£10,000 a year from 10 shares?

aspiration_2

verybigchris wrote: »

........................................

They invest exactly £21,532 in each of eight companies, with no explanation of that figure. Is that their lucky number? .......

I wondered about this as well.

Perhaps the idea was to see if an income of roughly £1000=00 can be generated?

AlanP_2

bowlhead99 wrote: »

It may be a cliche to talk about 'the vast majority' and 'ordinary hard working people' but the ordinary people on ordinary average salaries with ordinary average levels of intelligence and knowledge of finance, are typically less equipped for retirement than the smartest of posters on an investments forum.

It may be a cliche to talk about 'the vast majority' and 'ordinary hard working people' but the ordinary people on ordinary average salaries with ordinary average levels of intelligence and knowledge of finance, are typically less equipped for retirement than the [STRIKE]smartest[/STRIKE] DUMBEST of posters on an investments forum.



Even those who ask what some on here may see as a stupid question at least KNOW what they DON'T KNOW. Unfortunately the other 99.9% of the population doesn't.


It's very easy for those of us who are used to using IT, work at reasonably senior levels in reasonably responsible jobs and have a reasonable education to forget that we are the minority and users of MSE are not representative of the UK population as a whole.

Marine_life

bowlhead99 wrote: »

I agree with gadgetmind that someone who hasn't engaged in any retirement planning, should have.

Well that's easy to say but you that's implying that the majority of the population are financially literate. When you look at surveys which highlight that "Half of those who have taken out a payday loan do not understand the meaning of a ‘loan’ while 68% cannot identify the meaning of ‘interest’" then we need to be seriously worried. If people are not understanding the basics then how can they be expect to understand things like 'compounding' 'inflation' and 'tax relief'.


Of course its easy to say also that other "should have" taken more interest in their financial destiny and forget them as being imbeciles if they don't but the fact is that those who haven't planned will be financially support by that that have.


Actually we need to think very carefully about whats on the school curriculum.

coyrls

AlanP wrote: »

It may be a cliche to talk about 'the vast majority' and 'ordinary hard working people' but the ordinary people on ordinary average salaries with ordinary average levels of intelligence and knowledge of finance, are typically less equipped for retirement than the [STRIKE]smartest[/STRIKE] DUMBEST of posters on an investments forum.



Even those who ask what some on here may see as a stupid question at least KNOW what they DON'T KNOW. Unfortunately the other 99.9% of the population doesn't.


It's very easy for those of us who are used to using IT, work at reasonably senior levels in reasonably responsible jobs and have a reasonable education to forget that we are the minority and users of MSE are not representative of the UK population as a whole.

That's true, but an article suggesting buying 10 shares to generate £10,000 a year is unlikely to be helpful or appropriate for the people you are talking about.

Aged

coyrls wrote: »

... an article suggesting buying 10 shares to generate £10,000 a year is unlikely to be helpful or appropriate for the people you are talking about.

Those are EXACTLY the sort of people the article is aimed at (in my humble opinion of course). Its aim is to show that if you are looking to derive an income from your pension pot, you will be far better off 'investing' it than handing it over to the banks.

It amazes me how many posters in this forum are unable to zoom out and appreciate the bigger picture!

gadgetmind

Aged wrote: »

Its aim is to show that if you are looking to derive an income from your pension pot, you will be far better off 'investing' it than handing it over to the banks.

Well -
1) Just 10 shares carries a lot of risk that both capital values and annual income will vary wildly.
2) Trying to draw 5.5% carries risk of a complete capital loss if income drops and capital is used to keep the wolf from the door.
3) Many people, perhaps even most people, would be better using the annuity route, particularly if they can't grasp (1) and (2).

chucknorris

Aged wrote: »

This article might be of interest to those thinking of making the transition from saving to 'investing'

http://www.moneywise.co.uk/investing/stocks-and-shares/10-shares-to-give-you-10000-annual-income

What do you think of this? It pays about 3.8% and is reasonably diverse both geographically and sector wise (but not perfect, but with a few prtfolio additions that could be corrected).


https://www.vanguard.co.uk/adviser/adv/investments/etfs/detailoverview?portId=9506&assetCode=EQUITY

gadgetmind

Do they have any limits regards how much can be invested per company, per country and per sector?

Do they use historical dividends or projected?

(And sorry for being lazy!)

Linton

chucknorris wrote: »

what do you think of this? It pays about 3.8% and is reasonably diverse both geographically and sector wise (but not perfect, but with a few prtfolio additions that could be corrected).


https://www.vanguard.co.uk/adviser/adv/investments/etfs/detailoverview?portId=9506&assetCode=EQUITY

3.8% dividend is pretty poor to attract someone seeking to live off natural income. A broadly diversified range of dividend paying shares and funds could provide more like 5%.

However the fund is a lot safer than just holding 10 UK shares. I cant see why the original article should make a point of such a small number.

gadgetmind

Linton wrote: »

3.8% dividend is pretty poor to attract someone seeking to live off natural income.

We're currently living in low return times.

A broadly diversified range of dividend paying shares and funds could provide more like 5%.

It could, but the more you strive for yield, the more risk you take on and the fewer "growthy" companies you'll have in the mix.

However the fund is a lot safer than just holding 10 UK shares. I cant see why the original article should make a point of such a small number.

That it never mentioned diversity, and how their approach was critically short of it, is definitely its major flaw.