Take a peek at my hand?

elephantrosie

may i ask which platform are you with for the ETFs?

Ray_Singh-Blue

End of Quarter 1, 2018

**Newsflash**

Events this quarter have led to a huge simplification in my position. Basically I sold almost everything.

A few posts ago, I explained that I saw this project as multi-purpose. Perhaps to pay off mortgage, perhaps to fund early retirement, perhaps to fund university costs, perhaps to build my next house. Because of this vagueness of both purpose and timeline, I settled on a simple strategy of half equity, half cash, using low cost index funds held within ISAs.

Well, in January the option came up to buy a property. Bit of a development project, but could have been my next home. So I sold up, and started making plans. The only thing I held onto was a chunk of Vanguard's world equity tracker, VWRL.

But... long story short... I got cold feet. The more I looked into it, the more complex it got. Both financially and logistically.

My balance sheet would have read 2 houses + 0 investments - 2 mortgages: Yet beneath that beguilingly simple equation lurks a murky soup of architects, planners, 2nd home stamp duty charges, BTL mortgages, conveyancing, insurance, interest rate shocks, letting agent fees, utilities, council tax and so on. And of course, once spent on buying and developing a 2nd house, the money cannot be spent on univerisities, sabatticals, or any of those other things.

Like darkidoe says:

darkidoe wrote: »

Less sometimes is more. Simplicity breeds headspace

And like someone else said:

Someone_Else wrote:

One house, one spouse.

Which is why after a fortnight of sleepless nights, I bottled out.

This leaves me in a cash-heavy position. It also makes me pause and question what exactly I am trying to achieve here. Now that the chips are cashed, should I simply pay off a chunk of mortgage and make life more simple? If I did, the last £100K of mortgage would be in sight. Or, do I stay the course:

50% equity, 50% cash.
Low cost index fund(s)

I have not decided what to do next but will keep you posted. Thanks as always for any input.

Reply to elephantrosie: you asked which sharedealing platform. For security, I would rather not say. But Snowman has posted an excellent comparison tool. For someone like me, with a fair chunk in ISA, it mainly makes sense to avoid platforms which charges a % annual fee. I'm not so bothered about trading charges because I don't do much of that.

oz0707

Atleast you missed the dip in the markets early this year?

BrockStoker

Ray_Singh-Blue wrote: »

Thanks as always for any input.

If nothing else, it looks like tomorrow will be a good opportunity to buy equities

Ray_Singh-Blue

Update #14, Q2 2018

Hey.

Not much to report- sat on both hands for 3 months.

For the record, my mortgage now stands at £304,838. Invested, I have £65,750 of VWRL in a stocks and shares ISA, and £100,000 of cash.

oz0707 - Sold before a dip, true... but did not buy back in after the dip, and now prices have recovered, so not claiming any success there.

brockstoker- isn't every day a good day to buy equities?! Although Benjamin Graham's advice rings in my mind, that maybe the best time is when they are cheap... perhaps that's why I am not yet feeling any urgency to buy back in and am currently only 40% equities.

Ray_Singh-Blue

Update #15, Q3 2018

Another three months gone. Hope they were good for you. They have been good for me, life is very rich and full at home, work and play. However, one thing I haven't been doing much is checking my investments. In fact... I haven't logged into sharedealing accounts since June, and only then to check the balances for update #14.

I think this may be it! After a decade of tinkering I have found a sort of peace with investing, and it comes in the deliciously simple recipe of 50% cash, 50% equities.

It's perfect. I'm happy if the market goes up, because I'm half in it. I'm happy if the market goes way down, because I'm half out of it. So... I go away and do something else, while the market does whatever it does. For me, so far, it has been revolutionary. And it costs almost nothing.

However in the spirit of full disclosure, I haven't quite reached the zen-like state of complete enlightenment yet. Still a little cash heavy (63%) and am kind of waiting for an opportune moment to buy more VWRL to achieve the 50:50 balance. I realise this is a little nudge towards market timing- guess old habits die hard.

Here's the progression:
December 2014: mortgage £369K, ISA £86K (23%)
December 2015: mortgage £346K, ISA £98K
December 2016: mortgage £330K, ISA £135K
December 2017: mortgage £313K, ISA £171K
September 2018: mortgage £300K, ISA £183K (61%)

The cross-over's not quite in sight yet. But it's coming.
Thanks for reading.

