a few £s profit. I got very lucky, silver resale prices appear to be terrible. As an example, a bullion dealer will sell you a Maple for £13-14, but will pay £10 if you sell it back to them on the same day!

Go back to basics. Calculate your likely expenditure in retirement. Calculate your total income from any final value pensions/the state pension. Then calculate the size of your total 'pot' (i.e. money in SIPPs/stakeholder pensions). Consider how you plan to use any pot (i.e. drawdown or annuity). If drawdown, you'll have a safe withdrawal rate of c. 3-4% in retirement with a balanced portfolio (50/50 shares/bonds). If there's a disconnect between planned spend and expected income, act now!

!

Just wanted to say I'm in awe of your knowledge. I think you may have missed your calling as a financial advisor.

I will be looking into your tips myself. Thank you Pensions is an area that I feel quite scared about. Stocks and Shares ISA is also on my to do list. So this is very helpful x

gallygirl

Laura2014 wrote: »

Just wanted to say I'm in awe of your knowledge. I think you may have missed your calling as a financial advisor.

Seconded :T.