RB

Ray_Singh-Blue

Update #16 , Q4 2018

2018 has been a very good year for me. Not in terms of the performance of my portfolio - I'm down like probably almost everyone else. But because events have spurred me on to create a really simple portfolio: 50% cash, 50% VWRL. And because a slide in share prices towards the end of the year has proved, to my satisfaction, that I can live with this through market turbulence without concern.

I have posted before about my abortive dabble in the rental property market earlier in the year. Surveys, legal and arrangement fees left me over £2K poorer. But after I had sold almost all my investments, stock markets had the good grace to fall. As I had not actually transferred any cash out of my ISA accounrs, this meant I could buy back in at a lower price and mitigate some of that loss. And when I bought back in, rather that buying TESLA and Tesco and aluminium ETFs… I just bought more VWRL.

At the close of play on 31st December 2018, I hold the following in ISAs:
• Cash, £100,000
• VWRL, £99,662
My mortgage is now £296.293 … which means the “gap” is down to 5 figures for the first time.

At this moment in time, the cash is earning interest at 1.4% overall. And the dividend yield of VWRL is 2.11%. So the total return is 1.75%. The mortgage interest rate is 1.99%. The expense ratio of VWRL is 0.25%. Putting these things together, it is effectively costing me 0.37% - £740 per year- to hold this portfolio. But as previous years have shown, there is potential for unlimited growth in the equity part of an investment portfolio. And the peace of mind that comes from sitting on almost £200K of easily liquid assets, is significant. So I’m going to crack on with the plan, rather than paying any more mortgage off.

That's all from me, but may I share some wisdom from mlebuf, a poster on the site Bogleheads.org – and a university professor I believe – who lists 10 rules for success in life, financial or otherwise. (The original post is here)

1. Life is 20 percent doing smart things and 80 percent not doing dumb things.
2. The best lives, careers, families, retirements, etc. are planned. Good luck happens when opportunity meets preparation.
3. Whoever said that money is the root of all-evil was either a fool or a con artist. Lack of money is the root of all-evil.
4. Much of what we become and how much success/happiness we enjoy is determined by the choices we make between ages of 15-25. Those are also the years when we are most likely to screw-up.
5. We all make mistakes that have negative consequences. When you lose, don't lose the lesson, correct the mistake and move on. One of the best ways to avoid mistakes is to learn from the mistakes of others.
6. Be a smart risk manager. Success depends on taking smart, calculated risks. A smart risk is worth it. If the negative consequences of taking a chance are very bad, don't go there.
7. Be low maintenance and marry low maintenance. Frugality and emotional stability are critical.
8. Happiness is a byproduct of 4 things: good health; enough money to live the life you want to live; meaningful activity that you enjoy and find fulfilling- jobs, sports, hobbies, whatever-; and good relationships with friends/family
9. The best way to have a great future is to know what makes you happy and create it.
10. Life is not fair. It deals all of us a different hand of cards. Success depends on how well we play the hand.

I can buy all that.

Happy new year everyone, may 2019 bring good things to you and those you care for.

Ray

Ray_Singh-Blue

Update #17, Q1 2019

Not much to report this quarter. A passenger on the passive bus. No-one got on, no-one got off.

Mortgage: £291,989
Investments: £207,598 (52%VWRL, 48% cash)

Apologies if I have made your day just a teeny but duller with this dull, dull post!

AnotherJoe

Do you still have all those 3% and less investments you mentioned in Dec 17?

Ray_Singh-Blue

Update #18 Q2 2019

Another 3 months of doing the square root of nada.

Another Joe, the answer to your question is no. Sold everything except VWRL in early 2018 to buy a house, then didn't buy a house. So what I have now in ISAs is £115,447 of VWRL £100,000 of cash, and nothing else.

The mortgage is £287,664. So the "gap" has narrowed further to £72,217. This feels nice.

At some point soon I'm going to top up the ISAs from current account - likely this will be my sole transaction for the year- but feel no rush.

Exciting it ain't, but I feel a lot more relaxed about my financial life than when started this thread a few years ago. Hardly spend any time thinking about it to be honest. Sorry if this has become a little tame, but thanks for staying with the thread anyway!

Good luck to you all

Ray